In December we talked about how specialty retailers might strategically compete with Amazon. It strikes me that it might make sense to analyze how Amazon has embedded itself in the mind of most consumers, including yours.

INFORMATION. One of the things that specialty retailers claim to use as a defense against Amazon (any competitor for that matter) is knowledge. In our business, the strongest claim of course is install capability and skills. “We know how to properly educate a consumer” is perhaps the second strongest tool claimed by the specialty retailer. Let us focus on this idea. Specialty retailers know many of the intricate details that make a back up camera, audio system, Bluetooth, smart phone integration, etc… work properly. Often specialty retailers use this information to differentiate themselves from such on-line competition as Amazon. For sure, this is a great strength for specialty retailers and should be used often and with great conviction.

That said; take this small “mother-in-law” survey with a few of your family members, friends, customers or just plain strangers. Ask the following questions in this order…

1. Do you buy from Amazon?                  If yes, proceed…
2. Do you trust Amazon?                          If yes, proceed…
3. Do you find the information at Amazon you need to make an informed buying decision?                                                                              If yes, proceed…
4. Does that information come from the Amazon product page, user reviews, forums, third party resellers?

Not being a betting man, I’ll wager my left arm (not my right arm) the answer to question 4 includes at least two of the choices if not all.

The point is that Amazon aggregates a great deal of information specific to an item and delivers access to that information in a form comfortable to almost every Amazon shopper. Then Amazon offers a very low pressure add-on/alternative opportunity in the form of “other people who purchased this also looked at…” Then Amazon takes information delivery even further by offering the Amazon shopper other resellers than Amazon from whom the shopper may choose to make their purchase.

All of this information is available to the Amazon shopper, inside of the Amazon environment, in a very digestible and non-intimidating format. The consumer can choose to go as deep or as shallow in their information gathering endeavor as they are comfortable with.

The specialty retailer counteraction…

Qualify. Qualify. Qualify. Provide the consumer with exactly the quantity and quality of information necessary for the consumer to feel like he is capable of making an informed decision. Be in a position to go to the “Nth degree” of detail IF the consumer indicates he needs that detail to make an informed decision. BUT don’t try to “dazzle him with your foot work” or baffle him with big words or BS him when you are not sure. When you’re not sure, it’s best not to instruct your consumer to look it up at the factory web site. The factory is likely to take your consumer to another place to purchase. Better you should find and deliver the information to the consumer in a way that he is comfortable with.

If you don’t take this course of action, it’s OK.  Your consumer can get the information at Amazon.   

Background… My wife has and uses an eBay account. You may recall that eBay got hacked a few weeks ago and encouraged their users to change their passwords. When she tried to reset her password the site said, "We’re too busy, try later." In order to protect the checking account attached to her eBay account she attempted to remove the checking account from the eBay account. The notice from eBay indicated that a form of payment could not be removed while a transaction was pending. You can guess she made no such transaction so it follows that one of the eBay hackers was using her account. What to do…?

I called our bank and requested that they put a “deny access” to any PayPal and/or eBay request for payment. It was our attempt to prevent the bank from funding a fraudulent purchase. Now the point…

The “customer service” guy at the other end of the phone wants to know upon which transaction I wished to place a stop payment?

Me: No, I explained again, not a stop payment but a deny access order.

Bank: We have to have a specific transaction.

Me: We don’t have the transaction details. EBay claims a transaction is in progress and we did not initiate the transaction.

Bank: If you don’t want a stop payment the only thing you can do is to dispute the transaction when it posts.

Me: I don’t care what you want to call it, I don’t want a fraudulent transaction to post to my account.

Bank: OK we’ll call it a stop payment and hope that works. There will be a stop payment charge to your account…

Me: Not acceptable. May I speak to a supervisor?

Bank: Yes but I should tell you the supervisor will tell you the same thing. That’s all we have.

Me: Thanks but I don’t want to carry this discussion forward with you. May I speak to a supervisor please?

Bank: OK but you’re gonna hear the same thing.

Of course the supervisor apologized and 4 minutes later places the “deny access” order at no charge. Problem’s ROOT CAUSE…

Bank management does not empower the staff to “think” and look for a solution. It would have been simple for the customer service clown to say, “I can’t do that let me get a supervisor who can help”. Instead he felt empowered to argue with the consumer. Management has an obligation to set a solutions oriented culture that provides a superior experience for the consumer. Don’t foster this culture and you get customer service reps (sales people) who feel empowered to argue with consumers as opposed to providing thoughtful solutions. Sales? Faghettabowtit. 

So, I happened to be speaking with a person the other day who indicated a desire to be able to sell the experience, sell the store, sell her knowledge and skills and only after that, sell products to the consumer. BUT (paraphrasing her), “What if the consumer says NO? I don't want to be a pushy sales person, I hate those kinda sales people”. Everyone hates ‘em. Because they are bad at their job. Two things occurred to me which I think are VERY IMPORTANT...

ONE: A sales person is perceived as pushy when he keeps trying to close a sale WITHOUT PROPERLY OVERCOMING OBJECTIONS. Trying to push something the consumer does not want.

TWO: QUALIFYING the consumer properly, prior to presentation and then trying to close the sale dramatically reduces objections.

Corollary... Sales people who are good at QUALIFYING consumers are not so often perceived as pushy. Rather, the consumers see them as an EXPERT on the subject matter.

This is why understanding how a sales transaction is constructed and then understanding how to MANAGE THE SELLING TRANSACTION is so IMPORTANT.

Dig this... The reasons to QUALIFY a consumer (second of six specific steps in a selling transaction: Greet, QUALIFY, Present, Trial Close, Overcome Objections, Close), are many:

1      What does the consumer want?

2      What does the consumer need in order to satisfy wants?

3      What does the consumer THINK he needs to satisfy his wants?

4      Where did the consumer learn what he thinks he needs?

5      Do the consumer needs and consumer budget (willingness to spend) match up?

6      When is the consumer contemplating making the purchase?

7      Does the consumer have the authority to make and execute a purchase decision?

8      Method of payment?

For sure, each of the points above deserve several hours of discussion between the person teaching a sales training class and the attendees. I assure you, the more often the sales person knows the answer to ALL of these QUALIFICATION POINTS prior to making a presentation the more often consumers will perceive him or her as a knowledgeable expert and not so much a pushy sales person when trying to close the sale.

If you are responsible for selling products and services to your consumers, AND this concept of QUALIFYING a consumer and MANAGING the SELLING TRANSACTION seems foreign or uncomfortable to you, THAT IS A PROBLEM. It needs fixing. Call me, Eddy Kay, Dell Ellis, or somebody to get straight. Don’t wait. Do it now.

It is really important to be in charge of the selling transaction.  This “Pushy Sales People” issue is a glaring demonstration of same.

Don’t forget to look at, and tell all of your consumers about, the Ray Windsor You Tube Channel and the “Selecting A Retailer” series.

http://www.youtube.com/results?search_query=ray+windsor+select+a+retailer     

Easy and worthwhile 3-6 minutes with a new segment every Tuesday.

Last issue we discussed the definition of a specialty retailer. In a continuation of the discussion I feel it is important to identify how a specialty retailer can differentiate from the competition. As it happens I ran into just such an opportunity about two years ago. You’ll need to follow this one…  BUT it is very well worth the read. BETTER; every reader should consider a similar kind of practice.

Most consumers are price conscious and according to Eddy K, “all else being equal consumers will buy at the lowest price”. Therefore the specialty retailer’s corollary as it relates to his consumers is to “create an UN-equal tilt in their own favor”. Sounds easy but how?

In olden times just opening the door for business was enough to draw paying consumers.  There was a lot more demand than supply back then. As supply began its charge to equalize with demand, retailers had to become a little more creative. Build and sell, custom subwoofer enclosures, keyless entry systems, window tinting, custom dashboards, etc… The goal was to provide the consumer with an experience simply not available at the competition. Now as supply has begun to catch up to demand and according to some surpass demand, how to deliver such a compelling differentiator becomes an even greater challenge.

Now the “clip”. Many consumers are, or at least claim to be rather particular about their car.  One anecdotal proof of this fact is the claims you receive about the scratches, dents, rattles, burned out lamps, etc… that weren’t there before you conducted the installation. In reality some consumers are genuinely concerned about such details.   One differentiator I learned from Method Sound in Costa Mesa CA, 949-842-092 is keep common door clips in stock and TELL CONSUMERS WHY. The presentation goes something like…

“I note that you have a nice car and I’ll bet you are concerned about how it is treated at the car wash, the valet, the service center and all the rest.  We care the same way you do.  In fact we take that care further than most…  We will take the door panels off of your car to properly install the speakers.  Of course we’ll channel all of the wires with the factory wire channels, insure the waterproofing is properly in place and deaden vibrations in the door that might otherwise be annoying to listen to.  Most of the good installers understand and do that.  BUT we know that often when the car is assembled at the factory, or when the dealer has had to remove and the reattach the door panel, some of the little plastic clips that help secure the door panel to the door are broken.  I would not be surprised to find that condition in your car when we remove the panel.  OR we may accidentally damage a clip in the removal and/or replacement of the door panel.  Many times in our business an installer may say ‘well it’s only one or two clips, no big deal; the panel won’t fall off and nobody will know anyhow’, and simply re-attach the door panel without the full complement of factory clips.  To go to the car dealer and get the clips takes forever and most guys feel it’s just not so important to get all of the clips anyway.  So your door rattles just a little when you slam it shut.  Let me show you how we feel about that. Here is my inventory of door clips and here are the ones for your car.  We anticipate and have solutions as small BUT NEVERTHELESS IMPORTANT as the factory door clips immediately available so your car door panel leaves here with the same integrity intended in its original design and assembly.  Buy from us or buy somewhere else.  BUT may I humbly suggest, where ever you buy, make sure the guy understands the importance of door clips and has them in stock.  The guy who does understand and stocks door clips is paying attention.”

With this conversation you set a standard most others haven’t even considered.  Your consumer is better educated and more likely to respect the extra value in your approach to his car.  Without such an education your consumer is likely to place more importance on just looking for a lower price.

During a recent gathering of some industry types, which I felt lucky to attend, someone brought up the idea of specialty retailers.  The context was, what specialty retailers and suppliers expect from each other.  I thought it might be informative to learn how some of these folks defined “specialty retail”.  The answers were what one might expect…  Independently owned.  Brick & mortar.  Smaller shops.  Know products and services well.  More personal relationship with consumer.  Etc…  Someone even took offense at the question suggesting it was disingenuous because “we all generally know what a specialty retailer is”.

Yeah well…  I don’t think any of the responses to the question were incorrect.  Indeed many specialty retailers exhibit many of the “definition points” identified by the members of this group.  That said I feel it might be useful for suppliers and retailers who seek to engage in business with each other to have a clear and predictable set of expectations about what a specialty retailer is.  This is especially true when these two parties are building business plans that include each other’s products and services.

Just for fun; Wall Street considers Best Buy, Big 5 Sporting Goods and Fry’s Electronics to be specialty retailers.  I am confident that the people in this group did not mean to include these fine institutions in the “we all generally know what a specialty retailer is” set.  Nordstrom’s, Bass Pro & REI on the other hand…?

In the October 1993 Signal Path I set out to establish what I believe is a clear and concise definition of what a retailer must do to be considered a “specialty retailer”.  The three essentials.  It boils down as follows.

A specialty retailer is one who creates demand among his consumers for products and services which the retailer chooses to stock and provide.  A specialty retailer fills this demand profitably.

Creates demand:  (Sells)  Educates the consumer about important products, features and/or services of which the consumer is not yet aware.  Ideally these important products, features and/or services are available to the consumer at places and prices that the specialty retailer can accurately predict, in effort to position them as a part of his identity which compels the consumer to “buy here”.

Retailer chooses:  Follow me on this one, it’s a little bit scary.  The retailer has to choose which products and/or services to promote and sell.  Of course it’s the consumer who ultimately “chooses what to buy and how much to pay”.  It is however important for the retailer to help the consumer understand why what he has chosen to stock and sell is the best possible solution for the consumer.  The alternative…  DIG THIS:  Someone is teaching the consumer what to want.  It is not likely the stereo fairy doing the teaching.  If you are just meeting consumer demand when he walks in the door, if you are not doing the teaching, it is more likely YOUR COMPETITION doing the teaching (demand creation).  I assure you that your competition does not have your best interest at heart.  Your competition wants your consumer to buy from him not you, stuff he has and likely at a lower price than you can afford.  Deliver a compelling education and experience to the consumer which your competition cannot hope to meet.  

Fills this demand profitably:  Profit is the oxygen that provides the specialty retailer with the ability to teach many consumers for many tomorrows and keeps their friends coming back for more.  When you are creating demand for the stuff you know will deliver better satisfaction over the long haul (happy consumer) you’ll develop the long term consumer relationships which are the word of mouth foundation of a strong business.  When you sell these products and services for a little more money than the common stuff, you are not gouging, you are establishing and creating value.

I contend this definition of specialty retail is not confined to the size, location, staff quantity, business channel, product and/or service category, ownership, brick & mortar, Internet or other standard definitions we all know.  It is rather about the ability to identify consumer needs, educate consumers about better, create value, write profitable business and repeat this simple process with every consumer every time.

A few weeks ago I was reading a Forrester Research white paper “Why Amazon Matters Now More Than Ever” from July 26, 2012. You may be aware that Amazon is a German Maestro headphone customer. Amazon actually respects the German Maestro MRP (Minimum Resale Price) policy. I am informed that this is a rather rare circumstance.

All that said, the paper is about 28 pages in length and it says all of the usual and expected stuff. BUT, on page 22 I came across two paragraphs under the heading “Competing With Amazon Is No Easy Task”. Howzat for an understatement! Any way they touched a nerve.  I’d like to share their substance with you and I will quote briefly from the paper.

The article makes reference to the danger that Amazon represents to its more substantial competition, Target, Toys R Us, etc… BUT these specific paragraphs are quite relevant to specialty retailers and all of their competition, Internet, table-tops at the flee circus, Amazon, etc… The paragraphs start, “Amazon thrives on known brands that have little concern for how retailers price their items…  [retailers should consider] partnering with disciplined manufactures [which helps] protect one’s assortment…  But the reality is that companies need to eliminate or significantly reduce their reliance on commoditized products [brands]…  replace that volume with other products [brands]”.

The second paragraph starts…  “Rethink their manufacturer relationships…  partner with manufacturers that have consistent pricing across channels…  reduce their reliance on those who do not.”  Wait till you read this next one!  “…[with] manufacturers who do not exercise pricing discipline, retailers should consign merchandise…”

Then the paper goes on with more of the standard stuff, consumer experience, inventory availability, quick turns, technology…

I was however intrigued that the advice in these two paragraphs seemed equally sage for all retailers who find themselves reliant on third party suppliers in order to manage and grow their only asset; a long term profitable relationship with the consumer. 

All retailers gotta be engaged and constantly paying attention to their suppliers, competitors and most importantly the education of their consumers.  

Recently I found myself reviewing some writings. Mine and others. I observe that most of it is tactical in nature.  “What to”. “How to”. Not so much about the more strategic, “Why to”. It occurs to me that if we remember and focus on the “Why to” a little bit, the rest might make itself reasonably clear. 

For purposes of this discussion I shall associate the “Why to” with those motivations we had when we decided to start our business. I suspect there are at least as many reasons for starting a business as there are businesses… Make money. Live our passion. Recently became unemployed. Last boss was a boob, if he can do it, I can do it better. Turn hobby into a profession. Can’t dance. Better than jail. Etc…

Therefore, please pause a moment and recall that moment when you made the decision. Re-live the excitement, stomach acid, terror, sense of adventure. Then recall the day you got the keys, opened the door and thought “what in #%^^ did I just do?”. Then you got down to it and began to build your business. Regardless of whether you started from scratch or purchased an existing business, you received your first customer. Recall how you tried to make sure that this customer was very happy with what he purchased from you and would tell all of his friends to visit your store and purchase from you as well.

A leader will make sure that these “Why” feelings (motivations) are the foundation for every transaction with every consumer. That these feelings inform every business decision we make and every business action we undertake. That each member of the staff works similarly to make consumers want to call us tomorrow and thank us for such a great hifi and then tell all of their friends about it with great enthusiasm.

If you have read this far you have recognized there is no rocket science in these contemplations. BUT I perceive we are often overwhelmed in chasing the tactical “what to and how to” challenges of the day. 

Now and again it is useful to reflect on the more strategic “WHY”. If you can do this and then build the “WHY” into the culture of your business, I contend the “what to and how to” challenges will be much easier to overcome. You will hear a lot less “OK I did that, now what do you want me to do” and a lot more “this is what I did, this is what it got us and now I am going to do…”

If your staff understands “Why to”, there is a greater likelihood that their “What to” and “How to” actions will lead toward your goals. 

As is common practice for me, I was doing some product category research the other day. Funny; this practice is very similar to how a consumer might do research.  Look on the Internet.  Find a few local retailers.  Call to get a human’s insight.  Prepare to visit the store that sounds the best.  I have been writing this monthly ditty since July 1993 in one form or fashion.  About 21 years.  I observe from my contemporary experiences, such as this most recent research project and a review of the archives that some issues are always relevant.  In this case it is THE PHONE.  I first discussed this important business device in print, in March 1995.

Some DOs…

• SPEAK CLEARLY.  When answering, speak clearly so that the caller does not have to verify who he called.  It is not very welcoming for the caller when the guy answering the phone sounds annoyed or sloppy.  SPEAKING CLEARLY indicates your interest in the caller.
• QUALIFY.  How’d you hear about us?  Where did you learn about this product?  It is important to learn the problem for which the consumer is seeking a solution.    
• ADD VALUE.  Teach him something he doesn’t already know about the best solution to his particular issue.  The chances of making this guy your consumer increase dramatically if he thinks you “know” and are “the expert at this stuff”.
• ENCOURAGE A VISIT.  Be sure to answer enough questions and add enough new information to compel the consumer to want to visit your store.  This kind of discussion generally includes you complementing the consumer on “doing his homework” and “having such good taste” that a “visit to our store is simply a must for a guy like you”.

Some DON’Ts…

• SHORT ANSWERS.  “Yes.  No.  No.  Yes.  Yes.  Of course we beat all prices.  Thank you.  Good by.”  No chance the consumer will visit unless he finds you have the lowest price.
• STEER THE CONSUMER ELSEWHERE.  “You should check the brand’s website to get the accurate information.”  This is tantamount to giving your daughter a bus ticket to the local federal penitentiary on grooming hygiene day in order to get her fingernails trimmed.  She may indeed get groomed but the rest of the experience may not make you feel so good.
• LOCK YOURSELF INTO A CORNER.  “It only takes an hour to install”.  The consumer will expect to come in at noon and leave at 1:00pm.  This takes away all of your flexibility for other walk in business and/or unanticipated install challenges.  Such circumstances create incredibly frustrated consumers.
• SOUND SURLY.  Treat the caller as if he has interrupted your work.  The caller/consumer on the other end of the phone is your work!   

Before you scoff at this bit of advice as “Well duhh”.  Go outside, take this article with you, and call into your store and play consumer.  If you tick off the DO bullets.  BULLY FOR YOU.  Congratulate the staff.  If you tick off any of the DON’T bullets.  Be concerned.  Do training to correct this failure. 

To paraphrase Captain Renault in Casablanca, “Rick, how extravagant you are throwing away customers (“women” in the movie) like that, some day they may be scarce.”

A few months ago I received a “Tip ‘O The Day” from Eddy K.  I sought and received his permission to relate the main sentiment of his admonition including extensive quoting. This is not my normal style BUT the subject is way too important to gloss over. “The only thing harder than training, is being trained” was the title and it resonated with me. Some key contents…  (begin quotes)

“I was thinking the other day that most people would not put their life in the hands of a doctor who wasn’t trained.  We wouldn’t put our lives in the hands of an attorney who wasn’t trained.  Yet, everyday, we put our business in the hands of a sales staff that isn’t trained.  And for most of us, our business is our lives.”

“Here is a great example of not being able to break habit: A customer walks in the door and you say: “How can I help you?”  The customer says, “Just looking.” It has happened to you 1000 times.  I wonder how long it takes to realize that if you don’t want to hear “just looking” you shouldn’t be asking “how can I help you?” There are better ways to open a sale.  I know.” 

“It’s not the acquisition of knowledge that gets you ahead.  It’s the application of knowledge.” 

“Most of my students are reluctant participants. They are there because the boss made them go.  I often hear them complain:  “You know, I’m not being paid to be here.”  I think to myself:  My God, I went to college for four years and I’m still waiting for my check.  The company is paying for your education.  Information you will have for the rest of your life.  Information that will allow your career to grow.  Even if you are 22 years old and have no intention of staying in retail, this is valuable stuff.  Life is a sell.  I sell the cleaners on getting my cloths done on time.  I sell the hostess on getting me a good table.  I sell my wife on letting me have a day off.  When a manufacturer comes in for product training, he’s not the enemy keeping you from going home.  He or she is there to help you make more money.  Any time you have the chance to go to a seminar, on any topic, take it.”

(end quotes)

How true. I observe that alotta guys already know it all and therefore only grudgingly and reluctantly engage in a ‘training session” with the “factory clown”.  Often times the owner of the store and the associated sales rep depart the training session after a few moments to go outside and “yuck it up” about some unrelated topic. You see, they are too important to sit in with “schlub sales people and installers”.

That said there are corollaries for the store owner and the “factory clown”… 

Store owner:  Qualify the trainer and his subject matter. You have a responsibility to insure that your people are not being abused by having their time wasted, falling asleep to a boob who does not know the subject. Then it is necessary to set expectations for a worthwhile education and to personally participate, because it is important to your business to have capable staff who love to improve.

“Factory Clown”:  Bring your “A Game” to training sessions.  If you are not the guy conducting the training be sure that the guy actually conducting the training is worth the time and energy that the retail owner and his staff devote to the task.

If you have never experienced a good training, contact Eddy K, http://www.eddykay.com/level.itml/icOid/43

I did. It was worth it!