Monday, September 1, 2008

An Upward Trend In A Downward Market

Someone told me this quip a long time ago and it sticks with me and serves me today. It was this: the definition of insanity is doing the same things and expecting a different result. It serves me today because every time I think about wanting a different result, I remember that I have to do things differently. I relate this to small business by watching so many do the same things and wanting a different (better) result. It's a problem.

The answer is clear. Do things differently. What does that mean? It can mean a lot of things, but to me it means to look at the things you do all the time and see if you can improve or modify them. Here's some things you might look at. Are you running the same ads you have always run in the same papers in the same place with the same themes? If so, are they producing results and what kind? Maybe they haven't produced tangible results in years. Maybe you just think they work. Or maybe you think that if you aren't in there, everyone will forget you. Mass marketing is a challenge in any market and it is always changing.

I'll give you an example. We suggested to a liquor store that they could use our services in helping them learn to better merchandise their store and market their products. The owner said he couldn't afford it, but we found them spending $2500 per month on a display ad that I doubted could be very effective. I asked if the ads were working. They do not know, because they do not track the ad or what is in the ad. They are just in the paper for being in the paper and they think people are looking at the ad and coming in to buy what is in the ad.

So, we suggested they stop the ads, hire us for the same amount and they would not be spending a penny more than now, but get a much improved result. They declined because they had a commitment to the paper, etc. I find out a couple months later that two months ago when we talked about this and we suggested they stop the ads, they did indeed stop the ads, but were looking to pocket the savings rather than use the money in a different way. So, the manager says that sales are off. He thinks it is the lack of the ad. This is when I find out. So, I ask how much is it off? He says about $2500. I say, you haven't lost anything since you saved that amount in not running the ads that you had no idea whether they worked or not. However, you didn't get the help that could have increased your sales by that amount or more, so maybe it is a $5,000 loss or more from that perspective.

It just depends on how you want to look at it. One thing that makes total sense to me is that if you are going to run an ad, make sure you will know if and how much it is working or not working. You need to track the results. That applies to anything you are doing.

Next item. No website? You think that online thing will go away soon? It's not only not going away, it is going to cell phones and who knows what else. You might as well get your feet wet now. Let's get that going and keep it growing. A website isn't something you do and get done, it is something you build and grow constantly. It becomes and integral part of your business and your marketing. In addition, you can begin becoming an online seller yourself.

Five years ago, I probably spent about $500 a year online. Now I spend many thousands online. I now buy all my shipping supplies for my business online (great service, great pricing, very easy) along with hundreds of books, video, audio and other items. It is way easier than driving downtown and doing that parking thing and then seeing a poor selection, etc.

Having an online presence and possibly an online income will enhance your local business. When you go online you have the world to market to. Don't be afraid. Just get in and get learning. We all have to do it. It's not so hard once you let go of the fear of it. I have shipped thousands of items all over the world. I have had two lost shipments. An extremely small problem. Not worth mentioning. You probably spill that much in your store. Mostly it is fear, so let go of it. The reality is that it is not a problem to sell online--it is exciting!

What else can you change? Inventory? Marketing? Merchandising? Advertising? Promotions? We will take a look at some more tomorrow.

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