January.

For retailers, it’s cold not just outside, but indoors when it comes to moving the stock off the shelves. After the Christmas-buying sprees, most shoppers are back at home cooling their heels while retailers try to entice them back out to buy. The one stand-by many local store owners turn to is holding big sales, and they’re finding that in a tough economy it’s necessary to offer deeper and deeper discounts to get folks back and willing to buy. It’s great to have warm bodies in your store again, but it’s not great if your sale ends up making you no profit due to all that deep discounting.

So what’s the method of success that allows you to get the customers back and still make a profit? Is there a way to get both?

There are several methods you can employ to attract business and still maintain a profit margin. See which one of these (or more than one) will work best in your restaurant, retail store, or service-based business and give it a go.

Know Your Bottom Line, and Sell Just Above

This is the method to use with that inventory that needs to move out the door, not with that great new batch of products that just came in for Spring. Calculate your bottom dollar on these items: how low can you go and still make something, even if it’s a small something? Then make your strategy to sell many of these items, each bringing in that small amount of profit, and you’ll end up with a good amount of profit when all is said and done. Plus you’ll have cleared your store of excess, aging inventory.

Create a Loss-Leader

Grocery stores use the loss-leader method just about every week; their circulars advertise a deal that’s “too good to pass up” for their shoppers. In many cases, the grocery stores are taking a loss on this item, but they know that just getting the customers in the store is worth that small loss. How many times have you gone to the grocery store and bought just one item? Most of us don’t shop for groceries that way, and why not? Because in the process of locating and purchasing the loss-leader item, we’re unable to ignore the displays of other great merchandise – some also discounted, some not – that we have to walk past and around to find our goal. Use the same strategy in your store; advertise a huge discount on a popular item, set up a great display for it, and put it smack in the middle of many other great displays with enticing offers of their own.

Offer Package Deals

Another angle on the loss-leader strategy is to offer package deals and discounts; this method allows you to package your items of choice together, being sure that one of them is a cheaper item for you to purchase, which gives you greater wiggle room for a discount. You can offer a greater discount on a combined package, knowing that your combined investment in all the package items is still well below the discounted package price. You might even use a “buy one of these, get one of these other things” free method to sell a costlier item without a discount while taking the “loss” on your cheaper, freebie item. It’s the same method beauty product companies’ use when they offer a “special gift” with a purchase.

Add Value that Doesn’t Cost You Cash

What can you offer your customers that doesn’t come with any cash cost to you? Look beyond the basic inventory, and think about subscriptions, memberships, special discount or dining clubs, consultations, or other perks that offer a huge incentive for customers thinking about a purchase. The value is still there for the customer, who would otherwise have to pay to get the subscription or membership or consultation; but the value-added item isn’t costing you cash that you can’t afford to lose. Use these value-added items to upsell; offer them as freebies or part of a package, which allows you to give your customers an increased value for the same cost without decreasing your profit margin.

What method sounds best for your business?

Image by Alan Cleaver2000.

It’s funny. It seems like the posts you (my readers) like the best are the ones where I give a more personal insight into the work I’m doing, or the thoughts I’m thinking as it relates to business. Not to take all the warm and fuzzies out of it, but I’ve got stats to prove this. The web analytics, Facebook insights and Twitter re-tweets – they all tell the story. My readers…my customers…they like knowing the real me and hearing that inside my brain, emotional, thoughtful type stuff.

Which got me thinking… maybe your customers would like the same thing.

Customers Are Humans, Too.

In general, humans are emotional beings, created to live in community with other humans and to interact with on a personal level. There’s way more to every business transaction than some logical need – there is an emotional connection that takes place – yes, even in the most shrewd business situations. So, how can you use this fact to connect on a deeper level (which creates immense customer loyalty, by the way) with your customers today?

Here are a few ideas I had… But I’d also love to hear your ideas, so fire away in the comments sections to help all of us do a better job at using our “humanness” as a marketing tactic to grow our businesses.

1. Use a picture of a human (you, the business owner, the manager, a key employee, an employee of the month, even a customer testimonial with photo) on your outgoing messages (that includes email, web site pages, traditional advertisements, posts on Facebook and your Twitter profile pic for your business).

2. Have all owners and employees name tags in your business, so that customers can connect with a name, not just a face.

3. Have all owners and employees introduce themselves personally and shake hands or hug customers when they enter (depending on the level of familiarity, of course). Physical contact in this professional way will deepen relationships and leave a more lasting positive impression.

4. Have your owner and employees become a source of valuable ideas instead of marketing gimmicks. For example, instead of greeting a customer with a sales gimmick when they walk in the store, have them demonstrate what to do with a certain item, how to use it, etc.

5. Place signs around the store with photos of employees or owners that provide personalized advice through signage. For example:

Mary’s Top 10 Graduation Gift Ideas Under $50

Mary’s Favorite Pair of Jeans for Summer – White Bootcut Delta Blues

Mary Recommends… Mixing your grandmother’s antique china with this Gail Pittman ivory pottery plate for a bright spring luncheon

6. Use your blog, email, Facebook and Twitter as a place to circulate more of these types of ideas, to reach out to others who are asking questions or making comments that you can engage in conversation about (i.e. be human and join conversations in a normal human way, but on behalf of your business).

7. Use your blog to explain more about the ideas you’ve shared on the signs in-store. For example, you can create a blog post “written by” the person who made the tip on the store sign, include their photo on the blog post as well, include some additional sample pictures of products (include price and official name of product in the caption), and explain in more detail what you presented on the store sign. For instance, if you were saying more about Mary’s favorite pair of summer jeans, you might show some outfit ideas, tell why they are her favorite from her perspective (does she have a certain body type that they fit well, are they lighter weight for hot Southern summers, is there an event that she looks forward to that she plans to wear the jeans to?), and even share a bit of the story behind the brand (a brand created in the South to fit Southern women, etc.). This extends the customer’s in-store experience, and it gives you a lot of content to post on social media, which will in turn also create new sales. And it’s all done from a human, personal perspective, which will lead to tighter emotional connections, higher per-ticket sales averages, and a more loyal customer base.

Trust me… we all really do like it when people are more human in how they do business. The numbers prove it.

Image by: brewbooks

As we explained in a previous article , the key to locally owned businesses surviving and thriving in a competitive, online marketplace and tight economy is to find and dominate a niche of their own.

Small businesses can’t compete with the advertising dollars and inventory numbers of huge national chains; they can establish themselves by finding a specialty and being the best in it.

You Can’t Please All the People

The toughest part of becoming a successful niche business is realizing that you simply won’t be able to make everybody happy. If you choose to specialize your small business in science fiction, for example, then you won’t gain a following of classic literature lovers. But you will gain science fiction fans. If you choose to specialize your locally owned restaurant in a specific type of cuisine, perhaps Italian, then you’ll lose the people who don’t like pasta. But you’ll have fervent and loyal customers in the pasta lovers.

The Trade Off

For a business to succeed in a specialty or niche, it has to make a trade-off. You trade the complacent, so-so, average customers for the fervent, dedicated, enthusiastic ones. Sounds like a good trade, right? It is, because a few enthusiastic customers will give you more in lifetime value and passionate referrals to their peers than many average customers.

Finding Your Enthusiastic Fans

The first step to identifying those customers you want to find and keep for the life of your business is to clearly define your specialty. What are you offering that’s different, better, or more unique than your competitors? Once you’ve identified your own niche – your special offering – you’re in the right position to find the people who will be interested in what you have to offer.

The second step is just a bit of simple brainstorming: who is going to be the most interested and the most enthusiastic about your specialty, your niche? Don’t focus on the people who might be interested. Focus on the people who will love what you offer. If you’re selling science fiction books, you need to be at the sci-fi gatherings, clubs, and conferences, and partnering up with the local theater when the next sci-fi movie opens. Market yourself to the most passionate people in the particular niche; they, in turn, will market you to the people they know. When you find and convert enthusiastic customers, they do the advertising for you.

Places to Look for your Niche Customers

• Specialized online communities and groups
• Local clubs and meetings
• Conferences
• Meet-up groups
• Fan clubs
• Organizations and associations
• Trade shows

Note: If your “niche” is too big to define and go find in groups like these… then your “niche” isn’t a niche at all – and you need to work harder to find your small business’ niche – a truly narrow scope or specialty that will create a winning formula for your business in a difficult economic time.

Where would your ideal customers hang out? Where do they gather? That’s where you need to be.

Image by Rachel Voorhees.

Note: I got an e-mail a while back that challenged me on my inclusion of an Amazon link in one of my e-mail campaigns. This and the following post (and probably a few more beyond that into the future) will be my long-considered answer to the seeming “crisis” presenting itself to local brick-and-mortars… the invasion of big boxes and big-box style on-line competition. Here’s my first stab at how small businesses can beat Goliath.

Small businesses face a double challenge in the new economy; not only are we in the midst of recession like times, with everybody tightening belts and spending less, we’re also transitioning from store-front shopping on Main Street to isolated shopping via the Internet. Location is not the factor it used to be in shopping choices; anyone with Internet access (which seems to be practically everyone) can shop at any store online. The options have opened up, and for the most part, consumers seem to love the choices.

Locally owned small businesses can thrive in the new economy – and love it – but it requires a different approach. When your competition expands from being the other small retail shop two streets over to being the biggest national box stores plus the on-line retailers… it’s time to think of a new angle.

Independent bookstores are a good example, because the ones that have survived and thrive despite competition from Amazon.com have learned to work the new economic angle successfully.

The angle is this: you must create your own niche position and dominate it in order to compete with huge brands and online options.

It’s not enough to be an average bookstore, or an average retail shop, or an average restaurant. When customers have limitless options, average is not going to bring them back.

But you can bring them back.

Niche Examples from Independent Bookstores

An article in the New York Times highlighted how the niche angle has helped independent bookstores to survive. “Being a specialty store gave us something that would distinguish us,” said Alan Beatts, owner of Borderlands, which focuses on science fiction. “We are serving a special demographic, and we receive customer loyalty in return” For a locally owned bookstore, a niche could include

• Selling signed first edition books (and holding regular author events)
• Selling, trading, and assisting customers in rare books
• Covering niche topics (stocking and special-ordering specialized books, magazines, newspapers, and trade journals)
• Establishing expert status in book-related topics or specialized topics
• Engaging an active online community and having stellar e-commerce options

So, if you’re a bookstore, a retail store, a service-oriented business, or a restaurant, how can you find your niche, establish yourself in it, and thrive in this new economy?

“It’s entirely possible that you will choose a niche that’s too small. It’s much more likely you’ll shoot for something too big and become overwhelmed. When in doubt, overwhelm a small niche.” -Seth Godin, business & marketing expert.

Want more ideas from the local book store angle? Here’s a post from USA Today on a similar subject showcasing ways that small local brick and mortar bookstores are competing with the Kindle, Nook and similar book technology…

Image by ReneS.

One easy way locally owned business can get themselves on the map (literally) is by soliciting customer reviews for your business on geographically based review sites. Review sites are usually very large conglomerates with individual mini-sites for each geographic location. Often they’re divided by state or region, and then subdivided by city or township within that region. The bottom line in this uber-web-based world in which we live is simply this: If your business can’t be found through a quick web search – you’re business is going to die.

Use Geo-Based Review Sites to Grow Your Business

What’s great about these websites is that they allow brand-new customers to find you – and want to try your business out – when they may have known nothing about you before. These new customers are online searching for your type of business in your area; if you’ve set up your profile and garnered some reviews on any of these sites, they’re likely to run across your business. Suddenly they not only know you exist, what you do, and where you’re located, they also get to find out what your customers think about you by reading the reviews.

So how do you get into this action? It’s pretty simple.

Step 1: Focus on the major review sites.

The most important local review site is the home of the “red pin” – Google Places, formerly known as Google Local. Other review sites include the following:

• Yelp.com
• Local.Yahoo.com
• CitySearch.com
• InsiderPages.com
• CitysBest.com

There are more, but if you get set up on at least a few of these major websites, your information will get picked up by the other sites as well.

Step 2: “Claim” your business and/or set up your profile.

Once you’re at the website, search for your business. You may find it already listed; if so, you’ll see an option to claim the business or add updated information. Fill in all the information you can: physical address, phone number, email address, Internet information (email, website, blog, Facebook, Twitter), store hours, specialties, owner’s name, history. Some sites will give you more room than others. Some will also allow you to post pictures; I highly recommend that you post a few photos of the outside of the store, inside of the store and a sampling of available products.

If you don’t find your business, you’ll simply have to start the profile or information from scratch. Follow the same principle as above by including as much information as possible on each site. Remember, the more information you have, the more you will show up in search results and the easier it will be for people to find you.

Step 3: Ask for reviews.

The most important part of a business profile on one of these review sites is, of course, the customer reviews. So start asking for reviews. When your best customers come in to your business, make it a point to personally ask them to go online and submit a brief review to ONE of the review sites. Don’t ask them to submit reviews to more than one; that’s simply too much and too complicated, and most customers (even the ones who love you) won’t respond. All you have to do is say something like, “We’ve just set up our profile at CitySearch.com, and we’re trying to get some reviews up. If you have a moment when you get home, would you mind sharing about your experiences here? You’re one of our best customers, and we’d really appreciate new customers getting a chance to hear from you.”

Then hand each customer a card with the information printed on it, so they won’t forget when they get back home.

That’s it! The whole process is simple and can really make a huge difference in helping new customers find you, so get it started now and see what results you’re getting in a few months.

Image: dbking.

Collecting customer information is one of the best forms of marketing you have. It gives you the ability to get in touch with people who have already been to your brick-and-mortar store, who have experienced your services or products, who have, essentially, already begun building a relationship with you. And best of all? It’s free. You may pay out a little bit if you send postcards or a paper newsletter or flyer, but the cost is minimal compared to paying for a radio or newspaper ad. And if you start moving your customer interactions online, you can use this customer information to stay in contact with your customers and prospect list via email without any postage or printing cost. (More on e-mail marketing ideas.)

So what stops local business owners from regularly collecting customer information?

• They don’t think about it.
• They don’t want to be pushy.
• They don’t know how.

Start Thinking About It
If I offered you a way to get targeted marketing messages to your best customers for free, wouldn’t you be interested? That’s what collecting customer information is all about it. “Not thinking about it” is just a poor excuse, so here’s your free reminder to start thinking about and take advantage of a great marketing strategy. You don’t have to be pushy to ask if people want to be on your Preferred Customer List. You just ask, politely, and give them a quick and easy way to sign up. If you get a “No” in response, you don’t have to push it.

How to Collect the Information

• Step 1: Make it quick and easy.

Have a simple form handy, make lots and lots of copies, and leave it out in your retail space. Don’t make the form long; in fact, the shorter the better. Ask for the customer’s name, email address, and (perhaps) phone number or mailing address. The name and email address are the essentials, and you can just stick with those and get great results.

• Step 2: Make it beneficial for the customer.

Give your list a name – the Preferred Customer List or something along those lines – and give customers a clear, concise reason why they should join it. “For exclusive offers.” “For special discounts.” “For members-only events.”

• Step 3: Train your employees.

Create a short script and train every single employee to go through that script. It can be very short, and very simple: “Sir or Ma’am, would you like to sign up for our Preferred Customer List? We just need your email address, and you’ll get access to exclusive offers just for our Preferred Customers.” Teach your employees to have the form and a pen ready, and hold it out to the customer while they are asking the question. This small physical gesture makes it almost instinctive for the customer to reach forward. And no, employees shouldn’t be pushy either. If a customer declines, all that is needed is a polite response: “Well, maybe next time! Thanks for shopping with us!”

• Step 4: Be an Example.

Let your employees see you going through that script whenever you ring out a customer, answer a question, or call a customer about a special order. The script can easily be followed over the phone; you or your employee will just need to take the information verbally and write it down.

• Step 5: Be True to Your Word

If you’ve offered exclusive deals or special events, follow through. A weekly email is best, but at the least follow up with a monthly email offering a special deal, coupon, or event. Make sure the folks on your mailing list understand that it’s exclusive; that’s the value for them.

• Step 6: Get Feedback

Over time, your list will grow and you’ll have customers you get to know well. Use your list to get feedback on everything from your products to your store appearance to the kind of deals or events they would really like to see. Your customer list can quickly become a very valuable, informal method of market research; and the market is your ideal customer, so you know the information is good. (Here is a cool idea on WHAT to send to your e-mail list once you create it.)

The holidays are the perfect time to start collecting customer information, so get to it. Create that form and start asking. You’ll have a great way to follow up with all those new customers you get shopping for holiday specials.

Image by bulliver.