by Scott Harris
It appears the economy has bottomed out, and may even be on its way back up — but by no stretch of the imagination has it recovered. The retail sector has been hit as hard as the banking, real estate and automobile industries, but there’s no bailout program planned. It’s even tougher for small chains and independent retailers than it is for the large chains, which have deeper pockets and more financial options.
We’re in the middle of the holiday season, historically the most critical time of year for retailers. And one that will make or break many a small retailer. The owners of these CCBs — community-critical businesses — have two options. Number one, blame the economy, the feds or the big box stores for the problems and prepare for the going-out-of-business sale. Or, number two, do things a bit differently, take more control of the situation, get through this tough time and come out stronger on the other side.
I was at a dinner party recently and some of the guests were talking about recent shopping experiences. It struck me immediately that the first thing they talked about wasn’t pricing, sales or even the economy. It was service. They all commented that the service they have been receiving recently, at stores they frequent, had improved dramatically and impacted their shopping decisions. Sensing a good column, I pressed them a bit for more details and discovered the following.
Price always plays a role in the decision-making process, and people do realize that large chains have an advantage in this area. Most of us are paying closer attention to our money than we have in the past few years, and sales certainly get our attention.
At the same time, service plays an even greater role in the process. Most people are not willing to pay 20-30% more for an item, even with the cheeriest of service. However, they are willing to pay a little more (10-15%) for quick, polite help.
Certainly, on any item where the price is a coin toss, service wins.
This is critically important to small shop owners, who should be able to completely control the shopping experience of their customers and browsers. Many (if not most) small retail stores are owner operated and, if it’s your store, you should be working as hard as possible to make it as easy as possible for people to buy from you. At the same time, your employees should understand their primary job is to ensure that every shopper has a quality experience. My wife stood at the cash register of a large retail chain for 10 minutes while the only employee avoided eye contact and stocked shelves. She eventually set down the products she intended to purchase, walked out and certainly won’t be going back. I’m not certain what the value of a stocked shelf is, but I do have a pretty good idea of what the value of this particular lost customer was.
Treat your customer like a king or queen. It’s cliché, but many business owners seem to have forgotten this. Remember their names, throw in a few freebies, call them if you get an item you know they like or need. Set up a Twitter account (they’re free) and keep them posted on new arrivals, sales, specials, etc. For years I patronized a sushi restaurant that was good, but not great. However, the owner remembered my name, tossed in a couple of free pieces of sushi, bought me an occasional beer and made the total dining experience a very pleasant one. I ate there about six times per month for about five years, a pretty good return on investment for a bit of fresh fish and a few cold beers.
Stock items your customers want, not items you want to sell. Of course, you have to price your product competitively. Reach out to both existing and potential customers through inexpensive and non-traditional means, and after they come in the door make sure they leave with a smile, a willingness to “pass the word” — and a sales receipt!