Tuesday, May 22, 2012

Critical Success Factors In Buying and Running a Store #2

Stephen Hoch is a professor in the Wharton School, University of Pennsylvania, Marketing Department. Professor Hoch is internationally known for research on retail merchandising, assortment, pricing, and promotion strategy. He consults extensively with leading consumer goods manufacturers and retailers around the world, assisting them in focusing retail strategies and improving pricing and merchandising tactics via point-of-sale data.

Several years ago, Professor Hoch identified his four critical success factors. He did not rate these factors by importance, as I believe he considers all of them equally important, depending upon the circumstances.  

Take for example #1 on his list, being the obvious—location. We all know location is a very important issue when buying or building a new store, but once you’ve made that decision, once you’re (hopefully) doing business, how important is location then? If you made the wrong choice, you can’t just move to greener pastures, can you? But, you do have the option of making that location work for you.

I am reminded of the story of a young woman who wrote to an advice column hosted by a man. She related as to how her car broke down on her way to work, and she was forced to walk back home, only to interrupt her husband making love to the babysitter. The expert’s advice? Clean out the fuel injectors and flush the carburetor. The moral of this story: ‘You must understand which problem needs to be fixed first. ‘

You see, being in a poor location can create solvable problems that are masked off by the severity of the obvious unsolvable ones. You need to find the things you can change, and quit trying to solve the things that can’t and won’t be solved no matter how hard you try.

Years ago, I first read a remarkable poem written by a 28-year-old pastor named Reinhold Nieburh. Known as the ‘Serenity Prayer’, it was prayed first at the height of World War II in the summer of 1943. It starts, “God grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference”.  

Find out what your customers want, and give them a reason to buy it from you. In my friend, Ted Leithart’s collection of CDs, “The 7 Fastest Ways To Increase Your Business in 7 days”, the announcer talks about tuning in to the conversations that are going on in your customers’ minds. You may not know it, but they are all tuned into a program called “What’s In It For Me?” You need to know what that is. Weed out what your customers don’t want, and get it out of your store.

Is there a school nearby? What is the median income of your area, the age, the ethnicity. Is there a grocery store nearby? Spend a few hours peering into customers’ shopping carts. How about other businesses in your area? Get to know them. There is a wealth of demographic information there. Tell them you’ll send them business if they’ll reciprocate. Subscribe to blogs, forums and social networks. Find out what people in your area are interested in and see if you can’t weave it into your environment.

Smiling is a facial expression formed by flexing the muscles near both ends of your mouth. Smiling will not only make you attractive, it has other benefits as well, such as boosting your immune system and adding more money into your bank account.

Let your imagination run wild. Make your store look newer, brighter, and cleaner than you competition and you just might turn a bad location into a better location, and a better location into a sale’s dynamo. If you know what your solvable problems are, spend your time on those and forget about the things you cannot change.

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