Wednesday, April 29, 2009
1. Your Business is Always Open
No matter what the posted hours are for your business, operate as if you’re never closed. Think of it this way, when your doors are shut, do your customers stop spending their money? The traditional hours of Monday through Friday, nine to five, are a very antiquated way of thinking. This is a global economy that’s always “on, open, or alive,” 24/7/52. When you’re sleeping, someone halfway around the world is working. Your business should have a 24/7/52 mentality.
2. Pennies Really Do Add Up
Many businesses make the mistake of looking at the big financial picture and forgetting the small components. Focus your attention on each penny within the business. Surely there is a penny to save here and a penny to save there. Just look around, and when you’re done, over time, that penny will multiply to thousands of dollars a year that can bring down the bottom line. A penny really does add up!
3. Appearance Becomes Perception
Perception is everything and you never get a second chance to make a first impression. In today’s society, people make judgments quickly and labels stick. Take a look at all areas of your business, even the ones customers never see. What’s your first impression? Is everything clean and orderly? Would you like to spend time there? If things don’t look good, make them better and if they’re good, make them great. Remember, you also set the tone for employees in the way you keep behind-the-scenes areas. Their attitude about the business and working environment is conveyed to customers in their interactions.
4. Know What the Joneses Are Doing
Do you know what your competitors are doing right now? Know as much about your competition as you know about your own product -- from a customer’s perspective. The only way to prevent the competition from taking your business is to have a better product and market it more effectively. You should know your strengths and weaknesses compared to theirs, and what success and failures they’re enduring. Know the marketplace, the forecast, and how your product compares to the competition. Learn about the “Joneses” today, or one of those “Joneses” may buy or send you out of business tomorrow.
5. Find What Makes You Different
What is it about your product that stands out? Why should someone do business with you rather than someone else? From concrete visual differences to perceived value and price, sit down and make a list of what truly makes your business different from the competition, then focus your marketing efforts to exploit those differences. Marketing to your differences sets you apart in the mind of the consumers and creates a unique identity in a tight marketplace.
6. Reward Current Customers
Attracting new customers takes more money than retaining current ones. It just makes sense to make sure your customers come back. A great way to do that is to implement a customer loyalty program or a reward club. Hotels have been doing it for years and it has driven an amazing amount of brand loyalty. What does your business do for repeat orders from long-standing customers? Do you know who your top twenty clients are? Another great reason to install some sort of repeat customer loyalty program and reward club is that it allows you to capture valuable database information from your clients.
About the Author: For a free weekly ezine with valuable tips for your small and mid-size business go to http://www.theprofitrepairman.com/free_ezine.html Tom Marquardt, The Profit Repairman®, gives hands-on, ready to implement strategies to increase the bottom line, change flat revenue growth, and save your company's fate.
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Wednesday, April 22, 2009
Take a moment to view this short video presentation by Jon Skinner of the Verde Group for the International Council of Shopping Centers on "Retaining Customer Center Shoppers". In it, Jon discusses a shopper survey done in conjunction with the Wharton School of Business of over 1,000 shoppers. While the target audience is shopping center managers, there is quite a bit that commercial district managers can learn by applying similar principles to our work.
So, why do I keep talking about shopping centers when this blog is about commercial districts? Well, because frankly I believe that there is not much of a difference. Our commercial districts are basically open-air (mixed-use) shopping centers - but instead of being owned by a single owner with the power to control and improve the environment, they are owned by many owners who are often working with different objectives and goals. This only making our work more difficult, but essentially, the same.
I really appreciate this video because it identifies some key issues that as to why shoppers don't return to a retail store...this is need to know information during difficult economic times!
Here is what they found:
- The most significant problem that drives shoppers away are 'sales associate problems', i.e. customer service problems that a shopper may encounter with someone working at the store. Amazingly, 70% of customers who don't return to a store do so because of customer service problems they encounter in a store. And interestingly enough, WOMEN are more bothered by these customer service problems than are men. To make matters worse, over 50% of shoppers will not shop at a store they have never even been to because of a negative comment about the experience that a friend or colleague had at the store. Wow.
- Another very critical point (and perhaps most important for commercial district revitalization efforts) made by this research is that the shopping center itself plays a significant role in shopper satisfaction. In the case of commercial districts the corollary is what happens on the street. I call this the 'outside-the-store' or 'on-street' experience. This is super critical for commercial districts because at the end of the day, it is the 'outside-the-store' experience that commercial district management entities can control most effectively. Everything from street scape, safety/security, services, events, etc. make a big difference to shopper satisfaction. These outside-the-store experiences are what ultimately set the stage for the in-store sale. The research presented here makes it clear, retailers DO suffer significantly when the district itself is shoddy, unkempt or unsafe. Yet another reason to make sure you always keep on eye on those basic housekeeping details.
Tuesday, April 21, 2009
When hard times hit, most businesses cut back on spending. However, a recent New Yorker article ["Hanging Tough: Financial Page"] uses a real life case study between Post cereal and Kellogg cereal to make the point that investment in advertising and marketing, particularly during a recession when most competitors are cutting their advertising budgets, can be the best investment a company can make in its long term growth. The research has been done...beginning in 1927 when "economist Roland Vaile found that firms that kept ad spending stable or increased it during the recession of 1921-22 saw their sales hold up significantly better than those which didn’t." This lesson clearly applies to commercial districts...now is the time to get smarter about advertising your district and the businesses in your district. When customers are few and far between, it's important that you help your businesses hustle for every customer dollar that exists. For some good marketing ideas, see our recent blog entry "Twelve Tips for a Recession-Proof Commercial District".
Tuesday, April 14, 2009
Building on Larisa's most recent post, an interesting article appeared in Crains NY about how local independent retailers are identifying creative ways to get people through their store doors. In addition to sales, they are putting on special events that draw traffic for a specific reason with the hope that the consumers will stick around and shop afterwards. For example, one womens clothing store had a "Golden Girls" event where the store hired a jeweler to appraise and buy customers' unwanted gold jewelry. The idea was that once the women had some cash on their hands and they were already in the store, they might stick around to shop a bit.
Other stores have offered their locations as drop off points for a specific charity. Folks walk in the door to drop off gently-used clothing, for example, and receive a discount on that stores merchandise.
I'd love to hear if any commercial corridor managers out there have worked to create promotions like this along the same vein and how they are working out.
Monday, April 13, 2009
Another interesting article surfaced today that talks about finding ways to keep customers during an economic downturn. "Retail 3.0: Keeping customers in an economic downturn" published in Silicon Valley's own Mercury News speaks to a few strategies that businesses can employ to retain customers whose spending habits have changed, including focusing on customer service, value, and targeted promotions...all things we know but that bear repeating many times over during these difficult times. We have outlined some of these on this blog already (see what we wrote about Starbucks' strategies for making through the recession here). Be sure to share these ideas with your business owners and coach them through the application of these principles to their businesses...it WILL make a difference!
Wednesday, April 8, 2009
The most cost effective way for you to do this is with an effective email marketing campaign. However, email marketing falls flat without a great email list. If you haven’t been building your email list, there is no time like the present. Your email list is the most powerful resource you have as an organization to get the word out about your promotional events, in-store discounts and sales, not to mention a good way to solicit volunteers, encourage fundraising, and keep your constituents up to date on your districts happenings.
Here are some basic strategies to keep in mind:
- Make sure every page of your website has icon to sign up for your mailing list. Make the registration feature stand out.
- Collect business cards at participating downtown businesses – offer a reward or raffle to those who sign up (perhaps a gift certificate or meal at downtown restaurant?)
- Add a signature line to all your outgoing emails that includes a message and link to subscribe.
- Be sure that subscription comes with something of value – a newsletter, discounts, etc.
- Ask everyone who calls your office if they would like to add their email to your mailing list over the phone.
- At every speaking engagements and public meeting, be sure to pass out sign-up sheets to promote your newsletter and other information.
- Ask if other websites will allow you to put a sign-in link on their page (this can include local businesses that have websites, the local Chamber of Commerce, etc.)
- If you’ve got a newsletter, distribute press releases based on the articles and make sure the release includes information on how to subscribe.
- If you send out mailings, make sure to include information on how to subscribe to email updates.
- If all else fails, consider purchasing or renting a few key mailing lists. Local trade associations, chambers of commerce, local businesses or community papers may be willing to rent you their lists for special events. Be sure to include information in those mailings that tells them how to sign up for your mailing list directly.
Remember, the better your email list, the better you will be at spreading the word about your district businesses!
Tuesday, April 7, 2009
Yesterday's NY Times had an interesting article about how malls are trying to fill their vacant retail space (http://www.nytimes.com/2009/04/05/business/05mall.html).
Some of their solutions were extreme (an indoor wave/surfing machine--the picture in this post appeared alongside the NY Times article) but a lot of them focused around bringing in retailers that are still doing well in this economic environment (value-oriented retailers) or finding non-traditional uses for their available retail square footage, such as community clinics, libraries or office space.
This is *exactly* the kind of strategy we recommended to a recent client in one of our traditional urban commercial districts who had some beautiful new retail space that unfortunately debuted just as the market was tanking and retailers started to retrench expansion plans. If you have vacant spaces on your corridors, are there short-term or nontraditional uses you can think of to fill that space?
Monday, April 6, 2009
The author, Andrew R. Levinson, is the Managing Director of Riverside Strategic Advisors, LLC, a small business and nonprofit consulting firm located in
As the economy weakens, middle class Americans are eating out less frequently and cutting back on their nonessential shopping. Small business owners – especially those who own their own restaurants or stores – are now seeing the consequences. As their revenue streams have dried up, it becomes increasingly difficult to survive, let alone thrive. Most small business owners report that commercial rent is their primary business expense. Today, many are struggling to keep up with rent obligations that were negotiated years ago, when revenue streams were considerably stronger. Fortunately, most good landlords recognize that having a tenant go under is good for nobody. Now may therefore be a great time to modify your lease—even if it’s not up for renewal. Below are a few tips for doing so.
- Don’t Wait Until It’s Too Late! The worst mistake distressed retailers make is keeping quiet. In a down market, landlords do not want their properties to go dark because they can’t be sure how long it will take to find a new tenant. So talk to your landlord. Hopefully you’ve maintained a good, working relationship with him. If you let him know the state of your business, you should be able to work something out so that your business survives its rough patch and your landlord won’t need to find a new tenant in a difficult market.
- Know Your Neighborhood. As with any negotiation, it’s important that you be armed with as much knowledge as possible. Is there a lot of vacancy in your neighborhood? If so, your landlord might be especially willing to work with you to keep you on. What are other folks in your area paying for space similar to yours? If you’re already paying below-market rents, you may not want to “rock the boat,” but if you’re rent is above-market, your landlord should know. And if you’re negotiating a lease renewal, this knowledge will help you determine whether you can afford the time, money, and business disruption associated with moving a business from one location to another.
- Be Creative with Cash. There’s more to a lease than just the base rent. Some landlords will accept lower base rent in return for a small share of gross sales. Then, as your sales improve, your total monthly rent will increase proportionately. There may be other terms in your lease that you could revisit as well. Perhaps your common area maintenance charges should be reevaluated for fairness, based on the past several years.
- Keep Track of Time. Some landlords, especially in a sinking market, will accept reduced rent in return for the stability of a long-term tenant. If your lease is going to expire at a time when your landlord thinks he could have trouble renting out the space, you might offer to stay on board for a longer term in exchange for a rent reduction today.
- Read the Fine Print. Even if you’re not able to renegotiate how much money you send your landlord each month, there might be wiggle room elsewhere in the lease. Perhaps you don’t need as much space today as you did when you first entered into the lease. If that’s the case, see if your landlord will allow you to sublet the excess portion of your space. Or maybe your landlord would be willing to subsidize certain physical improvements to the premises that could increase the value of his property and improve your place of business. A new façade or better lighting may be just the thing you need to bring in more customers.
Obviously the best lease modifications will be custom-tailored to the needs of your business and to those of your landlord. The key to success is to have a dialogue that is as open as possible. In the long run, you and your landlord should both come out ahead.