Dave Ratner’s Blog

Earlier this week, my phone rang. It was not an angry customer calling. Worse — it was an angry would-be customer calling, a woman who I am sure will never shop at our store.

Here’s what happened:

She called our store to discover if we carried Doggie Diapers. My cashier said, “Absolutely! We do carry Doggie Diapers.” The would-be customer, thrilled, asked another question: “Can you tell me how much they are?”

Here’s what my crew member said:

“I’m at the register and it’s really busy right now, so I can’t tell you that right now.”

That was the extent of the call — leaving our would-be caller furious!

In an ideal world, our crew member might still have been busy. It happens. However, he could have said, “I’m really busy at the register right now, but if you give me your name and number, I’ll call you right back with that information in just a minute.”

Chances are, the would-be customer would have been a LOT happier with that answer!

Who was at fault in this scenario?

It was my fault. Clearly, I should have provided training on this issue: this is EXACTLY the reason I’m working on an employee training manual. There is one thing every retailer needs, and that’s a common sense training manual that spells out When X happens, you do Y!

For all the bosses or managers who might be reading this, I want you to know one thing: when our employees make a bone-headed blunder like the one you just read about, it’s not malicious. They’re not trying to hurt your store. They just didn’t have the proper answer to the situation readily at hand.

It’s our job to make sure they have the answers in place. We have to spell it out: when you’re faced with this situation, you need to take these actions. This should be part of every employee manual!

In fact, if you want to make covering this type of topic a fun part of your employee training, you should test newly trained employees on the concept. When they pass the test, give them a prize. Make it fun. This is something we can do that the larger retailers simply can’t!

“You know,” the customer told me, as she stood at the register, “online, you can buy Wellness for 41 cents a can.” We sell Wellness for 46 cents a can, a nickel more. She glared at me. “Are you going to meet their price?”

If you’re a retailer, chances are you’ve experienced this same scene — or something very similar. With the economy the way it is, news outlets all across the nation are encouraging customers to get over any shy side they may have and start negotiating for lower prices. Lower prices on anything and everything, from a new car to cat food. After all, the public is assured, it doesn’t hurt to ask.

The question isn’t painful. But the answer could be — especially if you’re the retailer!

Like many situations you face in your store there is no one cut and dried answer. There are a number of factors that go into the decision to match prices. These include:

Are you a good customer? If I’ve never ever seen you in my store before and you’re coming in asking me to match prices on the loss-leader sale the chain discounter is running, you’re out of luck. I know you’re just cherry picking prices — and once I give you the deal, I’m never going to see you again! What’s in it for me?

Does the deal make sense? I’m not going to drop my prices so much that it costs me money! Let me give you an example.

Years and years ago, there was a store called Edwards. Some of you might remember Edwards — they were the first to run super deep discounts on national products. They were so cheap, they didn’t even have bags! We’re talking real bare bones here.

At the time, we were selling 9 Lives Cat Food four cans for a dollar. A case of 9 Lives cost us $5.50, and we were making $6.00. Not a great margin, but we sell a LOT of 9 Lives.

A customer came in and told me that Edwards had 9 Lives five cans for a dollar. That’s $4.75 a case — less than my cost. She asked if I would match the price.

I couldn’t — and I told her that. So I was absolutely totally dumbfounded to see this same woman over at my shelves, picking out 9 Lives!

I had to ask her why.

Her answer: “They don’t have the flavor I like.”

I told her, “Then when we don’t have the flavor you like, we’re six for a dollar!” She laughed — because she knew the basic rule of negotiation: For a deal to truly be a good deal, both parties have to be happy with it. You’ve got to leave some money on the table — otherwise, the retailer’s never going to go for it! The trick is finding the balance where the customer gets a good deal and you’ve realized at least some profit.

That’s a good negotiation.

Later this week, we’ll be talking about empowering your employees, so they’re prepared when your customers come in and say “What can you do for me?”

One of the things you’ll discover, if you read this blog regularly, is that I go to a lot of conferences, retail events, marketing summits and so on.  The reason for this is simple: I go to these events because they make me a better retailer!

This week I was in a room with some incredibly creative people.  I find it really nurturing to be surrounded by folks who nknow so much more than I do: it’s a chance to drink and absorb all of their knowledge and wisdom.

That’s something retailers need to do.  I know, it’s easy to get trapped in the store — there’s so much to do and never any time to do it!  But you have to get out: go learn from people who do things better than you do!

At this conference I was there with the CMO’s from some really big companies, and I said, “I can’t figure out the whole flyer thing.  Should I do them, should I not?  What kind of coupons work best?” and before I knew it, I was in this in depth conversation with three or four of the top retailers in the nation, talking about flyers.  You can’t buy that kind of moment.  You can’t read it in a book.  You have to BE THERE, put yourself out there and ask questions!

Go where the people are.  Go to tradeshows.  Go to your competitor’s store.  Go outside of your industry.  See what other folks are doing!

Entrepreneurship is a lonely game.  Do yourself a favor and break that cycle: get out of the store and see what you can learn!

Even if you don’t have a pet, I’m guessing that you heard about the pet food recalls that happened a little over a year ago. Because Dave’s Soda and Pet City sells a lot of pet food, this was a major event in my life as an independent retailer.

I have to tell you, never in thirty plus years of doing business have I ever seen major corporations handle a public relations event so poorly! This recall was massive: all of the major pet food companies were affected. Proctor and Gamble, Nutro, Purina, Hills — every one had to pull products. And the way these major companies handled the situation? It was so bad as to be mind boggling!

The news about the recall broke on a Friday evening. Saturday morning, I went into the store and called my Nutro rep. I wanted to know what I was in for. Are you ready for what he said to me?

“I was waiting for your call!”

He was just as clueless as I was. None of the local representatives had any information from their corporate headquarters about what was happening. They didn’t have any more of a clue than I did.

Now, you have to understand: it was the wheat gluten in canned food that caused the problems. Only canned food. But due to the sensationalistic news coverage the recall received, the customer didn’t know that. They thought every type of pet food had been affected by the recall, and they were panicking.

You would think that Purina, Iams, Hills, and these other huge corporations would provide signage, detailing the fact that all the dry foods were still safe to feed to pets.

You would be wrong.

You would think that vendors who had 8 feet of shelf space at any given store, only to have 4 feet worth of product pulled by the recall, would rush to ship replacement product!

You would be wrong. My store, and tons of stores just like mine, had all these gaping holes on the shelves, with no products to fill them.

All of the manufacturers just crawled into a shell and hid. The most interesting thing is the huge opportunity all of these major companies missed. I’ve got a database of thousands of customers. Pet Co, Pet Smart and other national chains have databases that contain many multiples of that! You would think that the manufacturers would approach us, asking to use our databases to reach out to customers and assure them of the safety of their products, offer up critical information, and provide contact details.

You, sadly, would be wrong.

In the next post, we’re dong to talk about the value of a damage control policy, and what you can do when your industry hands you a crisis to handle!