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18 Retail Management Mistakes That Cannot Be Made in a Crisis
14.06.2017 7843

18 Retail Management Mistakes That Cannot Be Made in a Crisis

Crisis is a psychological concept rather than a financial one. The fact that during this difficult period people do not stop shopping is a fact. The question arises: since people never stop buying, then what stops them then? Together with practicing expert Vladimir Thurman, we figure out how to attract a buyer to the store and motivate us to buy what mistakes retailers make when trying to escape from reality.

Vladimir Thurman Vladimir Thurman - Leading expert on the commercialization of innovations in the Russian Federation. Chief offsets from competitors. He is the author of the only step-by-step methodology in Russia and the CIS for developing a unique selling proposition and bringing a business into a non-competitive space. Supervisor of NP "Resource Center for Business Development".

Since the crisis is a psychological concept, people stop making so-called spontaneous purchases. They begin to approach their spending more meaningfully. And here, again, the creation of the concept of a unique selling proposition, the materialization of values ​​that makes a business, comes to the forefront.

Since 99% of shoe companies are not ready for this, of course, we will now see that traffic is falling, sales are falling, staff problems are occurring, because more trained people are leaving, and thus the profit is falling and the business is launching the so-called “downstream” business development cycle ”, which may lead in principle to bankruptcy. Therefore, now our task is to launch in this situation an “upward business development cycle”, which begins with attracting customers to the store. Unfortunately, retailers often make management mistakes that prevent this, and often lead the business to very disastrous results.

Mistake No. 1. Inability to work correctly with the client base

There are several reasons for this. The first reason is lack of time. The second reason is that people who should be responsible for this part of the work do not really do this. The third is that working with a client base is put in some secondary places and is not a priority. All this leads to the fact that natural demand begins to decline. Most of our companies rely on natural demand, that is, people just came, bought and left. The absence of spontaneous purchases results in empty trading floors. The head of the company is not able to influence the situation. Conventionally, in such bad times, the client base is reduced to 30%. It’s probably not worth mentioning that the database should be distributed across segments to different groups of customers: new customers (disposable), existing ones (which can be divided into “regular” and VIP clients) and lost customers. And only after a clear understanding of your customers can you start working with the database.

Mistake number 2. Lack of a clear, consistent customer interaction system

Imagine that for many years you have come to one good coffee house and each time, the staff asks the question: “Do you have our card?” “No,” you answer. After which the staff silently breaks the check and, at best, wishes a good day. I have never seen a greater “squandering” of money in my life.

What was to happen according to the canons of retail? As soon as a client tells you “No, I don’t have a guest card,” he should immediately be given a profile, a small discount, or maybe a cup of cappuccino as a present, or whatever. Believe me, there are countless worthless bonuses that you can keep a client with. You just need to “turn on the brain” in order to figure out how to make sure that the client himself wants to leave information about himself.

That is, one way or another, a system of repeated contacts should be built with him. There are a large number of competitive offers, and therefore it is very important to make sure that a person who is in your database is connected to the system of repeated contacts right away. And here, not even contacts with existing customers come to the first place (we will talk about this later), namely, contacts with those customers who did not buy anything from us, because, most likely, these people, having come to us, were interested in for some information and for some reason unknown to us, the purchase was not completed. Therefore, they must be systematically interacted with so that, maybe only after the eighth or even ninth contact, a real purchase is made.

Error No. 3. Do not take on the risks that the client is experiencing

How many times have you observed that when buying, for example, shoes in a store, they tell you that the guarantee for shoes is two or three months? Although the law on consumer protection guarantees two years. And even after two years I can prove my case. Thus, a vicious circle is obtained. On the one hand, business does not trust customers, on the other hand, customers do not trust business. Because of this lack of trust, everyone suffers - both customers and, of course, first of all business.

Therefore, if now you show or come up with (and we know that a lot of money is not earned in business, but come up with!) That you can offer some kind of additional guarantee, then, of course, the problem will be solved. And we again dwell on the fact that non-use of guarantees, unwillingness to take responsibility and not inform the target market that you are ready to take additional risks (precisely during the crisis), of course, leads to the fact that the company again loses money. And as soon as demand decreases in the market, accordingly, new customers cease to come to the company. The crisis comes to the company.

Error No. 4. Lack of customer acquisition channels

Many Russian companies find themselves defenseless before our internal or maybe even external crisis, since when we ask them the question: “Where do your customers come from?”, We hear: “They recommend us to everyone.” And if you ask the next question - “Name at least one, two, five ways of active recommendation marketing”, the answer is complete silence. That is, despite the fact that the entrepreneur knows that the best way to attract customers is recommendations, he does not use any active tools for the development of this communication channel.

Error No. 5. Neglecting Affiliate Programs

Unfortunately, our entrepreneurs are not able to use or simply do not use partner alliances. They continue to invest in worthless advertising that does not bring them any customers. At the same time, they don’t do it at least once to take the advertising budget that they literally throw into the air and make some special offers out of it, consult with marketing specialists, consultants and, accordingly, make a good affiliate program. The situation is literally mirroring, if you recall past economic crises. That is, now the entire restaurant business, entertainment centers, night clubs are already closing. Nobody actually walks in them. We observed the same thing in 2009. That's right in the midst of the economic crisis, using only affiliate programs, we have increased the client base of one of the entertainment venues in our city three times.

The size of the client base was small, but it should be noted that the category of regular customer in this institution included people who came two or more times a week. That is, these are frequent guests. That's precisely the number of such guests has tripled from 200 to 600 in four months. And this is only an affiliate program. Failure to use affiliate marketing tools in this regard significantly reduces business profits. That is, so a penny, a ruble, five hundred, a thousand - companies lose very serious money.

Mistake number 6. Inadequate sales staff sales skills

The company, which during the crisis begins to reduce the payroll, begins to reduce bonuses, privileges and so on. As a rule, this leads to the fact that the most powerful and trained sales managers who do not want to lose the level of comfort that they had, begin either on their own or, due to certain circumstances, look for some alternatives. That is, the companies remain the least qualified sales staff, who in the vast majority of cases absolutely disgustingly communicates with the customers of this institution. Which immediately affects the size of sales and repeat purchases and appeals.

Unfortunately, in most organizations, the leader has no idea what is actually happening, as they say, on the front line, on that line of fire, where the last interaction between the client and the employee is carried out. And it’s not always the sales staff. It can be security guards, a cleaning lady, accountants ... Here is the "rudeness" of these people is often beyond. And we think: “Of course, these are the customers who stopped buying”, although in fact the main reason is the staff, staff and staff again ...

Mistake number 7. Misunderstanding of the target client

Many entrepreneurs don’t understand which category of customers to attract their advertising impact. That is, in this case we are talking about the fact that most advertising calls do not create a reason for the best customers to come to this store, to this company. We trade everything for everyone, but it's impossible to be everything for everyone. If you know that 80% of your business comes from 20% of your target customers, then it’s most logical to make a special offer to identify the target customer even before it completes or does not complete the purchase.

Mistake number 8. Lack of controls for upsell, crossell and downsell.

Unfortunately, some companies have not implemented these already well-known marketing tools, they still do not know what upsell, crossell and downsell are. Upsell is selling more of the same product. Crossell is an additional sale to the main sale. Downsell - when a person refuses upsell or crosssell, this is an additional sale, the purchase size of which is smaller, but the profit for which is really greater. And even if there is any company that is convinced that they have it, then, as a rule, they have no control over these instruments.

I will give an example. The restaurant manager did not have the opportunity to put video cameras or any bugs in the restaurant, but it was necessary to analyze the work of the staff. Then it was decided to put the included recorder into the pocket of each waiter. In the “dead” in the restaurant business Monday, sales increased thanks to the recorder by 14%. At the same time, the manager admitted that he did not even listen to the notes. I described this story on a Facebook page that has been discussed for a very long time. People asked: “How does this happen?” It happens. Therefore, it is precisely the lack of control tools that is a critical mistake.

Mistake number 9. Not using the phone as a sales tool

They may object to me now: “What about grocery stores? How to use the phone there? ” When your staff has nothing to do, they receive a salary, they receive a salary, plus they receive a percentage of sales, most likely (that is, they work or do not work, they get a salary). If you really see the reduction rate of customers during such hours, then your task is to give the staff handsets, give them some special offer that they can even do at the grocery store. If your imagination is not enough, just take and model what Metro or other large federal networks do. Regulate customer demand actively using telephone marketing. That is, you need to use the phone and telephone sales.

Mistake number 10. The absence of the so-called backend in any business

Backend - this is usually the next offer that is usually offered to the customer after he made the main purchase in your business. I repeat once again: no matter what your business is, it can be a shoe store, selling luxury real estate, whatever. In this case, if you know your client, if you are engaged in business in order to make money, and not in order to sell concrete, then your task is to figure out what he will still buy after he acquires your main product. It is clear that not everyone will buy, but there will be a certain percentage - 10, 20, 30, 40, and if this is a really valuable offer, it will be an order of magnitude more expensive.

Error No. 11. The use of so-called image or commercial advertising

This type of advertising does not use direct response advertising. To explain in such a short material how image advertising or a simple commercial offer (selling proposal, product offer) differs from advertising based on the principles of direct response advertising or direct response advertising (DRA) is difficult. Image advertising offers only a product, and DRA makes some kind of special offer and necessarily sets its expiration date.

She necessarily establishes some special, special way of contacting the business, so that it can be very clearly tracked through which channel we attracted customers and how many sales we received. That is precisely why replacing image advertising or just selling selling product advertising with direct response advertising is also capable of bringing there plus and, of course, additional customers. It will also prevent further waste of money.

Mistake number 12. Ignoring the Internet as a way to attract customers

Now there are no businesses left where it is impossible to use the Internet to attract customers. Private kindergartens, dry cleaners, flower shops, wedding salons, tourist trips, sales of household appliances, cars, apartments and so on. That is, everyone is now trying one way or another to use the Internet to attract customers. But since most companies, unfortunately, are not yet competent in how to correctly attract customers from the Internet, they are forced to maintain a large staff of salespeople or give money to some more expensive types of advertising, rather than using the Internet to attract customers. Now there are services that help literally an hour and a half to make a one-page site yourself, even if a person does not understand anything in site building. In this regard, I really liked the service that I can recommend - this is lptrend.com. Very simple and convenient service.

I can say that if you want to test the service and see how quickly and easily you can make a website with your special offer, then just go to lptrend.com and enter the promotional code. You can get a free monthly premium account. Premium account allows you to create an unlimited number of one-page sites. Enter the promo code "TurboThurman". After you have made a one-page site from its page, just post the link to this offer on social networks.

Mistake No. 13. Failure to use direct mail

Despite the fact that we are in the era of digital communications, many have stopped using direct mail. And if they use it, they use it, of course, badly. At some negotiations, I met with the owner of a fitness center, which is a candidate of economic sciences. He is a fairly wealthy person who has his own marketers and so on. As a result, their fitness center not only ceased to exist, people simply stopped going there. Everyone knows this fitness center, it is located in the city center. And this man proved to me, blushing and turning pale, that his ingenious marketer, who is also a candidate of economic sciences, composed a very correct direct campaign, which did not work. I asked to show me this letter.

The first thing I saw was this letter in a white envelope. No one will open a white envelope. Most likely they will take it and put it on the shelf, or it may immediately be lowered into the bin. I opened this envelope. There was no personal treatment. That is, it was an advertising selling product. There was no personal appeal, there was no valuable information for a person that could help him solve some of his problems. There was no special offer in the letter for a person to use it (for example, a free trial training). And while the owner of the center continued to be confident in his innocence. But nothing happened, and therefore this fitness center went bankrupt.

Error No. 14. Inability to use PR tools to increase brand awareness

When companies start PR, they only PR themselves. And business, no matter how much he promotes himself, is not interesting to any target client. Who is interested in the target customer? He is interested only in himself and no one else. Therefore, if you want your PR to work, it should be about your customers. These should be articles about your customers, events about your customers, comments from stars, but again, interesting exclusively to your customers. And your campaign should always reflect that you are the carrier of information that provides this value to your market.

Error No. 15. Lack of special events

Both for attracting new customers, and for existing customers. Three categories of events that could be used: events to attract new customers, for existing and for VIP clients. Here are three categories of activities that just don't use. And if someone uses them, then such events have no history. Look how small little-known cities are promoting themselves. For example, in Western Europe. There is some beer festival there, and everyone goes to this small city once a year on the same day to attend this celebration. What do you think this holiday is? This is a special event to attract new customers, completely new customers. Therefore, the non-use of such events is a very serious mistake.

Error No. 16. Non-use of hidden reserves and assets

These may be business contacts, suppliers or other customers of suppliers. That is, it may be some kind of intangible resource, which is in business, which could be turned into money in a difficult economic situation. This may be the non-use of your knowledge and your professional experience. If, for example, you are a director of a car service and know how you can take both two and three times the volume of sales, then the moment will come when you can’t double the volume of sales already in your car service. And then you stop growing up, but you can grow horizontally. You can develop a system of seminars, or workshops for other car service managers and help them increase sales, and earn even more money on this than if you were involved in increasing sales in the business.

Error No. 17. To take money from business at the peak of growth

If you correct all previous mistakes in your situation, this will inevitably lead to the fact that you will have much more opportunities than your competitors. Far more customers and more sales. And you will have, accordingly, much more profit. The biggest mistake is when, for example, sales went up, even during a crisis, to withdraw money from business. Therefore, you just can multiply and become a monopolist, or increase at least market share.

Mistake number 18. Non-use of barter

Not using barter to receive, perhaps, some advertising products, services, and so on. If you do not use barter to cover your business needs, then you lose profit. You must use the money. And, as a rule, the cost of money is much higher than the cost of barter, because when paying for barter, you are laying a certain share of profit. So you get products or services at a lower price than if you paid in cash for them. Even if by 10%, thanks to each tool, sales increase, then it will not only double, but increase by 180%.

This article was published in the 127 issue of the print version of the magazine.

Expert Vladimir Thurman counted 18 typical mistakes that retailers make during the economic ...
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