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Tuesday, December 15, 2009

Embrace "Shoppertainment" to build a loyal customer following or embrace EXTINCTON!


Successful retailers know the three E's of retail:  Engagement, Education and Entertainment.   The ENTERTAINMENT part of the equation is the one that leaves many retailers stymied; after all, it is not a "squeaky wheel" so it is easy to ignore when time is short and money is shorter. Unfortunately, the day when a pretty store with well stocked merchandise was a guarantee of business success has gone the way of the dinosaur.  There is simply too much competition out there!  Not only can your customer choose from other brick and mortar craft stores, she also has the low priced internet option.  Businesses are running scared and  trying harder to attract the same pool of customers, many of whom are struggling with their own more limited personal economies by shopping very carefully.  Add the impact of the shrinking value of the dollar to the mix and it is easy to see that retailers have quite a burden when it comes to attracting clientele. Eek!

What is the Crafty Retailer to do?


Get serious about your marketing plan and up the entertainment quotient!   Marketing and Entertainment work hand in hand to make your shop a place of joy and unexpected delight.  It is not hard and it does not need to involve great expense.  It does require a great deal of planning, commitment, and follow through.  Marketing has changed drastically in the past few years and what worked before may not work now.  Dinosaurs became extinct because they were unable to adapt to rapidly changing conditions.  Don't let it happen to you!  For example, when I owned my bead store our marketing plan consisted of monthly coupons placed in our local paper, a small ad in Bead & Button, and a newsletter/class calendar that was available by the register.   It was more than our competitors did, worked well for us in 1998 and we never thought to do much else.  


We couldn't get away with such a lackadaisical approach in today's market and neither will you!  Today's independent craft retailer needs to be a blogger, a tweeter, a friend, a fashion advisor, a crafty mentor, and more.  Make 2010 the year that you make it happen.  You are busy with holiday sales now, but the register will grow quiet soon.  Do not bemoan the down time...it is a gift!  Use the hours to brainstorm with your team  to identify your goals and fill out your marketing calendar for the year.  Every month should feature at least one big event and 3 or 4 minor events.  A big event might include a trunk show, a Customer Appreciation event such as a spa night,  or a day filled with Make and Take projects.


A small event might be nothing more than a silly celebration.  I bet you didn't know that January 21-23, 2010 celebrates "women in blue jeans" or that January 22 is National Blond Brownie Day.  Offer 10% off to all women who come in to the store wearing blue jeans January 21 through 23, and offer every customer a yummy blond brownie on the 22nd.  Easy enough, right?  The point is, by celebrating these nonsensical occasions, you are adding a sense of playfulness to the shopping experience which will elevate the ordinary to extraordinary

Of course, these events also provide substance for your newsletter, which should be sent out twice monthly, as well as your bag stuffers, which should be updated weekly.  A bag stuffer is simply a flier that promotes upcoming events and activities.  It is placed into the customer's shopping bag at the register, providing the cashier with a final opportunity to engage the customer by mentioning the promotion and inviting the customer to come back to the store to participate.  Click here for a sample bag stuffer.  Click here for a PDF file listing all sorts of whacky and inspiring promotions that will enable you to come up with the minor events you need to flesh out your marketing calendar in a matter of MINUTES!  

I hear many retailers complain about hosting events that were not well attended.  They give up after a few such "failures" and are reluctant to try again.  The biggest impediment to success---in ANYTHING---dieting, marriage, parenting, and even MARKETING-----is a lack of commitment.  Marketing is a process that takes time to succeed and you will need to stay with it, no matter what!    Your customers are not going to suddenly feel warm and fuzzy because you give them one free Blond Brownie on January 22!  Nope, it is going to take time for your to create a new expectation.



You will need to train your customers over a period of months that your store is THE place for warmth, fun, excitement and community.  It takes time to build this sort of following and you simply cannot give up too early.  Be nimble, be strong, be consistent, and be committed to your marketing plan.  Marketing is a process and it takes time to succeed.  Perseverance is critical.  Success will not happen over night, but it will happen if you travel down the right path!


OTHER NEWS:


Newsletter Factoid: 


REMEMBER:  Your newsletter should be more than a hard selling tool to push your product.  Your customers are your friends...treat 'em that way.  Always include a fun little tidbit that is unrelated to your store to increase your open rate and the warm and fuzzy feeling your customers get when they think about you! 

This week's FACTOID:  Tell your customers to stock up on mini candy canes at the after Christmas sales...they make PERFECT VALENTINE LOLLIPOPS!  Cindy of SkiptoMyLou  has a great tutorial for the project here.



SOLO FLYERS

We are still looking for retailers who fly solo -- no partners, no full time help -- for a research project we are conducting.  We have a nice group started, but are looking for more volunteers.  The project will be short on time, long on fun.  Shoot me an email if you are willing to get involved!


Question of the Week:  If you had a "do over"....what is one thing that you would do differently (business related) if you could?

Tuesday, December 8, 2009

Transform your retail store in a RETAIL DESTINATION by mastering the three "E's": ENGAGEMENT, ENTERTAINMENT, and EDUCATION!


These are interesting times for those in retail. Retail sales were down 5.2% during the first week of December as compared to the first week in November.  No doubt about it....Craft store owners face a bad economy and competitors who appear willing to discount themselves into bankruptcy.  Ouch.  On the other hand, the Customer Service bar is now set so low that a savvy retailer can use ingenuity and discipline to turn herself into a Retail Rock Star.  Prepare for success by mastering the "3 E's" of Craft Retail:  ENGAGEMENT, EDUCATION and ENTERTAINMENT.  This week's post will tackle engagement and education, while next week we wrestle the entertainment gorilla.

ENGAGEMENT:
Engagement is the easiest to master, yet many retailers fail to adequately grasp its significance.  Big Box retailers are notoriously weak in this area, providing the Indie Craft Store with the perfect opportunity to SHINE.  You have a clean, well lit store which is staffed by pleasant, knowledgeable employees.  You have won half the battle already!  Now you must bring customer service to a higher level by seeking to truly engage with each customer.  Engagement goes far beyond greeting  people as they walk through the door and maintaining a friendly demeanor.  Rather, it is about affirmatively forging  a genuine connection with everyone
who enters your shop.  Imagine seeing the same woman at a cocktail party.  You would put your best foot forward, going out of your way to find some common ground.

Fortunately, you already have some common ground...the customer is clearly interested in crafting or she wouldn't have walked into your store.  Now you need to build on it!  Ask questions and see how much you can learn:  Who is she?  What brought her to your store?  Does she have other craft interests?  What are her crafty dreams?  Does she harbor a desire to open an Etsy Store?  Does she aspire to display her work in galleries or is she happiest creating gifts for friends and family?  Where does she learn new techniques?  Does she read craft blogs? Which ones?   How has the internet influenced her work?  Is she a member of online craft forums?   This sort of information is very valuable because (1) It helps to define your customer, which helps you refine your business plan (online vs print ads, this product vs that product, blogs to read for your own education,etc.) and (2) you will create a true relationship with this customer, making it more likely that she will become emotionally invested in you and your store.


You are not interrogating a witness and you want to exercise some finesse.  However, it has been my experience that while consumers resent pushy sales people, they relish conversation about a shared interest.  Your customer might be an attorney, a teacher or an executive assistant during the hours from nine to five, but you can bet that her occupation is not how she defines herself.  We humans are passionate about our hobbies, however outlandish or mundane they might appear to others.  Those happy hours at the spinning wheel, potting table, are what center us!  They give us power and joy---pretty heady stuff.  Focus on that passion and watch the transformation:  she will become more animated and her eyes will sparkle as she talks about her latest knitting project or the necklace she is making for her daughter.  She will leave feeling warm and fuzzy about you AND your wonderful store and you will feel pretty good, too!  

The bottom line:  Never forget that you are in the dream business.  The woman who knits baby booties for her pregnant daughter is dreaming with each stitch...wistfully remembering her little ones of yesteryear and planning for fun times ahead.  The young woman crafting jewelry for a friend's wedding party is dreaming, too.  Maybe this will be the start of something big!  Maybe she can turn her love for design into a business....and so on and so on.  Yes, you are definitely in the dream business and a successful retailer will identify and facilitate the dream for each person who walks in the store.  The more that you know about your customer, the easier your job will be and the more profitable you will become!

EDUCATION:

Education is important on two levels:  First, you must keep up with industry trends in order to stay relevant.  If you don't know about it, you can't sell it.  You are the Fashionista of the Crafty World---YOU MUST KNOW WHAT IS HOT!  You gain this knowledge by reading industry magazines and spending at least two hours per week on the internet.  The Google "image" search engine is a priceless tool and a great time saver.  Another hint:  find some blogs that you like and then go through their "recommended links."  You will be amazed and inspired by all of the extraordinary work that is being done all across the globe.  This sort of research can be a pleasant respite from your other duties and you might find that it invigorates you and sparks creativity.  Another hint:  read every craft magazine that you can get your hands on, not just the specific few targeting your store customers.  There is a whole lot of "cross over crafting" going on and you need to leverage it.  Slow sales might be a result of  client boredom and perhaps it is time for you to show your customers that you can do more with beads than string a necklace, more with yarn than crochet a sweater, etc.

It is no coincidence that the most successful indie craft stores are those that offer the most versatile and exciting class selections.   These business people know how to keep their customers coming back for more!  If I already know how to knit and the only classes that you offer are socks and old lady sweaters, then I am not going to be inspired by them.  Similarly, once I have mastered the basics of bead stringing, I want to see more on the agenda than  complex versions of what I already know...I can figure them out by looking at the design.  I want help learning the new stuff and so do your customers!


For example, cold connection metal work is very popular in jewelry making right now.    The lovely cuff at left was crafted by lawyer-turned-metal artist Lynn Ballinger.  The technique is also used by those who scrap book, make art journals, altered books, mixed media artwork and beyond.  It is a versatile skill and could lead to a new group of cross over customers.  The craft magazines and  forums are all over it, and the entry bar is low.  That is, the line could be added for a relatively small amount of money, the learning curve is minimal, and it will sell existing product...the perfect "add on" line for a bead store.  The Winter 2010 issue of  Bead Unique Magazine has a wonderful tutorial on the subject.  I see it taught all over the country by community art guilds and in private workshops, but  many  bead store owners are completely ignoring it.   I have been told that is because "No one has asked for it."  Huh?  Please do not assume that your customers are only interested in the product you currently have on the floor or that they will go up to you and ask about product they do not see.  It is more likely that they will simply leave and order online, leaving you to wonder why your sales have diminished.  Remember, it is your job to ENGAGE your customer to find out what interests them.  Crafty education is critically important so that neither you, nor your store, become stale.

One way to get up to speed very quickly is to bring in some NATIONAL TALENT.  Shopkeepers who bring in internationally known instructors generate big buzz and cement a reputation as the "go to resource" for crafty inspiration.  It is easy to find fabulous instructors...just check out who is teaching workshops at the big industry trade shows such and TNNA, The Quilt Market, and Bead & Button.  A visit to the teacher's website will give you a list of workshops, past and present, making it easy to check out some references.  It is always helpful to talk to another shop owner who has "been there and done that" to get some tips and helpful hints.


Shopkeepers fail to consider the possibility of such a workshop because they assume that it is not economical.  The facts generally prove otherwise, particularly if you use a bit of imagination and employ outside of the box thinking.  Get a teacher who is willing to spend  two days, which creates an opportunity to teach up to four different workshops.  You can charge $95 to $125 dollars per session and instructors will work with you to include as many students as is practical in an effort to enhance profitability. Consider bringing in a multifaceted instructor whose resume would be appealing to Cross Over Crafters, so that you could align with a non-competing shop owner.  For example, Carol Cypher is a name that is well known to both fiber and bead enthusiasts.  She is an internationally acclaimed instructor who has published many books that are considered to be industry staples.  Frankly, it was a picture of one of her beautiful felted jewelry pieces that first drew me to fiber!  My personal copy of  Hand Felted Jewelry and Beads is tattered from years of loving perusal.


Carol recently told me that it was quite common for bead stores and yarn stores to join forces to "co-host" a workshop with her.  It is a win-win!  Both stores get to benefit from the promotion, the expense becomes more palatable, and by exchanging contact lists for advertising purposes they will increase their customer base!  Carol is a gifted teacher with an incredibly generous spirit.  She charges a daily fee, as well as travel and accommodation expenses, all of which will easily be covered via tuition fees.  Schedule a workshop with her and watch the magic unfold!  You will be sure to reap a multitude of benefits...financially AND creatively!

Don't stagnate, INNOVATE!


Other News:
MARKETING TIP:  Newsletters play a very important role in customer engagement.  Email newsletters that are transparent sales tool have a lower open rate than those offering  helpful information or fun factoids in addition to the sales pitch.  Toward that end, here is something to share in your next newsletter:

Carol Cypher is a talented cook.  In fact, she worked as a professional chef for 22 years before she morphed into a full time artist/teacher/author.  She recently gave me the following cake recipe, which I made for my family this week.  It is absolutely delicious, incredibly easy, and requires few ingredients...perfect for the busy holiday season!

Carol Cypher's Chocolate Decadence Cake:

12oz bag of great quality dark chocolate
4 room temperature eggs
3 tablespoonsful butter
springform pan or 10" disposable aluminum "take-out" container with straight sides, greased and floured
425 degree oven
 


1. melt the chocolate in a large bowl over boiling water
2. stir in the butter until smooth
3. separate the eggs: stir, ONE AT A TIME, the yolks unto the warm melted chocoate while beating the whites until stiff but not dry in an electric mixer.
4. Fold the stiff whites into the warm chocolate egg mixture rapidly
5. pour into pan
6. bake for 15 minutes in the hot oven.
 

The cake will look underdone and may have a crack or two. C'est la vie. It is more of a souffle than a cake so forgive and get on with it. Whip some cream with a little vanilla extract and sugar to serve on each wedge (plus it covers the cracks;)
In the summer time I like to cook fresh mint leaves on the stove in a pan of cream for half an hour or so. Strain and chill the cream before whipping and sweetening it to serve with the chocolate decadence cake.


I NEED YOUR HELP!   I am doing some research and would like to speak with Craft Store Owners who fly solo...no partner, no full time sales help.  If you are one of those ultra independent crafty retailers, please drop me an email....I want to talk to you! 



Tuesday, December 1, 2009

Are you good at "showing some love" to your customers? Do it well and reap financial rewards!


Black Friday has come and gone.  Early reports have the National Retail Federation holding firm to its forecast of a 1% decrease in holiday sales this year.  The projected decline comes on the heels of a 4.4% decrease in 2008.  Ouch!  Happily, many independent craft store owners are experiencing solid sales despite the gloomy economy.  Are you among them?  If not, it is time for change.

What is the crafty retailer to do?

Take a look at your business model and fix it, of course!


I recently had an opportunity to speak with Debby Luttrell, owner of Stitchin' Heaven in Quitman, Texas.  Deb had twenty years in the "corporate world" before she became an entrepreneur.  A sales executive with GTE (now Verizon), Debby was part of the team responsible for implementing the procedures which earned the company the prestigious Malcolm Baldrige National Quality Award in 1994.  The Award recognizes companies that offer extreme customer service. Previous winners have included Nordstrom's and the Ritz Carton Hotel Chain.

Clearly, Deb knows a thing or two about delighting her customer base!
Ms. Luttrell opened a 1000 square foot shop in 1996 in tiny Quitman, a town which is home to 2030 residents.  Her store is 80 miles from Dallas, and the nearest sizable town is 60 miles away.  Deb knew that the locals would not drive enough traffic to her shop to sustain it, so a viable internet presence was always a part of her business plan.  She started with two part time employees and 600 bolts of fabric.  She liked to sew, but did not know what a "fat quarter" was and had never put a binding on a quilt.  Fast forward to 2009....Stitchin' Heaven is now a "destination quilt shop" that boasts 7200 square feet and 6000 bolts of fabric.  She employs 18 full time employees, as well as several part timers. Her internet sales are strong and she has a loyal group of customer ambassadors...both online and in her shop.   Deb writes a business column for the American Quilt Retailer, is a featured speaker on business topics at The International Quilt Market, recently launched "Sew Much Travel" to organize quilt friendly vacations, and has a successful consulting business which includes a three day "Boot Camp" for Quilt Shop owners.  WHEW!  But wait...there is more!  You haven't even heard the best part.......the business is PROFITABLE!  Yup, Deb actually pays herself!  [Insert sounds of hootin' and hollerin' here].


Deb practices what she preaches and what she preaches is CUSTOMER ENGAGEMENT.  She notes that although she likes to quilt, business is her passion.  Unlike many craft store owners, Deb concentrates on loving her customers more than loving the products she sells.  BRILLIANT STRATEGY, Deb!  We all know store owners who hang on to inventory they like because they cannot bear to discount it, others who refuse to stock a certain product because it does not appeal to them personally, or even shopkeepers who fail to embrace new trends because "that is not what we do here."  Hmmm.... those folks have expensive hobbies, not businesses!

Deb has some great advice for those of you interested in profitability and here are some snippets from our conversation:
1.  Customers vote on you with their wallets.  If someone comes into your store and leaves without making a purchase,  they have just voted against you.  You need to figure out why there was a disconnect.  Wrong product?  High price point?  Poor Customer Service?

2.  Crafting is an addiction.  There, I said it. Crafting addictions rank right up there with booze, chocolate, and cigarettes. No doubt about it....Addictions are hard to fight.  Need convincing? Listen to a group of women talk about their bead stash, yarn closet, or secret drawer filled with UFOs (unfinished objects)---they will giggle and affect sheepish embarrassment, but it doesn't stop them from coveting the next crafty fix. I have enough Swarovski Crystal in my personal stash to last for several lifetimes.  Yet, I recently saw some Swarovski Crystal Mesh that works beautifully with fiber.   It spoke to me and I haven't been able to think about anything else in days!  It is wicked expensive stuff even for a Swarovski wholesaler, but I am determined to make the acquisition. People will feed their addictions even in lean times.  In fact, crafting provides a satisfying diversion for people who find that a decrease in disposable income means more time at home. Your job is to engage your customer so that she uses her more limited resources to cast her vote for you!


3.  Learn to become an effective leader.  Debby pegged "leadership" as the weakest link for most of the business owners she counsels.  You must have a vision for the growth of your company.  Accept the responsibility of moving the business forward. Buy a copy of The E Myth by Michael Gerber and read it.  Read it again.

4.  Learn to manage your employees.  This is a tough one for many women.  We want to be liked.  We abhor conflict.  We do not want to be perceived as...well.... "bitchy."  We need to get over it!  You have a right to tell your employees how things are going to be done and they have a responsibility to follow the rules.  Do not let your employees hold you hostage.  Who's the boss?  You are!  Thatagirl!


4.  Add "Event Planner" to your Job Description.  Deb reports that her customers are "Event Crazy" and went on to note that if she didn't have events, her balance sheet would look markedly different.  Her events are geared toward both her Brick and Mortar and Online customers.  Deb's event calendar is planned several months ahead in order to allow time for proper marketing and preparation.  An event normally takes four months to morph from  Idea to Reality.   A "sale" is never, ever simply a "sale."  B-O-R-I-N-G.  Instead, Deb hosts an E-V-E-N-T.  A current promotion is "The More, The Merrier Event" where customers receive 20% off all in store and online purchases from Thanksgiving to December 24.  OK, its been done, right?  It gets better!  Every time the customer makes a purchase during this period, the discount increases by a percentage point.  Visit one:  20% off, visit two: 21% off and so on.  The maximum discount is 40%.  The event is successful because it injects some fun and levity into what would ordinarily be nothing more than a percentage off sale.  Here are some other winning ideas a la Ms. Luttrell:


*  Anniversary Event:  Deb celebrated her 13th anniversary in October.  December is the slowest month for many quilt shops so Debby has a sharp eye on inventory control come Fall.  Accordingly, starting in September customers receive one raffle ticket for every $10 they spend.  The tickets are handed out for a six week period.  The Big Event lasts three days.  On Day One customers buy 7 of one item (excluding fabric) and get 6 MORE FREE!  On Day Two the deal includes fabrics...buy 7 yards of fabric and get 6 yards free.  Day Three is Double Ticket Day....there are no discounts on merchandise but sales are brisk, because at 3:00 there is a big drawing where Debby gives away 13 finished quilts that have been used as store samples throughout the year.   This year Deb had 120 people in the store for the drawing.  13 folks were thrilled and the rest were left to dream of the next year's anniversary sale.  Winner or not, everyone left  feeling warm and fuzzy about Stitchin' Heaven!

*Class Ticket:  You can be CLASSY or SASSY....or CLASSY AND SASSY!  The CLASSY TICKET costs $60 and entitles the recipient to attend all classes FOR FREE for a six month period.  The SASSY TICKET entitles the bearer to receive 20% off all purchases for a six month period.  Best Bet:  Be CLASSY and SASSY for only $100!  Classes are taught by staff members who are paid an hourly wage, so the free attendance is not a problem.  This program is a wonderful way to encourage a sense of community!

*VIP  Coupon Program:  Customers pay $25 for a coupon book which contains lots of great store savings opportunities, including a coupon for $25 off a high margin kit.  WIN-WIN!


* Block of the Month Program.  This promotional event is a cash cow, representing a significant bit of business.  Most quilts are made up of a series of separate quilting "blocks".  Each year Deb and her crew decide upon 25 different quilt designs and make up kits for each of the blocks required to make the quilt.  Customers pay $25 to join the club.  This fee covers the cost of the pattern and associated fees.  Each month thereafter the customer pays $24.95 for the materials required to make the quilt block.  Each of the 25 designs generally has 100 people signed up for the program.  You do the math.  OK, I will do the math.  Each quilt generates $24.95 for 12 months ($299.40) plus the initial $25 fee ($324.40 per customer).  One hundred participants per quilt design works out to $32,440.00.  Now multiply that by 25 designs.  It is a nice chunk of change for a program that follows a neat and tidy formula.  Debby has a department within the store devoted to this program.  C'mon...you have to be impressed....I know that I am!  Figure out a way to make a similar concept work for you!

Would you like to have an opportunity to learn more of Debby's tricks of the trade?  Her success is no accident and she is willing to share her knowledge.  Consider a private consultation!  Although sales might be brisk over the holidays, many retailers will experience a serious slowdown come January....the New Year might be the perfect time to consider a tune up!

IN OTHER NEWS:

WE WANT TO KNOW!  HOW WERE YOUR BLACK FRIDAY SALES?

Better than expected?  Worse than you imagined?  Give us the details!  You can be anonymous if you wish, but all who comment will be entered into a drawing for 50 meters of Swarovski Crystal Yarn!


GREAT HOLIDAY TUTORIAL:  Check out one of my new favorite bloggers, Michelle of The Royal Sisters.  Michelle has a sweet little crochet tree tutorial that could be used in a plethora of festive ways:  a holiday banner, a pillow applique, an ornament and more.  Embellish with ribbons and beads for more sparkle.  Michelle has a charming blog and offers an equally good star tutorial, so get out your crochet hook and in the words of my friends from down under, "have a play!"