What is Your #1 Obligation to Your Retail Customer?
Posted by admin at 16:07 | Filed In Customer Service Tools
What is your #1 Obligation to your customer? When I ask that question to retailers they generally say, To provide the best service to our customer, or To help the customer get what they want. or even To provide an extraordinary experience so they come back.. While these things are all good and important, I think that there is something even more important.
Sew and Vac retailers have a tremendous opportunity compared to other retail businesses. Most retailers have one or two revenue streams. We have at least four! Machine sales, service, parts and classes. Depending on what you sell, you may also have two to six subcategories under each of these main categories. Analyzing them individually will enable you to maximize the profits that you are getting from each of them. Saying I do service to get machine sales. or I do warrantee work just to get them in the door. could be limiting your ability to make better profits in all departments of your business.
How long have you been in business? Sixteen out of seventeen new business last less than eight years. If you are a new business or established, you need to be innovative and always be looking for ways to make your business more profitable. Notice I didnt say increase your sales. I said more profitable. There is no reason to grow your business by 20% if your bottom line profit stays the same or goes down. Network with other retailers to see what they are doing. If it works for them it will work for you. Your customer is no different than theirs. Hire a consultant to assist you. If you are doing business the same way that you were five or ten years ago, you need help!
The natural tendencies are to make the deal no matter what the price. If you dont sell something you make nothing! It is a great argument but the numbers make it hard to justify. If you are running at 50% gross margins and you deduct $100 of the price of a product, you have to sell an additional $200 in product to make up for that discount.
Price is always a consideration. However, it is not the #1 reason to buy for most people. Make sure you dont let the Price Buyer set your pricing policies. A price buyer will complain all the time, return every little thing, try not to pay you, tell all your good customers how little they paid and annoy everyone! Every time you have a price buyer in front of you, this is what they are really saying: Youre not going to make any money on me today or ever. Instead of being afraid that your price is to high, you should be terrified that your price is too low!
Most Sew & Vac stores that go out of business arent maintaining margins that allow them to operate a thriving and sellable business. You might say I dont want to sell my business. The scary thing is that if you cant sell your business today, you probably should be working for someone else. The only reason you wont be able to sell your business at some point is that you are not making enough profit to attract buyers. We all want to retire sometime, dont we?
We all sell Premium products and offer premium services. We must sell at Premium prices. You cant be a discounter and offer premium services. Mercedes does not offer a $19.99 oil change. It costs $100! Why do we pay $1.49 for a 20 oz. Mountain Dew at 7-Eleven when we can buy a 2 liter at the grocery store for 79? It is because of a perceived quality or convenience that a customer has for that product or service they are buying. By striving to raise the quality of service and products you will raise the amount of money that customers will be willing to pay for your products and services. However, you need to ask before they will pay you.
If you lower your prices, or worse yet, dont raise your prices when you can, you can only blame yourself. Not your perceived competition or customers. If the guy down the street is lower than dirt and cant fix anything right, why do you feel that you have to lower your prices to that standard. You are a little bit better, arent you? If that is true, you deserve to charge more for your products and service, period!
Back to our opening question. What is your #1 obligation to your customer? I say it is making a strong bottom line profit. If you go out of business, you are not there the next time providing them extraordinary customer service!
For retail consulting or coaching, go to http://LongViewRetail.com
About the Author: Howard J. Anderson has owned and operated retails stores for over 20 years. Being a student of retail he has been able to grow a 500 square foot store to a chain of 7 stores in New Jersey, Pennsylvania and Delaware. What he has learned being a student of retail, he is willing to share with others through his consulting and coaching business.
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