My mother tells tales of growing up with her seven sisters and brothers baking a couple of loaves of bread, a couple of pies, rolls, and cakes for Sunday dinner. Even as a single mother, she often made rolls or bread for us . I would see her as I got old; she never used a recipe. “Why not? “I asked.
“Do not need to, it is basic science what needs to go in and what proportions.” She was after all a science instructor.
Should you add more flour to bread dough, it will not rise. Why? Since the yeast can not lift the additional weight. If you reduce the yeast in half and use the identical quantity of flour, the dough will not work . Either way, less remains less – something suffers.
So how do you get more with less? Retail management is wearing too many hats; are they supposed to wear another one? Rather than adding employees, are merchants supposed to provide present staff even more duties? Is a shop department manager supposed to handle an extra department’s employees?
In all these cases, something has to give because the fact is, less remains less.
This reminds me of another old saying I heard a great deal at NRF lately,”perception is reality.” No, only reality is reality. If I perceive I am Tom Cruise – sorry – it does not make me Tom Cruise. I think that makes me delusional. Only reality is reality.
Hoping to do more with less, cutting beyond the fluff and the fat to the marrow of a retail organization, has contributed to:
- Deterioration of fundamental merchandising and display techniques
- Deterioration of employing criteria
- Fewer people on the sales floor
- Less training from the few who operate the sales floor
- An emphasis on looking backward at info Instead of selling at the moment
So what should you do? Make a list every morning of what you wish to accomplish. Then prioritize it. Work through your list. What is left daily may be insignificant or important. After a while, you’re probably going to see that lots of significant things were left undone.
Are You Desperately Promoting Your Business With Daily Deals Like Groupon? Stop It
I got an email the other day regarding marketing that said,”I have been doing business with Groupon and they have essentially become my partner…I’m searching for ways to convert referrals to clients, but can’t appear to find the correct bait. It has been exhausting. I hope you could give some guidance and help save my company from the everyday deals. When we began the business many years ago it looked like a great idea, but since then it’s though we can not escape their grasp.”
As I read it I thought, are not we done with daily deals yet?
At the time Groupon reported its fourth-quarter earnings as $925.4 million.
Is it that people were ignoring my advice?
Or maybe I just had not offered as robust an investigation as I could have…
OK, here goes…
I randomly searched several similar bargain websites and discovered the following:
$100 of live plants for only $50.
This 1 retailer had sold almost 800 of those certificates prior to the DealSaver expired. I will break down the actual costs of the bargain to the merchant in only a minute, but first…
800 certificates offered for total revenue of $40,000.
Half goes to the bargain supplier = $20,000.
Cost of inventory in the vendor, assuming a keystone markup that for plants generally includes freight = $40,000.
Your COGS for conducting the garden center including center, labour, etc. that still need to be paid along with the stock = $36,000.
Your normal garden center profit you must have received on these goods at full price (between 2-5percent ) depending on trade magazines = $4000.
Additional revenue required for to break even for the retail value generated under the daily deal = $80,000.
I guess that an isolated incident is not such a big thing. . .or is it?
While exploring this blog, I discovered a rival who had just launched the identical promotion, in precisely the exact same area.
It must have worked for the other guys, right?
This is the danger of people sharing what functions for them best-practice stories among traders that are similar. If you are not considering how promotions affect gains, any success is termed effective.
Meanwhile, Groupon’s gross profit as a percentage over the local company category was 32%.
Could that garden centre’s cash are better spent?
For a fraction of the true, hard costs of bringing cheapskates to their shop, they might have sold what they had.
For full price.
To customers who appreciate an exceptional experience.
To customers who do not only show up when there’s a fire sale.
Market to cheapskates and they will find ways to provide the minimal out of their pocket to get the maximum from the bottom line.
Have a look at these remarks that followed a Washington Post article on clients coming in and just buying one thing:”I never go through the upsell hassle” and”We do not purchase any of those electronic gizmos and gadgets so nobody could upsell me on anything anyway. My 10-year-old Tracfone reverse phone works just fine.”
These aren’t profitable customers to draw…
Oh right, you still do not believe me?
How about another garden centre that found out the hard way about using Groupon to advertise their business….
I inquired Chellie Zimmerman, owner of Black Horse Farms Market in upstate New York in case the money she dropped doing a daily bargain was real. She replied,”Yes that’s REAL money LOST! Another bad thing is that your routine purchasing clients jump on Groupon when they’d have been just as happy spending $100. Of the 500 we sold around 25 percent were present customers and possibly we gained 2% as new clients.”
And from your neighborhood newspaper and DealSavers to a significant number of internet companies operating like Groupon such as LivingSocial, Tippr, and much more, their version appears to always be the same. They’re eager to take half of everything you offer with no obligation for fulfilling those certificate sales.
One woman I spoke to last Sunday told me her friend offered a daily deal to entice new clients to her spa. She is now so reserved taking care of bargains that her regulars can not get in for 2 months and are moving elsewhere.
So, like I wrote in my book, Groupon: You Can Not Afford It – Why Deep Discounts are Bad for Business and What to Do Instead, remember,”The Purchaser’s devotion is to Groupon, never for you. The client loyalty is going for their webpages, their offers, their friends – none. Your business is merely the deal of the day. After all, you did not give them the discount — Groupon did.”
The Bottom Line
I get it, you are trying any way you can to get more clients in the door. But using high-cost apps like daily prices will leave you far worse off than benefit you.
Now imagine if you took a fraction of the money and invested in your employees…
Imagine if you trained them in how to market so you would not settle for crumbs, but got the entire feast…
And once they had been well-trained, maybe you gave them a boost?
You would still have paid a fraction of what the can not overlook daily deals cost you.
So to answer the first business proprietor question….