Just How Much Variety Do We Need? March 26, 2011Posted by David Dirks in business strategy.
Tags: beating a recession, best practices, business growth, business strategy, David Dirks, differentiation, dirks on strategy, marketing strategy, small business strategy, strategy
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In the toothpaste product world:
- There were 69 new toothpaste varieties introduced in 2010
- There are 352 distinct types of toothpaste sold today
That was enough to stop me right there. The context the WSJ story was this: Can brands confuse consumers? If you look at the above data, you’d have to say ‘probably’. But interestingly enough, brand loyalty to toothpaste is fierce. I buy only Colgate toothpaste with baking soda (of one flavor or another) whenever I shop. If I don’t find it, I find it somewhere else. And that’s why many retailers are reluctant to winnow out the ones that don’t sell as well and focus on keeping the shelves stocked with those that do.
Both Colgate and Crest have long known how inelastic consumers are when it comes to trying another brand of toothpaste. So, they merrily create the latest version of their branded toothpastes and keep them coming through product development and onto the shelves of retailers.
How much variety do we need? As much as it takes to keep us brand-loyal. In the meantime, retailers have little choice but to stock up on as many brands and sub-brands of toothpaste in the market as they can afford. Confusing for us consumers? Yes but a necessary evil.
And the Winner is…High-Quality Content! March 7, 2011Posted by David Dirks in Communication, Creating Marketing Materials, Creativity.
Tags: beating a recession, best practices, David Dirks, dirks on strategy, marketing strategy, strategy
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In early March of 2011 Google confirmed for all time what I contend has always been the foundation of success in any medium: high-quality content. Scrolls, books, magazines, newspapers and all other content delivery vehicles before the digital age have always lived or died based their content. All Google did was declare war on sites that deliver low quality content that offers little use for readers.
As a creator and user of information myself, I’ve always been critical of content vehicles (digital or not) that offer little or no useful information. In the digital world, the art & science (more art than anything because Google keeps its algorithm a secret), of “search engine optimization” or SEO, has created players who would rather game the system than provide you with solid content.
So it’s nice to know that the rules of the content game remain safely the same. If you want to develop content of any kind, it must be created and engineered so that people easily recognize and value it.
I’ll throw in three basic tenants for developing content that I’ve learned over many years of trial, error, and success.
Relevant: The content must be a match to the reader or user. People will search for content in any delivery vehicle (magazine, website), which is material they instantly recognize as useful in the context of their interests.
Engaging: High-quality content engages the reader by pulling their minds in directions they delightfully didn’t expect to go…but are glad they did when they get there. Content that challenges and inspires the mind on a subject has always been a jewel. High-quality content should be a great experience.
Insightful: Content, whether written, verbal, or visual has to have enough depth to allow the creator to draw out any number of valuable insights. My bias is for content to have insights that have a practical and actionable nature for the user.
Creating and sharing high-quality content is a timeless way to provide valuable information for both prospects and clients. Google’s war against low-quality content just reaffirmed what we knew all along.
Premiums as a Branding Strategy? January 17, 2011Posted by David Dirks in business strategy, Local Brand Development.
Tags: advertising, beating a recession, business premiums, business strategy, buzz marketing, David Dirks, differentiation, dirks on strategy, market differentiation, marketing strategy, premiums, promotional premiums, sales strategy
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I have the same dream often. I’m at a tradeshow and as I go to each booth, I find that there are no premiums for me to scarf up. Nobody has any of those glo pens or squeezable stress balls that come in every shape imagined by mankind. Nobody trying to shove another bag at me so I can carry all the plastic promotional items I suck up at each booth. I wonder. Is this a nightmare or is this a dream come true? It depends on which side of the premium business your on.
Let me be the first here to say that I’m not against the use of premium items for tradeshows. If you can afford it, go for it. If you expect that a premium is going to help you get more business or, as the premium sellers will tell you, it can extend your brand, you’ll be sorely disappointed. You’ll be staring at the phone, hoping one of your thousands of premiums you’ve distributed makes the phone ring. It could happen but the odds are against you.
When was the last time you heard anyone say, “Oh my God. Those premiums are making the phone ring off the hook!” or “Thanks to my premiums, my small business is now a huge brand in my market!”. The answer is, you haven’t. And there’s good reason for that.
In the context of small business enterprises, premiums are a luxury item. And it doesn’t matter how inexpensive they are either. It isn’t inexpensive if it doesn’t directly drive business. When was the last time you called a business using the phone number on their premium pencil.
The problem is, we’ve been so brainwashed that premiums are a ‘must have’ item when you’re looking to promote your business. If your booth doesn’t offer a premium, you look, well, lame. How could we have a tradeshow booth without some kind of premium with our name slapped on it?
Large companies, which drive the entire premium market with their huge, annual premium purchases, have the ‘fat’ available to burn. Small business are generally not in that category.
The other challenge is that the premium industry as created a who army of people who are nothing less than premium freaks. They come to tradeshows with the goal of getting every free premium they can fit into their premium bags. I call them ‘tradeshow groupies’. They visit your booth, not even remotely interested in your product or service, only to open their bag wide enough so they can fit your premiums in it.
Do you know where most of those premiums end up after a time? Shoved in some drawer or thrown out with the trash.
I received a note from a premium vendor the other day who called the use of premiums as a strategy for extending a brand. Are you serious? Sure, if you sell premiums, you have to say that.
Here’s another strategy: Invest your time and money instead on improving your website/blog SEO…that will do much more to further you business than buying inexpensive premiums.
So, the premiums industry goes on its merry way. Tradeshows will continue to shovel out tons of premiums. Booth vendors will be pleased, if only because they got rid of the final box of premiums, avoiding having to schlep them back to the office.
Of course, the happiest people are the tradeshow groupies. They continue to collect their share of the loot. They’ll get their fix every time. It’s guaranteed.
In the meantime, the real winners are the vendors who sell premium items.
Do what you will. Bow to the pressure, either self-inflicted or peer-driven, and buy them if it makes you feel better. Premiums are in most cases, a ‘nice-to-do’ but when it comes down to it, rarely drive business or branding.
How to Position Your Business in a Recession May 29, 2009Posted by David Dirks in business strategy, marketing, Marketing Buzz, Recession: How to Beat It!.
Tags: beating a recession, economic development, marketing, marketing strategy, michigan, texas
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If you want some great examples of marketing into the headwinds of a recession, look no further than the states of Michigan and Texas. Michigan, a state with one of the highest unemployment rates in the country because of a devastating hit in the car industry which is still unraveling as we speak, is marketing itself with gusto. Have you seen the TV ads touting Michigan as a place to expand your business? Or the full page ads in leading business publications like Inc. magazine? I have and I’m impressed.
Texas is undertaking the same type of marketing campaign to spur economic development in the state. So, while the world seems to be reeling from the brink of a complete economic meltdown (it isn’t over yet), these two states are spending some serious coin promoting their economic development opportunities. Are they crazy? Yes, crazy like a fox as the saying goes.
If you’ve read this blog long enough, you know that my strategy is to maintain a marketing investment in your business no matter what the economic times. What Michigan and Texas are doing is taking advantage of the fact that they are about the only two states that are investing in marketing at this time. This at at time when both states are facing major budget deficits. The investment that these two states are making is an investment into their future. Here’s what will happen. When the economy eventually returns to the positive, Michigan and Texas will be what we call ‘top of mind’ in the minds of businesses who are looking to expand their facilities and operations. They are literally planting seeds of future economic development in their states when everyone else is holding back.
Planting seeds of future business through a consistent marketing investment is much like a farmer planting seeds for his next crop. After planting the seed, nothing much seems to be happening on the surface. Days will go by and you won’t see anything coming up through the soil after the seeds have been planted. Does the farmer worry? Nope. The farmer knows that underneath, where the naked eye cannot see, the seeds are germinating and beginning to expand. Soon, when the time is right, the seeds transform into plants. In time, these plants produce the material which can be harvested.
The same goes for what Michigan and Texas are doing now with their marketing campaigns. They are planting the seeds of their own future success and, like the farmer, are doing so because they know that they know the seeds will eventually produce a fruitful harvest. In the meantime, most other states are holding back on the planting of any seed and not able to look beyond today’s dire budget crisis.
My own state if New York, with its own budget crisis, has taken the other road and has disappeared from the economic development map. They’ve even cut back on the amount of personnel focused on growing its business base in the state. On the surface, it looks like New York has no choice but to cut its own marketing investment in economic development because of a huge budget deficit. What will really happen is that yes, the state will save a few bucks today but pay a larger price in the future when the economy starts to roar back (I’m an eternal optimist!). New York state will be trying to play catch up but will find itself behind the curve and behind states like Michigan and Texas in terms of attracting businesses to their states.
Michigan and Texas do what the Big Dogz of top performing companies do as a routine: they invest in themselves regardless of what the economy is doing knowing they will reap a larger reward in the near future. It’s a lesson that all other states should heed.
PS: Another thing about Michigan and its current marketing campaign. They use actual success stories in their ads to validate their positioning that Michigan really gives businesses “the upper hand”. That’s another feather in their cap.
Beating A Recession – 12: Blow Up the Brick & Mortar! February 23, 2009Posted by David Dirks in business strategy, e-Small Business Resources, Increasing Your Profitability, Innovation: Not Just for the Big Dogz, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics.
Tags: beating a recession, online marketing, online sales, retail strategies, service business strategies, website sales
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Want to save a significant amount of annual expense and increase your profitability…and lower your cost of goods and services so you can remain competitive? Sure you do. However, many of us are still married to the concept of having a retail or service space to conduct business. I’m challenging that right here and now.
First, instead of investing dollars in ‘brick and mortar’ retail or service space, invest heavily in transferring your ‘place of business assets’ to your website and create an intranet that allows your employees to work remotely.
The growing trend is for businesses to move their infrastructure investments into creating a better user experience on the web and being able to conduct their business via the web. Invest and make your website so customer-friendly and seamless to use (navigation and purchase-orientations) that you no longer relay on a ‘physical’ presence in order to be able to conduct business.
Case in point. I have a friend of mine who recently decided to close down her retail shop that sold hiking and camping equipment. It wasn’t too long ago that she had expanded her ‘brick and mortar’ presence to increase her retail space. Then the economy took a hit and gas prices jumped. She then decided to close the retail business. However, she didn’t give up. She had maintained that retail space for over 10 years and had built up relationships with her customers, who were both local and national. She already had a pretty good website that contained excellent information of value to her customer base. On top of that, she and her husband have a gigantic amount of expertise (intellectual capital) built up based on years of experience in the outdoors. Why waste those assets just because the retail space was bleeding the business?
So she decided to invest time into expanding their website so that customers were still able to come and tap into their expertise and knowledge but also make purchases on the web. She is in the process of transforming her business onto the web and creating a customer experience that made them popular for many years. Note: She’s still refining the website to her satisfaction so I promised her that I wouldn’t reveal it. Once she is operational, you’ll hear about it via this blog.
Before you say, “So what? Isn’t everybody doing that?”…the answer is no, few local business invest in creating a robust and powerful web vehicle to sell their expertise and products.
Sure, most businesses have a website (and there are a bunch that still don’t!) but the website was usually built as cheaply as possible. Some are just awful and look like they were pasted on construction paper then slapped on the web (I wouldn’t bother then).
Here are a few things I want you to consider, even though it might creep you out to think of operating your business from your website:
1. Can I sell what I’m selling now without having to carry the burden of a retail or office space? The common reaction is, “what? and have no place for my customers to touch and feel the product?”. Yup…that’s exactly right.
Let’s say you own a health food store. Banishing the ‘brick and mortar’ seems like a trick, right? I’m mean, customers are used to coming in and asking you what you recommend for this or that issue that affects them, right? People like the personal service and the expertise you might have in the area of health foods and herbs that are designed to help with an ailment of some kind.
What if you could create that same personalized experience on your website? What if you had the ability for people to ask you the same questions in realtime…both online and the phone? You could ‘chat’ with them and make a few product recommendations. Then they can purchase your goods either right from your easy to use and super secure website or via phone order.
2. Let’s take a shot at a service based business. No products but selling services. Let’s say you are a CPA and have a few partners with some additional specialty accountants on the staff. Most firms of this description would rather jump in front of a moving bus before giving up the office space. What are they spending on space? $3,000…$5,000 a month? Whatever it is, it’s a pretty hefty sum and doesn’t include the utility bills, liability insurance, etc. that tack on additional expense.
Who said you have to carry expensive office space? You do. However, I’ll bet most of your business is conducted by phone and you probably meet them at their place of business for the face-to-face meetings that are needed (and sometimes necessary). But what if you invested instead on the infrastructure that allowed your partners and other expert staff to work from the comfort of their own homes? Shocking, huh? I understand that nervous twitch you just got from the thought but I have to tell you that this kind of transfer of ‘conduct of business’ is already underway.
Listen folks, the technology is already here that allows you to work remotely and securely from any location that has access to high-speed internet.
What I’m suggesting here is that you close down your offices and work from a distributive environment. Need to house files? Sure. You could still maintain some dramatically limited office space if you need to house phyisical files? But what if you optically scanned those docs and made them available on a securely-accessed site, so you peeps could still work? Yes you can.
I’m hard pressed to find too many businesses that couldn’t make this change from ‘brick and mortar’ retail or office space to a web-based, distributive work environment.
Let’s take a quick look at just a few of the key advantage:
1. Dramatically reduced expenses (after an initial investment for upgrading your distributive work environment and your website experience) means you have more capital to work. Freeing up cashflow is critical in any economy, let alone this one we’re in now.
2. Lower operating expenses means you can re-direct those funds to build up cash reserves, lower you cost of goods/services, hire more people, and expand your product/service offerings without worrying about the cost of doing these same expansions with the limitations of the usual retail or office space. Note: unless you can arrange drop shipping directly from the manufacturer or distributor of your products, you will of course need to access some physical storage space for warehousing and distribution of product to customers. Usually that kind of space requirement is far less expensive to maintain than a premium retail space.
3. No geographic limitations anymore. Wow. This is my favorite one of all. The infrastructure investments you make to create a website that is customer-centric, user-friendly and seamlessly allows people to buy from you means you can do business any where in the world. Think of that kind of website married to a distributive work environment takes the shackles off your ‘local’ business. You’re not local anymore.
4. You can now take the infrastructure savings of reduced or eliminated reliance on ‘brick and mortar’ and apply that to a powerful and robust marketing budget to expand both your ‘local’ and web-wide ability to sell products and services.
Take a white sheet paper out and begin thinking through how you could design a way to conduct business without the ‘brick and mortar’. Force yourself to think it through with the attitude of “How can I do this” versus “How many excuses for not doing it can I come up with?”.
In succeeding postings we’ll take a look at some businesses that have been doing just this…and doing it well.
Beating a Recession -11 February 18, 2009Posted by David Dirks in business strategy, Buzz Marketing: Lowest Cost/Highest Payoff, Public Relations Strategies, Recession: How to Beat It!, Sales Strategy/Tactics.
Tags: beating a recession, depression, marketing strategy, public relations marketing, recession, recession tactics, sales strategy, writing a book
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What if you could develop a product that could create excitement in your business and elevate your status as an expert in your field? What if that product could be profitable and help you to get into the door for new business? And, what if I told you that most of your competition, bar none, might think about it but never really execute on it. Would you be interested in that?
You should be. I don’t care if you’re a retailer or service-based provider, you can do more with that stuff that’s in your head.
Are you ready for the product? Here it is: write and publish a book. I can’t think of a better way to promote your and your business than by sharing it with customers and future customers. I know and you know plenty of people who have a great body of knowledge but it’s all locked up in their heads. In 99.9 percent of the time, it will never see the light of day in a book. That’s completely your advantage if you commit and invest the time to write and publish one.
“But I don’t know how or have the time to write a book”, someone might say. From my perspective, you can’t afford NOT to do it. In most cases, you can self-publish your book without spending a fortune on it. As a matter of fact, with print-on-demand publishing capabilities today, almost anyone can publish a book. I suggest you look at POD publishers like BookSurge (www.booksurge.com).
Let’s get one thing clear here: writing a book is not easy at all. It takes a commitment of time and intellectual capital from you. I know because I’ve already written three books and have more on the way. It takes time and effort to produce a product you’ll be proud to showcase.
The rewards for the effort you make to publish your expertise are excellent. First, I can almost guarantee that most business owners will never publish a book. Might talk a good game but won’t do it. A few might even atttempt it but never finish it.
A book that shares your expertise is a market differentiator. If you’re looking for a way to survive in the long run and create some separation from you and your competition, write and publish a book.
I have a good friend of mine who is in the herbal business. He’s already written two books that he sells at an amazing profit margin and he has created for himself a recognition for his expertise. He promotes his business and his expertise everywhere he goes. It clearly separates him from the crowd.
I don’t care what business you are in…you can do this. Landscaping business? Write a book about tips for keeping your yard looking like a million dollars. CPA advisory firm? If you haven’t written a book on a multiple number of topics to help your customers already, shame on you. Own a resturant? Share your favorite recipes and tricks/tips for making meals at home that are “5 Star Quality” but economical. Own a heating business? Graphic artist? Whatever business, you need to consider writing and publishing a book.
“But I don’t know how to write”. Then find someone who can write and help you develop an outline and draft. If you want to do it bad enough, you’ll find someone who will help. There are too many tools available out there to help you publish a book (and most are free).
Differentiate yourself from the crowd by sharing and selling your expertise. I know it won’t solve your immediate problem of dealing with a slowdown in business but the investment of time will pay off in the long run. Trust me on this, your competition isn’t going to do it.
Retailing Winners: Deep Discounters and Used Re-Sellers January 23, 2009Posted by David Dirks in Building Foot Traffic, business strategy, Increasing Your Profitability, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics, Sales Tactics.
Tags: beating a recession, business strategy, buzz marketing, differentiation, fighting a recession, increasing profits, increasing revenues, market differentiation, recession strategies, retail sales, revenues, sales, sales strategy, Sales Tactics, small business sales
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We should have seen this one coming. While most of retailing struggles, there are those who are doing just fine, thank you. I noted a recent cnbc.com report that told the story of Family Dollar Stores with quarterly profits jumping 14% in the 4th quarter of 2008. Deep discount stores have for a long time been the butt end of business jokes but no more. If every dog has its day, then this dog is having a good one. Mind you, stores like Family Dollar and 99cent Power have always done well and only just increase their sales and profit tempo by several fold in tough times like this.
Gamestop is another interesting retailing story. They sell both gaming hardware and software but with a twist: they also re-sell used gaming equipment and gaming software. Just think of it. When some people move up to the next system or change systems, they are often stuck with a substantial inventory of gaming hardware and game cartridges. However, they realized that there is a very vibrant and growing secondary market for this stuff. So they buy it outright and re-sell it at good profit. So far, the kids can’t get enough of this stuff and keep buying and selling. Gamestop also offers a discount off of new games if you bring one in for trade. Either way, they make a good profit.
You might be familiar with a franchise called “Play It Again Sports” that buys and then re-sells used sporting good equipment of all kinds. What an idea! Take the stuff that we who have kids seem to accumulate in droves, buy it on cheap (we just want to get rid of it not realize an ROI!), and re-sell it to folks who are smarter than we are (because they can buy sports equipment in excellent condition for a fraction of the cost we paid for it). It’s a great play but especially in times like these where every dollar spent is measured carefully.
What can we learn from these retailers? Here are a few questions I’d be asking myself:
- What part of my business could take advantage of this concept of offering deeply discounted or re-selling high quality, slightly used products? For example, if I owned a retail shop that sold hi-tech equipment (think like a Best Buy but on a smaller scale), I might seriously consider buying slightly used, ‘late-model’, high-quality equipment from folks who are looking to unload it for cash.
I’m not suggesting here that you sell junk. Leave that to the yard sales to move. Instead, you are creating another source of incremental sales revenue and profits by way of offering a less expensive alternative to ‘new’. Don’t worry about selling the new product as there will always be those who will only buy new…however, in these times there are a lot less of them.
- Don’t get hung up on the concept of selling slightly used products. Don’t let your pride get in the way of your ability to DRIVE TRAFFIC TO YOUR STORE. This is about creating another level of differentiation that customers will value.
- Set up a distinct area of your store or website that offers the re-sale product and promote the heck out of it. Nine times out of ten if it doesn’t work, it’s because it wasn’t promoted every way possible. You can build it but if they don’t know about it, they won’t come.
- You have to let folks know you are a buyer of product. You have to market to the people who own the product you want to resell. If you promote to sell product, you also have to do the same to buy it.
- Buy low, sell high. Establish an idea of what the used product goes for on the market given different levels or grades of quality. Ebay is a great place to start. Look there to see what used items in that category are going for.
- Set high quality standards for the used products you buy. The good news is that you don’t have to buy anything that you deem junk. Set standards for quality (and safety) that anyone could use to measure whether a used product is worthy of you buying.
This concept of re-selling slightly used product or deeply discounted new product doesn’t fit every business model. Remember, this is about giving customers and potential customers a reason to come to your store (or retail website).
Sales down? Invest in Your Sales Teams January 13, 2009Posted by David Dirks in Grow your skills, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics.
Tags: beating a recession, recession sales strategy, sales, sales development, sales training, training
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Another knee-jerk reaction to slower sales and revenues: cutting back on sales training. Cutting into the training investment you make to enhance skills and intellectual capital of your primary weapon for sales revenue is business suicide. When times are ‘good’ (yesterday), sales seem far easier to bring in than they are when times are ‘bad’ (today). When the money is flowing in and the business is riding along, investment in things like sales training doesn’t make anyone bat an eye. That all ends when things get tight. Then it’s cut, cut, cut.
I’m not advocating sales training for the sake of just training. You can spend a lot of money on sales training and get very little bang for your buck. The key to sales training effectiveness isn’t how much you spend. It’s more about what you focus your on and how consistently you do it. One-shot sales training is a losing proposition for you and your sales team.
When does your sales team need training the most? Two answers: 1) they need it on a consistent basis with enough frequency to help keep them focused on skill building and keep them learning. 2) THEY ESPECIALLY NEED IT NOW MORE THAN EVER. When the economy cycles down as dramatically as it has during the last few quarters, it can absolutely frustrate and drain the energy from the best of sales professionals. You cannot let that happen.
What do sales professionals need right now? They need an infusion of new ideas/tactics/strategies. They crave some fresh thinking. They desire sales leadership that will keep the ball moving and facilitate the kind of learning draws fresh life into the sales cycle. You don’t do that by cutting back on time and resources dedicated to sales development.
Remember, right now they are worried about the economy, their jobs, their houses, paying for kids college, and the fall their 401k just took. Do you think they just arrive at your business all fresh and ready to go? In times like these sales teams can wear down before they even get started. Then enter the crunch of falling behind on sales that used to come to fruition in a regular basis. Here are a few ways to insure you give your sales professionals the care they need to sustain themselves and win in the market place for your business.
- Make sure you have a good inventory of the skill levels of each person on your sales team. Match their skills against the sales cycle for your business and take measure of how well each person performs along each stage of the sales cycle. The idea is to create a list of sales skills that are matched to your sales cycle and can be the focus of a weekly, bi-weekly, monthly training plan.
- Focus your training efforts on sales strategies and tactics that solve current sales challenges. Ask your sales team(s) where they are experiencing the most problems along the sales cycle. Map the sales cycle out from raw lead to closed sale and make sure that time is spent on brainstorming ways to overcome any challenges in the sales cycle.
- Hold people accountable for learning. Some people are self-motivated and directed to learning. Some just need a little leading and prodding to move along. Others just sit there like a load of sand and contribute nothing to their own sales skills and intellectual capital. Those folks need to go. My bet is that those in that latter category are probably the bottom performers in your business. Get rid of them. Sales is a motivational business and you need people who are motivated to both sell and continually learn.
My definition of both sales and marketing success is when you can truly differentiate your business from your competition. This is in the context of being framed in the mind of your customer and potential customer as a business that provides more than just products and services. You can’t do that if you sales efforts are just as bad as the rest. Making a consistent investment in your sales development efforts will differentiate you from your competition. How do I know that? Trust me. I buy products and services all the time and it always amazes me at just how lousy most sales efforts are across the board in businesses both large and small.
And that my friend, is your opportunity.
Beating a Recession: Don’t Play on Price Alone! January 4, 2009Posted by David Dirks in A New Webinar!, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics, Small Business Advertising.
Tags: advertising, advertising strategy, beat a recession, beating a recession, bundling services, marketing strategy, retail sales, retail strategy, sales growth, sales strategy, Sales Tactics
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I recently saw an ad in my local paper from a tire dealer. It was a good sized ad and it had one focus: price. Price as in ‘here’s the old price (crossed-out) and now here’s the new low price’. No doubt, this is a retailer whose sales have gone down to some degree as this economy grinds to a near halt. Competing on price is a typical knee-jerk reaction to slowing sales. It’s also a good way to spend precious money on advertising that will NOT move the sales needle much at all, if any. Trust me, it won’t. Advertising is a good thing and should be done in the face of a recession, despite the urge to cut those costs. However, advertising spending that focuses only on price will only frustrate and cause a business owner to make the mistake of cutting out advertising at the point when they need it the most.
Competing on price, in any economy, is the kiss of death in my book. Here’s why. In a commodity business like the tire business, for example, you can get your tires from many places these days. Cut your prices and I’ll find someone else who either can match it or come pretty dang close. I firmly believe based on experience that the only way to win is to find ways to DIFFERENTIATE yourself from your competition. Is price all you’ve got? Is that it? Yikes. You’re in trouble because everybody can play that game.
Instead of competing on price alone, compete on services or create value added items that your competition doesn’t. For this tire dealer, I’d recommend figuring ways to bundle additional services along with pricing to show the customer the value-added services that come with that pricing. What kind of ‘additional’ services? How about:
- Free tire check ups and rotation
- Free car wash (make a deal with a local car wash and you’ll help both businesses)
- Take an extra X% off your next tire purchase on top of advertised sales prices for returning customers only
- Special customer discounts for automotive parts purchases at a local car part dealer (work a deal out with a local parts retailer and create special coupons just for your customers who purchase tires with you).
- Free gas card for $xx dollars for each purchase?
You get the idea. Bundle as many direct and indirect services as you possibly can and keep coming up with new ones and new combinations all the time (because some of your competitors will get the drift of this too and copy you). Bundle. Bundle. Bundle. Show them that they get more out of their purchase from you than just the idea of saving a couple of bucks. Anybody can cut their prices and most do. Do more. Think outside the knee-jerk reaction of depending on price cutting to solve your sales revenue problems.
Big Dogz Webinar Now Available!! Want to learn more about how to beat a recession and keep your business moving forward on the sales and profitability fronts? Check out the “Beat the Recession” page on this blog. Sign up before January 23rd and save $50! You can register at: http://www.regonline.com/CBP1250
Don’t miss out on this webinar…it’ll be the best low-cost investment you can make in your business!
Retailer Strategies: Beating the Big Boxes December 20, 2008Posted by David Dirks in Building Foot Traffic, business strategy, Buzz Marketing: Lowest Cost/Highest Payoff, Marketing Buzz, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics.
Tags: beating a recession, business strategy, increasing revenues, market differentiation, marketing, promotion, public relations, sales, sales strategy, Sales Tactics
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A regular reader of our blog, a marketing director of a two-store retail operation, recently sent me this note:
“I have stumbled across your site via Google, and have found many useful tips, and ideas to use in our day to day operations with my previous employer in the retail industry.
I am now in the retail world, and although similar in the “customer focused industry”. I am finding it harder to come up with ideas to draw in foot traffic for our unique, upscale home & garden boutique. We capture e-mails & information, send out mass e-mails with flyers, intimate wine & cheese events that have a store wide sale during that event. I’m in the process of creating a newsletter for launch Jan 1, and our owners are constantly running a sale of some sort (which I think devalues the product if there is a 15-25% off sale every day).
Do you think you can help? I need something that will create a buzz quickly, our owners want fast results…”
I called her and we had a nice chat. For the most part, she is doing many things already that will pay bigger dividends as time goes on. She’s new to the retailer she works for now and has some excellent marketing skills. After our conversation, I sent her an email recapping some of my thoughts.
I thought you might find them helpful, so I’ve added my summary to her below:
Thanks again for taking the time to chat with me today. We’re glad that you’ve found the “Running with the Big Dogz” blog helpful to you.
I thought it would be good just to quickly recap a few items we discussed:
- It seems that you are already creating additional customer value by developing your newsletter and adding other ‘event’s’ to your store schedule.
- Increasing the number customers that are added weekly to the customer database will become more critical as time goes on. I would recommend capturing all customers, even those who are from out of town. You can still send them an electronic version of your newsletter if the newsletter is packed with tips & advice on gardening, basic skills, etc. The out-of-town customers will be your internet customers of the future.
- Your strategic advantage against the big box competitors in your market is your ability to drill down to the customer level. The big boxes have no customer level tracking whatsoever. If you capture POS data for every customer, you’ll soon have a treasure trove of demographic and buying data that will help you refine your product/service set as well as target very customized offers to your customers based on their historical buying habits.
- Web-based sales should be a high priority and acceleration of for expanding sales/service via the internet is key. You indicated that they had already begun some minor commercial expansion of the website but I would make it a much higher priority than it is. Internet sales may or may not overtake your in-store sales but the goal is to add incrementally profitable revenue streams.
- Your ‘girls night out’ program sounds excellent and we discussed creating a similar package for the men too.
- I highly recommend reducing or cutting completely any marketing spend on flyers or ads in free distribution periodicals. As I noted, it might be better to spend that money on more ‘one-to-one’ marketing programs like your demographically target events, targeted direct mail offers, and more investment in commercializing your website.
- We also discussed the alternative of possibly empowering your sales team to offer an instant X% discount for buyers who need just a slight push to make the sale that day. It may be a much more constructive way to offer a discount ONLY IF NECESSARY to keep a customer from walking out. It might be more effective than the constant “gotta sell everything today at a discount” mentality. The caveat is that if the “deep” discounting works and your profit margins remain stable, then it may make sense to keep doing it.
- To get more mileage from your PR marketing efforts, especially for your special events, I’d call and develop a relationship with the business editors at the major paid circulation newspapers and other periodicals.
- One of the best ways to help ‘sell’ a marketing proposal is focusing on the benefits (not the features of the program) and use real examples from other high performing businesses to demonstrate that the concept has a track record of success.
Based on what I heard today, you are on the right track and are doing the things that will provide you with the recession-resistent flow of business. It will take time but it will come. Keep up the great work!
Have a burning marketing and/or sales issue? Feel free to email me at firstname.lastname@example.org and see if together we can come up with some ways to solve it.