Business consultant Sam Geist recently sent out a message in which he said, "As tough as it is out there, I’ve learned two things: The sky isn’t going to fall and we can’t sit around and wait for a turnaround, we have to initiate a turnaround."
I posted Sam’s message on a buying group’s website and received the following response:
"My name is Gary Larmore and I own Shore Appliance Connection, a company founded in 1951 which I purchased over 13-years ago. I thought I had seen everything; that was until the recent economic downturn. I totally agree, the sky is not falling. There is still a lot of business out there, and a lot of customers who want to spend their money. If unemployment is at 7.6 percent then 92.4 percent of Americans working, making good money that can be used to purchase appliances.
Our sales staff has complained about everything you have mentioned from slower daily traffic to more aggressive marketing by our competition. Several weeks ago I had heard enough so I set out to go back to school, OLD SCHOOL that is. We held a Private Letter Sale like we used to have one with real savings for the consumer and a real reason to purchase.
"We sent out only 15,000 letters to the four closest zip codes to our store. We decorated the store, papered the windows and blew up 300 balloons, placing a certificate inside each for an additional 10 to 50 percent off. My wife and her mother prepared hors d’oeuvres and drinks. We also invited our representatives. We officially closed the store at 12:00 noon and prepared to reopen at 5:00 p.m. – 10:00 p.m. At 4:30 I peeped outside. The parking lot was empty, and to say the least I was concerned. At 5:00 p.m., when we opened the door, it took 20 minutes to get the first rush of people through the door. It hit! We had people standing in line for up to 30-minutes to pop their balloons and claim their discount.
"When the smoke had cleared, we had done $300,000 in five hours. We were hungry, exhausted and thrilled. Our sales staff has a new outlook on the market now and we have the sales and profit to pull out the first quarter. Our reps were elated and now are asking what they can do for us, not what we can do for them. The entire event cost us $7,530 for food, decorations, mailing and the 32-inch Sharp TV we gave away. Our margins averaged 24 percent after discounts. We did give up another 2.5 percent in credit card and finance processing fees.
"We have also recently opened a 10,000-square-foot clearance center where we sell closeouts, blemished and refurbished appliances. This is not business as usual; it is business as you make it. If you build it, they will come.
"We are excited and designing our next event to attract designers, remodelers and the trade. In addition we are working on some open house events for some of our largest employers in the area.
"Don’t misunderstand me, it is tough and you fight for every inch of ground you earn. But the customers are looking for reason, not excuses."
It’s going to take more than a positive attitude and a big smile to grow your business in this economy. Here are a couple of other ideas.
* In talking to Gary about opening his clearance center, he said it was a big change from the expensive lifestyle products they’d been selling the last few years. I reminded Gary that he wasn’t always selling upscale appliances. He moved his assortment up in response to demand from his customers. Similarly, if customers are stepping themselves down in this new economy, smart dealers will lead that trend as well.
* Promotion works. If there was ever a time to increase your advertising budget, this is it. Budget-minded customers who are in the market today are looking for low prices. You’ll never get the chance to show them better, more featured products if they think you’re too expensive.
* If the pie is getting smaller, you need to grow your share of it. You may need to add categories to give customers additional reasons to come into your store. You may need to reach out to younger customers who may be first time buyers or to areas in your community you haven’t tapped before.
The fat lady isn’t singing. There’s plenty of business out there for those who are hungry and go after it. Be more like Gary and you’ll win this battle.