See why the entrance to your retail store should shout about your claim to fame

I'm in a local garden centre today and as I walk through the first aisle from the entrance to the café I am a little dumbstruck. I walk no more than 40 yards and I am confronted by-

• Christmas decorations
• Alcoholic drinks
• Books
• DVD's
• CD's
• Jigsaws
• Toys
• Food items
• Non-alcoholic drinks

And then the café itself

I'm struck by a retailer that doesn't really know what it wants to be and what it stands for. I've used this phrase in my blogs before and it means so much-

Decide what you want to become famous for.

Now I'm not talking about the celebrity type of fame that seems to float the boat of so many people today. I'm talking about the famous part of your retail business that customers will talk about and return for. It's been referred to as your USP or your diffetentiator and it's what makes you a success. Woolworths was the prime example to me of a retailer that didn't know what it wanted to be. It tried to be all things to all people and became unimportant to many. I've also blogged about Tesco trying to do everything but ending up doing everything worse than their rivals-

http://mytimeinretail.blogspot.com/2014/06/tesco-sales-drop-is-about-more-than.html

I don't necessarily think that a retailer shouldn't sell more than one type of product, but the initial message should scream from the rooftops about what you stand for. This retailer I'm in today states that "we do all sorts of stuff." It's not a sparkling message.

Looking around the garden centre, there are places of interest, areas where they do stand out from the competition. The café is very busy and the food looks great quality. The Christmas decorations are vibrant and have a great mark-up. The indoor plants are well-priced and different varieties to other garden centres I've been in. One of these areas should be the absolute focus of the attention as the part of the business that leads customers to walk through the door and return.

For your own business you need to look at what you are doing and make a decision. The decision needs to be around what you think you should be famous for. Once you (and your team) know what this is then position your store so it talks to your customers in those terms-

"Mr and Mrs customer, this is what we do."

See how converting loyal customers into into brand advocates increases your income

I've worked with retailers over the years and a recurrent theme is the question of how to reward customers. I've looked in this blog at different ways of rewarding your team but having ways of rewarding your customers can help to transform a retailer. This is a large subject so I've split it into two blog entries. The first one is today.

A constant theme of my blogs is turning customers into loyal customers into brand advocates, so it's probably best to start here and explain what I mean by these three categories-

Customers

This is simply people who buy something in your shop. They may be passing by and see something in the window, they may be a visitor to your town and come in to have a look around. They may shop with you once and never again. This doesn't mean that these customers are unimportant. You will need one-off customers and irregular visitors to help your sales. They can be attracted to your door by promotions, a great window display or word of mouth. However they arrive is unimportant. The fact that they got to you gives you a chance to impress them and get them coming back time and again. This turns them into the next level, the loyal customer.

Loyal customers

A loyal customer is one that chooses you over another. You may have one or more stores in your town that sell the same thing but your loyal customer will buy from you over your competitors. You can create loyalty with price, promotion or excellent customer service as well as other means. Supermarkets in particular fight for loyalty and this has sparked the loyalty card and the price matching over the years. A loyal customer will return to you over and over again unless something happens in their relationship with you to break the loyalty. It's a well-worn phrase that it costs so much more to win a new customer than to keep an existing one and that's the relationship that loyalty projects attempt to protect. Many businesses stop here. Having a band of loyal customers spending good money with you in a regular basis, plus the odd infrequent customer can be a lucrative proposition. But I propose looking to the next step.

Brand advocates

And I strongly believe that brand advocates are the next step for a retailer to increase success, and in a more interesting way. The ways in which you can achieve this will be the subject is the second part of this topic and my next blog entry. Today I'll describe what a brand advocate is and the effect they can have on your business. A brand advocate is someone who goes out of their way to tell other people about you. It may be one of several ways of doing this-

• Bringing their friends into your store
• Talking about you on their blog
• Positive social media comments about you
• Telling people face-to-face about how great you are

The brand advocate is a marketing tool that you can rely on to bring you more business and all it costs is a great relationship with them. Having several brand advocates starts the cycle off again for the next set of customers. They arrive at your doorstep because of a brand advocate, and you will hopefully turn them into loyal customers and the next brand advocates. How you start this relationship and maintain it can be interesting and fun, and we will take a look at that in the next blog.

See the lessons to be learnt from this week's The Apprentice

I've started watching this series of The Apprentice (against my better judgement) this week. The tasks are interesting, helped by the editing, and the characters are as comical as they have been for the past few series. I applied for the last series of the programme and got through to the audition process - the final few hundred from twenty-something thousand applicants I was told. The opportunity at the end of the process has far more value than the process itself.

The first task was a buying and selling task - go to the market and buy fish, turn it into products and then sell it in the city of London. One team made a profit of £1.87. And this is where the whole process falls down. If this were real business then there would be much more expense to take away from their paltry £1.87 profit-

Wages for eight team members

Production costs

They were given use of a facility to turn their raw fish into saleable products, and this also took energy for the machinery, cookers and lights.

A trading licence to sell food on the street

Purchase or hire if the stall

Hire or purchase of the cooking equipment

All in all, these tasks in isolation mean very little. I'd prefer to see a programme where the team develops a business over the course of the series. Given an amount of money st the start, they have to buy and sell cleverly to increase their money for the following week's task. Lord Sugar can still fire someone every week, but the team can work their way through.

So what's this got to do with me an independent retailer?

Well control of costs underpins every single business. And it's by looking at your costs and the effectiveness of every penny you spend that will allow you to succeed. And for every pound you save, you have three choices - pocket and extra pound of profit, reinvest another pound into area you know succeed or cut your customers prices by another pound.

Looking at all of your expenditure to ensure that it works as hard as you do is a fundamental part of running a business. I'd suggest three ways of ensuring you get this as right as you can.

Regular reviews of your costs

I'd suggest that you look at your expenditure and conduct a full review on a regular basis. Annually at least, every 6 months is better and in some instances quarterly. This ensures that things never get away from you. Having your finger on the cost pulse means that you never get to the point where you look back and think "where has all that money gone?" To be able to look at all the outgoings and see if savings can be made will work out for you in the long run. Going hand-in-hand with this is the expenditure on marketing.

Analysing the success of your marketing spend

If you take nothing else from reading this blog, then take this one piece of information with you. You need to account for what you spend. By this I mean that when you set out a marketing campaign, you need to have an idea of what business that campaign brings. To do this you have to speak to your customer at the first point of contact. It's from there that you will understand how they arrived with you.

For example, you spend £200 per month on advertising on a particular website and £100 per month on newspaper advertising. If the website brings you £2,000 in sales per month then it earns 10 times the spend. If the newspaper brings you £500 per month in sales then it earns 5 times the spend.

You will see that the website is twice as profitable in terms of marketing spend than the newspaper.

Speaking to people when the opportunity arises

I know that it's impossible to respond to every marketing call or email but there will be areas in which it's profitable to listen to people. The areas in which you want to talk to people will be dictated in part by the areas above. If you have identified an area in your cost review then this will prompt you talking to someone who contacts you. If you have an area of marketing success, then you'll want to be able to repeat this success. And in some areas you will just see an idea that you like and decide to investigate.

Avoid being an overspender like the contestants on The Apprentice and have control over your costs.

See why inflation figures heighten your need to compete on things other than price

The latest inflation figures were announced this week and it's not good reading for retailers-

http://www.bbc.co.uk/news/business-34514135

The figures show a fall in the inflation rate to it actually showing a negative. This means that prices are falling.

Why is this bad news for retailers?

This is particularly bad news for retailers of high price items. The fact is, that if consumers see prices falling they will put off their large purchases in the expectation that prices will continue to fall and they can save money. This effect really starts to kick in when prices fall consistently over a longer period of time. It works more on high ticket products - televisions, cars, gadgets and computers. So if you're a retailer of these items what can you do? The first thought when looking for customers is often price but that seems like the wrong idea on this occasion. Further price cuts can only deepen the feeling that prices will continue to fall. And increasing prices at this point will put you at a disadvantage to your competition.

So the best thing to focus on is the quality of what you sell. Having a quality product can sell no matter what the market is doing. Look at Apple - their products sell in times of inflation or deflation. Now, we can't all come up with an ipod, iPhone or iPad idea to help our retail business but you can focus on the quality in your own business.

Finding what makes you different

As a retailer you will probably already have an idea what it is that makes you different. It's what sets you apart from other retailers and it could be one of many things-

• Your loyalty scheme
• Your products
• Your customer service
• Your special offers
• Your events

I've written many, many times in this blog about understanding what you do better than others. And this is what you need to concentrate on. I'll give you a few examples-

Waitrose have high prices but their customers love their absolute quality and great customer service.

Boots are very pricey but focus on their loyalty card and customers return.

Aldi mixes price with availability and customers have loved this balance.

So what is your USP? What can you do better than your competition? What are you capable of that nobody else in your town is? These are the things that will drive you forward.

Communicate this with your team, communicate it with your customers and look away from just dropping your price to compete - there are other, better ways to differentiate yourself.

See how a diary of events can help you to plan for next year

I've been around and about shops over the last few weeks and there's a lot of shops trying to make the most of things in what's traditionally a bit of a lull between Back To School and Christmas.

There's a lot of retailers stocking rugby-related products with the World Cup being played presently. I shopped in Durham today and there's an ancillary Back To Uni trade here, as in many university towns and cities. And it's these events that I think can make the difference for independent retailers. I think that keeping a diary of events and how they affect your trade and your team can make a huge effect in how you react to these events in the future.

Planning a broad outline of the events and mini-events of the year will provide you with a framework of the year. You will need to ensure that you have prepared something to reflect these events - extra staff, stock that matches the event, dressing up the store, etc.

You'll need to take account of-

• Easter
• Christmas
• Hallowe'en
• Back to school
• Back to university
• New Year
• Mother's Day
• Father's Day
• Sports events (World Cups, Olympics, Wimbledon, etc)
• Valentines day
• Pay day weekends
• Local events

It's by having this set up and making notes of how it all affected you (including notes of what you did differently) that will give you a framework for these events next year.

You can try different things when approaching these events. There are many options, including-

• Changing opening hours
• Bringing more staff in
• Staging an in-store event
• Sending out email reminders to your mailing list
• Giving extra loyalty points or coinciding a sale with the event

It's by trying these different things and having notes to refer back to that you will start to build a picture of what works.

NOT EVERYTHING CAN BE BOUGHT ON THE HIGH STREET

Think about what you want your promotions to acheive

I've started looking in more detail at some promotions in certain retailers, and I think that you can split promotions into two main types.

Promotions that drive people to your door

Promotions that influence your customers when they are in store

I think that you can split promotions in this way and I also think that you should think about your promotions in this way. Why? Because you need to drive people to your door AND you need to influence people's purchasing decisions when they are stood in your store, looking at your shelves. There needs to be a balance between there promotions as you attempt to achieve both of these things in tandem. A successful retailer will want and need to attract new customers with their promotions that drive people to their door. These can be linked to their loyalty cards, headline offers or outdoor advertising. The idea behind this is that you, as a retailer, can expand the customer base that frequents your shop or shops. From this increased customer base (and you providing them with fantastic customer service) you can increase your sales.

The other promotions will actually affect people's buying decisions when they are stood in front of your shelves. This is mainly aimed at your existing customers - those that come into your shop as a matter of course. From the starting point of having these customers walk through your door anyway, you want to ensure one of the following three things-

1- They spend more money than they came in for.

2- They buy when they may not have expected to.

3- They find a reason to come back.

This isn't always an easy feat but promotions such as multibuys, the location of related sales close to each other or announcements of coming events are all great ways of talking to customers with the aim of achieving one of these three things.

I'll look at little more closely at these three promotion types-

Multibuys
These are the tool of these three that will get your customers to buy more than they came in for. Take many, many national retail chains that have 3 for 2 promotions running is some or all of their shops at different times. The idea is that once the customer has cottoned on to the additional maths, the sale is logical.

The maths is as follows-

ONCE YOU HAVE BOUGHT THE FIRST ITEM (the one that you came in to buy)
THE TWO REMAINING ITEMS ARE BUY ONE GET ONE FREE

From this mindset, most customers then buy more than they came in for.

Associated sales
These are a great way of achieving points 1 and 2 from the above. The basic example from my early retail days was a promotional end of associated products. At Christmas, we used to sell wrapping paper

like it was going out of fashion. But the clever retailer made a promotional end of wrapping paper, sellotape, gift tags, a sellotape dispenser and bags of ribbons and bows.The difference in sales is astounding and customers walk out with something that they perhaps hadn't come in for.

Event announcements
This is the one area of the three that I find a little resistance to, from retailers that I speak to every day. The resistance is in the fact that retailers are worried that they put off today's customer until the event, if they are promoting a great event. For example, if you are offering double points on your loyalty card next week, then a customer that walks through the door today may be out off buying until next week.

The converse could be actually happening. A customer could walk in today to check out your prices and find that you are slightly more expensive than a competitor that they have just checked, Whilst they are in the store, they see your offer and decide that it would be better to buy with you rather than your competition.

I think that every announcement, promotion of piece of marketing that encourages your customers to spend with you is positive and you shouldn't hold back with the worry of simply postponing sales.

Payday weekend bonanza with Bank Holiday thrown in as well!

Is bonanza time for most retailers this weekend as we have the weekend, it's a payday weekend and it's a bank holiday weekend. And I can see many times and retailers making the most of it. There are offers, events, fairs and all sorts of things happening all over the country as retailers try to compete with other attractions for people's time and money this weekend.

The national chains seem to have set themselves up for a big weekend, so it's time for the small independent retailers  that make up much of my audience to up their game.

As I've said many times before in my blog, the first step on the road to payday weekend success of planning your staffing. With me being away for three weeks and forcing myself to stay off the internet I haven't blogged this early enough but there are always lessons to be learnt and this will stand you in good stead for all payday weekends, bank holiday weekends and other events throughout the year. Once you have your staffing sorted, it's time to look at how you can offer something different and special at this time. I've already stated that you will not just be competing with other retailers but other attractions on a weekend like this. Giving families a reason to visit you rather than a park, a museum, a theme park or the seaside is part of ensuring success. So I'd say having something exciting for the children is a great idea for this weekend. What you do may well depend on what type of retailer you are, but be imaginative and think about what can keep families in your store for longer.

It's also a god idea to ensure that any offers you run coincide with a weekend such as this. If you are planning a sale, a but one get one free or other promotion them starting it this weekend is a great idea. It gets people through your door that may not normally shop with you and give you a chance to convert then into loyal customers. It will also give you a chance to cement your relationship with your existing customers who may need a little push to spend more with you.

The final piece in the jigsaw as far as I'm concerned is to make sure that your team are motivated and enthused about the weekend trade and any event you are hosting. Get them involved in the ideas process and you will get their buy-in for the event itself. If it's fun for staff and for customers then you've probably got a winning formula.

Keep this blog entry and re-read every time there's an event coming up - you'll be amazed at how useful it can be!

NOT EVERYTHING CAN BE BOUGHT ON THE HIGH STREET