Retail$mart

Are we facing the horse's arse?

Retail$mart — Sat, 13 Dec 2008 00:30:45 GMT

For the last post, I thought I'd wrap up by continuing the horse theme from last week:

The US standard railroad gauge (distance between the rails) is 4 feet, 8.5 inches. That's an exceedingly odd number.

Why was that gauge used?

Because that's the way they built them in England, and English expatriates built the US Railroads.

Why did the English build them like that?

Because the first rail lines were built by the same people who built the pre-railroad tramways, and
that's the gauge they used.

Why did "they" use that gauge then?

Because the people who built the tramways used the same jigs and tools that they used for building
wagons, which used that wheel spacing.

Why did the wagons have that particular odd wheel spacing?

Well, if they tried to use any other spacing, the wagon wheels would break on some of the old, long distance roads in England, because that's the spacing of the wheel ruts.

So who built those old rutted roads?

Imperial Rome built the first long distance roads in Europe (and England) for their legions. The roads have been used ever since.

And the ruts in the roads?

Roman war chariots formed the initial ruts, which everyone else had to match for fear of destroying their wagon wheels. Since the chariots were made for Imperial Rome, they were all alike in the matter of wheel spacing.

The United States standard railroad gauge of 4 feet, 8.5 inches is derived from the original specifications for an Imperial Roman war chariot. And bureaucracies live forever. So the next time you are handed a specification and wonder what horse's ass came up with it, you may be exactly right, because the Imperial Roman war chariots were made just wide enough to accommodate the back ends of two war horses. Now the twist to the story...

When you see a Space Shuttle sitting on its launch pad, there are two big booster rockets attached to the sides of the main fuel tank. These are solid rocket boosters, or SRBs. The SRBs are made by Thiokol at their factory at Utah. The engineers who designed the SRBs would have preferred to make them a bit fatter, but the SRBs had to be shipped by train from the factory to the launch site. The railroad line from the factory happens to run through a tunnel in the mountains. The SRBs had to fit through that tunnel. The tunnel is slightly wider than the railroad track, and the railroad track, as you now know, is about as wide as two horses' behinds.

So, a major Space Shuttle design feature of what is arguably the world's most advanced transportation system was determined over two thousand years ago by the width of a horse's ass. ... and you thought being a HORSE'S ASS wasn't important!

This story is somewhat of a myth; and although the truth is less sexy, the principle is that in a hyper-connected world (as explained by Chaos Theory) sometimes there are small random decisions that have major ramifications elsewhere in the system. It is particularly annoying when those decisions are arbitrary (and were taken a long time ago) and then live on to determine the path we take today: Price’s Law of Unintended Consequences.

This is my last post for this year, so I have to leave you with something significant to ponder over for the next few weeks:

What is the horse’s arse in your business? (There may be more than one.)

And here is a tip: If the answer to a question you ask is “we have always done it that way” then you are probably facing a horse’s arse.

Ciao
Dennis

PS: The truth about why the gauge is this size is slightly less romantic. I have included the ‘real truth’ in the blog post here for those who are interested.

PPS: If you feel your teams are going about the business arse-about face, [ ;-) ]I’d more than happy to come and give you a visit (holiday or not) when it suits you to chat about people development and performance assessment. You know where to find me.

PPPS: Have fun. Be Smart. God Bless you and your loved ones this Christmas.

Flogging a dead horse

Retail$mart — Mon, 08 Dec 2008 10:17:48 GMT

Traditional wisdom says: "When you discover that you are riding a dead horse, the best strategy is to dismount and get a different horse."

However, modern corporations tend to employ more advanced strategies. Let’s look at how they respond. (For a bit of fun, you can make your own equivalent responses).

Buying a stronger whip.	Roll out incentives and tweak the KPIs.
Changing riders.	Fire the CEO.
Appointing a committee to study the horse.	Or do we prefer ‘task force’?
Arranging to visit other countries to see how other cultures ride dead horses.	A strategic planning retreat with some team building thrown in.
Harnessing several dead horses together to increase speed.	Combine 2 divisions.
Lowering the standards so that the dead horse can be included.
Hiring outside contractors to ride the dead horse.
Providing additional funding and / or training to increase dead horse’s performance.
Doing a productivity study to see if lighter riders would improve the dead horse's performance.
Declaring that as the dead horse does not have to be fed, it is less costly, carries lower overheads and therefore contributes substantially more to the bottom line of the economy than do some other horses.
Rewriting the expected performance requirements for all horses.
Promoting the dead horse to a supervisory position!

How did you go? How does your organisation fare? Of course this is just poking some fun at the way we do things today, but the underlying question is ver serious. And the implications in the tougher climate more severe. It is pretty hard to know when the horse is dead - that is like picking the bottom of the market; always easy in hindsight.

Whne exactly do you to walk away from a 'dead horse' business? Any ideas?

Get Smart. Have fun

Dennis

A short piece on the KEY to successful selling in any environment is posted here.

What does a Retail Sherpa do?

Retail$mart — Mon, 01 Dec 2008 09:36:23 GMT

A Retail Sherpa walks the path up a very steep mountain – and we are currently facing quite a few of those :-). To celebrate the arrival of December, I thought I’d lead you somewhere interesting - and share a few gifts along the way.

You (and your company) are part of the Web 2.0 landscape – even your absence is noted. If you would like to download an e-book that gives a fantastic intro, go to this site and download the e-book. It is easy to understand and may just set you on a different path. Most blog readers are probably quite tech-savvy, in which case you have something handy to forward a few colleagues.

I found another site listing 41 leadership principles. some old, some new – but most worth re-visiting again:

The function of a leader is to chart a course, not to seek approval.
A leader cannot chart a course without a moral compass.
Lead with your life.
Lead people, manage things.
You can’t push a string.
A leader focuses on motivating people, not manipulating them.
In order to be convincing, we must be convinced.
Commitments are far more important than committees.

Read the rest of the post here.

The December issue of the Ganador Newsletter (Read Think Learn Laugh) was published last night. You can get your free copy by subscribing here, or by emailing me dennis (at) ganador.com.au It is short & sweet this month but worth reading.

Have Fun. Be Smart. Go Hard.
Dennis

Is there an alternative to "can I help you?"

Retail$mart — Tue, 25 Nov 2008 06:58:36 GMT

Like chess, the art of engaging a customer on the sales floor starts with the very first act of engagement. Most sales assistants have their own pet phrase, and most of the time their opening move results in failure. By far the worst possible thing your staff may say (first thing) to a customer is:

“Can I help you?’

There are practical reasons, psychological reasons and social reasons why this approach is a poor opening move:

ONE: Customers hear this so often, they have practised their response and it is likely to be ‘no thanks, just browsing.’

TWO: It is a closed-ended question and after their response, there is nowhere to go except to back off. (Less enthusiastic staff know this and love that it means less work for them – or I am I just being cynical?)

THREE: Because it is a closed ended question, you have at best a 50% chance of a positive response. (Customers are hard to find and you would surely like a more than 50% chance of a sale?)

FOUR: The question creates an imbalance in the power-relationship where a customer feels that they have been identified as being ‘in need of help’ and they interpret that as being targeted as someone that could be ‘sold to’. (These are sub-conscious reactions, but they are nevertheless real.)

The only time that this approach works is if the customer is really in a hurry and have been frustrated by the lack of avaliable service. In this case we missed the buying signals and getting a sale out of this situation is attributable to the customer's tenacity and/or l;ack of alternative options and not selling skill. Unfortunately this happens often enough to make people think that 'can I help you' works just fine.

The above opening line is the worst, but is closely followed by:

“Just yell when you need me.”
“Won’t be a sec.”
“Just browsing?”
“You all right there…?”

I won’t elaborate on all of them – let's focus instead on what to do next.

The first thing is to actually time your approach properly by reading the approach signals. And secondly, adopting the right body language clusters. Assuming you get that right, a sincere, welcoming smile is quite adequate – especially if you are wearing your badge and/or uniform (effective symbols of authority.)

OR SIMPLY

“Hi or Hello or G’day” – followed by…

“That’s a nice…" and say something positive about the merchandise they are handling.”

There are other more advanced techniques, but the hardest part is unlearning the bad habits first.

Have fun :-)

Dennis

Never Up-sell: why not & what to do instead

Retail$mart — Sat, 15 Nov 2008 06:35:03 GMT

One of my clients recorded the best day in 22 weeks last Sunday because a new sales assistant - decided to focus only on this one thing she learned from Sell$mart. (She said she lacked the confidence to try all/more things.) It thought you (regular readers) might like to know the secret.

Before I tell you; here is why it is NOT a good idea to up-sell:

Up-selling is poor retail practice.
Customers love to buy but hate being sold to.
They have trained themselves to recognise when they are being sold to, and will resist.
Even if you succeed, they will not have enjoyed the experience, so you would have won the battle but lost the war.
But most importantly it is the wrong thing to do because there is a better way that is proven to increase your average sale.

Always offer/ show/ include your most expensive item when you are in a sales situation.

In some situations (a retailer of billiard tables) increased the average sale by 81.8%, but even if not that spectacular, the best day in 22 weeks isn’t so bad either :-)

I will spare you the psychology behind this, but suffice to say that if you always include your most expensive option, you obviously cannot ‘up-sell’.

Train your staff to always talk top-of-the line.

Have fun
Dennis
PS: I am on the road with News Ltd talking to newsagents all over the state so I won’t be able to respond to comments, but I would love to read your war stories in a few days – please comment.

A free promotional idea

Retail$mart — Tue, 04 Nov 2008 22:34:32 GMT

One little freebie promotion from the vault for you to try out. (We don’t have to wait for Christmas to get into the spirit of giving, right?)

Concept: Buy two matching puzzles. The size of the puzzle depends on how many customers you have on your mailing list. (You do have a mailing list right?). If you have a very large list for an individual store you may have to have more than one prize. Build one puzzle and stick on a wall, but take one piece out of the puzzle. Make sure it is large enough and visible enough with good signage explaining what it is all about.

Execution: You can execute in one of two ways:

Customers receive a mailing with one piece of the (matching) puzzle, and they are invited to the visit the store before a certain time and to spend a certain amount, or buy a certain product.

Have a bowl of all the pieces of the other (matching) puzzle on the counter and everyone that spends more than X gets to draw a piece and match their piece to the missing gap of the completed puzzle. This way you are opening it up to all the customers who meet the criteria. (You could require them to join your mailing list too.)

Determine your prize: It can be anything from a gift voucher to hamper, but I like the idea (over Christmas especially) of pinning 100 scratchies to a mini Christmas tree. The potential value of the prize could easily be millions – which registers on everyone’s radar, and the cost is low and the customer is guaranteed to win something!

KPIs: Set your objectives for number of sign-ups (new customers), average sale, participation rate etc. Only if you achieve your objectives, will you repeat it. If not, dump it and try something else.

Total cost $300 plus mail out/communications costs.

But hey, this is RetailSmart, so you are not going to get away without having to think about the promotion.

Before you use it, run it through this little checklist and determine if it will do at least ONE of the following things for your business:

Increase the average sale?
Increase stockturn of a category that is below par?
Draw additional customers to my store?

If you would like a 1-page planning template (Word format), just email me (contact details here) and I will send it to you :-)

Let me know how you went.

Have fun

Dennis

The Oldest Customer Disease (RTD) now proven

Retail$mart — Thu, 30 Oct 2008 02:01:55 GMT

The Oldest Customer Disease is RTD.

There is an area of the brain called the ‘nucleus accumbens’ – or to use the plain English version, the craving spot. This is the spot that literally ‘lights up’ when (for instance a smoker feels the craving to light up.)

Most people would know that intuitively or believe me when I tell you. But here is the killer.

When stimulated, this area requires higher and higher doses to gets its fix. That also makes sense, right? [As matter of interest, Lindstrom (2008) has published research that shockingly reveals that the graphic images on cigarette packs actually stimulate the craving for the next smoke! The irony is that not only does smoking kill, warning people about smoking also kills even more people.]

Discounting is the drug of choice for most retailers.

But here is something worth thinking about: the pleasure derived from bagging a bargain is also an addiction that requires higher and higher doses in order to satisfy the consumers’ cravings. Consumers develop RTD – Resistance to Discounting.

And this puts most retailers on a downward spiral of ever-increasing discounts. Which leads where….?

Maybe we should take our medicine and star weaning the customers from that addiction? Start adding value rather than simply buying tomorrow’s sales with cheap discounts. (There is a time and place for discounts, and definitely room for sales promotions. But it does not always have to be 30% off.) Discounting may become the superbug that will one day resist all forms of 'antibiotics'.

BREAKING NEWS

As of 30/10/08, the second edition of The Age of Conversation has been launched. It is an amazing story about a group of evangelists (237 to be precise, some more hardcore than others) who have embraced the social media platform (Web 2.0), and decided to walk the talk and use the web to converse, to cooperate and to care.

The end result is a book (The age of conversation: why don’t they get it?) and I consider it to be mandatory reading for anyone who considers themselves as being (or having to be) attuned to the ebb and flow of the market. You could become part of it too...

For the full story plus links – read all about it here. I am pretty sure you will like it.

Have fun

Dennis

16 Sales Promotions Techniques

Retail$mart — Fri, 24 Oct 2008 07:13:56 GMT

This is the full list of sales promotions that I can think of. The list is old; and the success of the promotion lies in:

The quality of the idea.
The execution of the promotional mechanics.
The timing.
The relevance to the target market.

I thought it is a good idea to run through the list and see if there is anything you haven't thought of. Remember that just because we are tired of a promotion, doesn't mean that the customer is.

Consumer Promotions

Value adds (like free delivery, free blow dry)
Trade-Ins
Taste Tests
Premium Items
Money Refunds/Rebates/ Cash backs
Loyalty Programs (Points to redeem on incentives)
Joint promotions (with buddy retailer/ alliance partner)
Gift Vouchers
Free samples
Free gifts
Finance deals
Discounted prices (Cents-off Offer)
Demonstrations (non-food 'taste tests')
Coupons
Consumer Contests and Sweepstakes
Celebrity endorsement (signatures)
Cause-related and fair-trade connections
Buy-One-Get-One-Free (BOGOF)

Anyone add anything?

Have fun

Dennis

PS: If you think putting your teams (or yourself) through a mini-MBA (retail OR management) FOR FREE is a good idea, drop me a line :-) dennis (at) ganador.com.au, or call by getting numbers on the website.

That vision thing. Who really has it?

Retail$mart — Fri, 17 Oct 2008 01:56:34 GMT

I am intrigued by the notion of having a vision. It seems to be universally admired and often the first (if not only) criterion mentioned when discussing leadership.

What is the difference between a vision and a dream? Vision and fantasy? Vision and a point of view?

But more importantly, what is the trick in moving from NOT having a vision to having one? Like how do you really do it? Can you ‘DO’ vision; i.e. can you acquire it, or is it something like ball sense or the ability to carry a tune; it can be improved but not acquired?

The best I can do is to describe vision as a personal concept of some future outcome.

I would suggest that clarity about the required actions that will deliver that outcome need not be included in such a definition. Translation of the vision into actionable strategies is the domain of management, and could conceivably be independent of the actual vision.

If vision does not include the translation (and subsequent execution) into the actions, then vision is purely a mental construct. Vision must then be born from conscious and /or unconscious mental activity. To put it simply, it is something that springs to mind.

If it were largely the product of the rational mind, then any person would be able to create/ have a vision, and again, I am not certain that any rational view of the future (the everyday garden variety) really constitutes what I understand from the term ‘visionary’.

So, a vision must also have an element of contrariness to it; and it certainly is a view of the future that is different from where the momentum of the status quo would ordinarily take you (or the company).

So a vision should then be defined as an intuitive mental construct of an unusual future.

This new definition would imply that visions somehow come about and are not likely to be something that can be acquired through practice.

As the apostle Paul advises about the speaking in tongues; it is rather useless if there is no one around to translate it – and the same seems true of a vision.

What does all this mean back at the ranch?

Encourage mavericks and tolerate the weird – they may become leaders of the future.
Embrace intuition – nothing ground-breaking (except tornados) has ever come from extrapolating the ‘usual’ trend.
Build some triggers into your strategic plan that mandates change, even if it is only apparently change for the sake of change. (The alternative is atrophy.)
Learn to trust your gut.

We need some leadership – go for it!

Does YOUR customer service measure up?

Retail$mart — Fri, 10 Oct 2008 02:43:17 GMT

How good is your customer service?

The attached graphic should be worth the proverbial thousand words – but since I am not a very good designer, it probably needs some help.

1. Dead contact

The only interaction is by complaint form or voice mail.

2. Dumb contact

There is a person at the other end… but it does not help much.

3. Easy escalation

There is a person - who can merely pass the buck.

4. Active listening: Limited action

The next person listens, expresses empathy and makes the customer feel better, but still no action.

5. Active Response: Own the problem

This organisation is geared towards solving problems with empowered employees.

6. Pre-emptive

Pro-active organisation that actively seeks feedback and reacts to those.

7. Integrated Customer Experience

The entire organisation (using the 7-S framework) is designed to deliver customer service – in its structure, in its systems – in totality.