Author: jeffrey valles

Posted on

To Sell Products To Experience Junkies, Tell Them Stories

It is all about the experience economy.  Millennials would rather buy an experience versus buy a product and they love the journey involved discovering those experiences. An experience that is memorable and that they will relish. 

These are the last of the mall kids.  Everyday they ventured to the mall to experience life with their friends.  Not to shop but to be together and share wild stories of what they will do in the future.  They have matured, they have replaced those daily dream sessions with a passion to make dreams realities.  They desire to encounter the new, the unique and the thrilling. They want experiences they will always remember and can share with their tribe.  Clothes fade from style, cars degrade and cheapen and rented homes can be vacated at a moment’s notice. They are so temporary. Our minds stay true to our viewpoint.  What we wanted to recall about our trip to some exotic destination remains in glorious images. The bad hotel and that one meal that made you sick have been minimized or recast as comedies.  The trip in our mind was WON-DER-FUL.

That is what the next luxury monied generation is: experience junkies.  And that is a good thing. They are not looking for the products that are sold in Home Depot, Macy’s and the local supermarket.  They are searching for stores that offer an always changing palette of small manufacturers and importing vendors that are centered on creating new looks or innovative ways for a product to function.  These stores will remain the destination when Millennial, Y and Z generation are looking for special products to transform spaces in their home into a unique experience from themselves and their guests.  It is about making a statement.  

That is the future of non-price-competitive retail.  New, different and sometimes challenging products. All selected with a story to move it far away from the expected and everyday.  A product with a memorable experience to share.

Image by Diego Delso at Creative Commons

Posted on

Team Building: How You Open Dictates Where You Will Finish

Every morning, do your teams come to work ready to perform their creative best? Do they have a game plan in mind?

This morning each team member is gearing up for the day ahead. Some of the sales team are passionately ready to go, others are busy chatting away while others are deeply engrossed on one of their screens. Every person has their morning ritual, but does it really prepare them for the day ahead? How about adding a quick morning meeting designed to start the day and help each team member focus on what they will accomplish?

Before outlining our rousing morning agenda, let’s look at some brain research.

Really smart people have proven that small daily wins offer our brains similar rewards to winning a six-figure bid. It’s also said that any defeat is twice as powerful as any win. Yes, people can land a good quote in the morning, then have their day trashed by an ultra-picky complaint from a customer. The sooner you can talk out the negative incident and celebrate the win, the better your team members will feel. Plus, this venting will free their mind to create a positive focus for the day ahead. People are so much more creative when they are in a positive frame of mind.

“But it isn’t just the person who shows up to tell their story most often who wins. It’s the person who has the patience and empathy to understand the story they tell must serve the people they want to matter to.”  – Bernadette Jiwa from The Story of Telling

It takes a clear, attentive mind to comprehend and process a customer as they describe their vision for their dream room. A brief, focused meeting every morning will help alleviate lingering negative feelings, celebrate the positive and get the team primed for the day ahead.

“Positive feedback is a signal to the brain to do more of something. When we acknowledge, we highlight the behaviors we want to see more of, and at the same time, we build the other person’s confidence and certainty around what they are doing well.” – David Rock, founder of the Neuroleadership Institute

There are many ways to organize these meetings. One simple way is to first ask each team member individually to share one negative thing that stands out from yesterday (or their last shift). Once all have processed their individual bad juju, ask each member for a positive event from the day. Now you have replaced any negative feelings with positive ones. To kick off the day, ask each person for one task they want to accomplish today. Simple and quick. Now they all are leaning more positive and focused on the opportunity-rich day ahead.

These start-the-day meetings also offer managers quality insight into each member of their team, as well as what is happening in their department. Take the time to note who needs an individual attaboy, who deserves a big high-five for a good effort, or who might need help on a large project.

Everyone will start the day having vented and been applauded. Not a bad way to prepare your team to be at its creative best for the day ahead.

A version of this article was included in DPHA’s newsletter Connections.

Posted on

Being listened To Can Also Be Transformative For All Involved.

We all know if we listen effectively, we will better understand our clients and partner’s thoughts, needs and desires.  This knowledge will help us expand our knowledge and create great solutions.

The other wonderful benefit of listening effectively is how it engages and rewards the person you are listening to.  They are immediately flattered. Think how you feel when someone attentively listens to you. You feel that what you are saying has meaning.  When people know you are listening to their every word, they will feel more comfortable sharing information with you. They will then repay you by listening carefully to your thoughts.  This forms a strong partnership of understanding and trust.  

Listening well is a powerful talent no matter your job and improves with constant practice.

Suggest reading: 4 Exercises That Prove Listening Matters by Allison Press from the IDEO Blog

Posted on

Good Product Design Delivers Twice

A company discovers an opportunity for a new product!  They first investigate thoroughly, define the target market, set a budget, and send the complete spec to the design and engineering teams.  They craft what they feel is the best product to dominate the defined opportunity. This design is then sent back upstairs to marketing, sales and finance.  This product is reviewed to make sure it can be promoted, it will sell and it will be within budget parameters. STOP. This is where badly designed products start their lives.  

Have we not all agreed that groupthink does not produce the best results?  Do we not tirelessly quote Henry Ford about faster horses and Steve Jobs on how the public cannot see its future?  All the people from sales, marketing and finance are so wrapped up in their immediate worlds, they are just as myopic as John Q. Public.  Is this really the correct path to create the go-to product for your target market?

The best way to woo customers to your brand is with innovative, beautiful and highly functional products.  Your new product’s look catches a person’s eye, they investigate and bring it home. They use it and are impressed with the experience.  Next, they do the greatest thing of all…they tell their friends and family. They extoll your product’s unique style and commend its functionality.  They have become your early adopter and will be on the lookout for your brand’s next cutting-edge product release.

Would you rather be competing against a product made in a cheap labor factory and sold at rock bottom price?

Risk is a four letter word that can lead to Wow, good, okay, bad and train wreck.

On the other hand, playing it safe mostly leads to okay and bad.  

Please manage this process with the goal of the best product.  Not the best product possible product created within the constraints of sales, marketing and finance.    Even if you have to price the item a bit more than the projected optimum estimated price point. Play the long term game.  When the early adopters get on board and share their enjoyable experiences,price limitations will fall away. I think it is worth the risk.

What game do you want to play?

Related Reading: from Fast Company, Jonathan Ive & Marc Newson comment on today’s design process

Image by FaceMePLS via Wikimedia Commons

Posted on

Looking To Leverage Your B&M Brand And Go Big Time E-Commerce?

Are you thinking of setting up or expanding your online store?  Why not? You know your business and your customers are already online purchasing and researching everything they can.  By simply leveraging your day-to-day brick and mortar showroom business you can be THE player online. 

Before finalizing your online business plan, below are some questions that are not always included in online e-commerce business plans that are leveraging a successful brick and mortar showroom.

Please take a moment to review your target online customer and their unique needs.  

  1. Why are you adding an online purchase point to your retail showroom?
    1. Make life easier for your current customers.
    2. Reach new customers that shop for your core products only online 
    3. Create a new online brand that focuses on a special niche of your product mix that you think offers an online opportunity.
  2. What special terms will your online customers be looking for that you might not be currently offering in your bricks and mortar showrooms? 
    1. Free freight
    2. Expedited delivery
    3. Free returns on all products
  3. What factor will you markup prices from your cost?
  4. Will you have to increase your inventory to meet your online customer’s perceived needs?
  5. What kind of customer service will they expect?
    1. Email and text only
    2. Personal telephone support
    3. AI chatbot with personal chat support
    4. Any mix of the above
  6. Will you have to add any people?
  7. What do your direct competitors offer?

If you have incorporated all of these in your business plan, bravo.  If you have not, I suggest you take the time to dig into answers from te to your business plan, you will have a more complete idea of the numbers and what you need to reach your income goals.

P.S.:  In the E-commerce world it is easier to start small with one profitable, under served product niche. This path allows you and your team to market your E-store to an needy market and learn the unique challenges of the E-commerce game.  Those that open their E-stores with thousands of SKUs covering many product categories can get quickly overwhelmed and damage the brand they worked so diligently to build. 

Good Luck!

Image by Donald Trung Quoc Don (Chữ Hán: 徵國單), Wikimedia Commons

Posted on

How To Use Your 2020 Data To Better Understand, Support and Delight Your Customers

In the last post we discussed building the ultimate data collection process for multi brand stores to place your business in the best possible position to grow. The more you can learn about your business, your customers and your targeted market, the better prepared you will be for the newly emerging algorithms, artificial intelligence support and insight.

For now, let’s look at the data you do have. Let’s set it up to answer questions that will allow us to better understand what is happening in our business and what we can do better to improve and gain market share.

Start with asking your ERP system to create the following spreadsheet for up to the last five years. It will be a big file, but full of data to help you and your team better understand what is actually happening in business.  

I suggest the following 11 headers for each line item invoiced:

  • Invoice Date
  • Customer 
  • Qty shipped
  • Vendor
  • Vendor Product Number
  • Description
  • Finish (if you can)
  • Margin (if you can’t pull this information directly, you can create a simple formula with information below)
  • Total line cost
  • Total line sale
  • Showroom salesperson

Please note here, only ask for the data if you are confident that the data in each of the cells is correct. If you had any past data integrity problems or consistent mis-entry issues, do not include those topics or time periods in your spreadsheet. As the saying goes; Garbage in, garbage out.

Once you have this data, make sure each cell in a column is formatted uniformly. If they are not, the data will be off when combined for a table or report.

Find your best and brightest spreadsheet expert and ask them to set up a pivot table and pivot chart with this data. If you cannot find such a person, ask your accountant, myself or YouTube. Click here for a simple overview of pivot tables to get you started.

From this data you will be able to ask the following questions:

  • What am I actually selling by: 
    • Vendor
    • Finish
    • Product category
  • Are my customers:
    • Purchasing everything they need from me?
    • At what margin?
    • What product categories that I sell that they are not buying from me? 
  • What are my salespeople selling:
    • By brand
    • By function
    • By finish
    • What are they not selling?
  • What are my margins by:
    • Brand
    • Customer
    • Vendor
    • Salesperson
    • Product category

Notice that I have included questions related to product categories even though that is not one of the spreadsheet headers. We do not have exact information here, but we know that most brands are primarily focused on one product category. It is not a perfect metric, but it will offer you added insight into what your customers are buying/not buying. This filter will help you identify which product categories and vendors are reaching your margin goals, opportunities to sell more product categories to your good accounts, and if your salespeople are remembering to sell all the products you offer.

Once you have these answers, along with answers to questions you deem important to your business, you can focus on the opportunities you see that offer the largest upside and are the easiest to address. 

After you set this up, you can run the data output and create your pivot table reports at the end of each month. You will now have actual, black and white data to allow you and your team see what is actually going on and plot a course to improve sales, margins and team performance. Not to mention getting the right products on display and building a more dynamic inventory.

Aversion of this post appeared in the February 14, 2020 issue of Connections, the Decorative Plumbing & Hardware weekly newsletter.

Posted on

What is Wayfair’s Business Model?

Wayfair Lays Off 550 People 

Are you surprised?  

What actually is Wayfair’s business model?  A model that was, once upon a time, fully vetted and admired by many successful investors.

Let’s take a quick look and try to discover what Wayfair’s model is today.

#1: Is Wayfair a tech company?

No, and I think it is time to draw the line between companies that use tech versus companies that create new tech that differentiates them from the competition.  Wayfair is not a tech company. Their presence is 99% on the internet and their format is what so many online-selling companies use. I refer to it as the Filter, File and Find structure.  The hosting company takes all of their product and files them by categories, sometimes four and five deep. Wayfair’s look like this:

  • Home Page
    • Bedding
      • Comforters & Sets
        • Size
          • 7 more filters
        • Color
          • 15 more filters
        • Pattern
          • 15 more filters
        • Set/Single
          • 3 more filters
        • Material
          • 17 filters
    • Or I can use the search engine to drill down to find what I am looking for.

This has not been considered new tech since pets.com.  

Do you agree that Wayfair is not nor has ever been a tech company?

#2: Is Wayfair a DTC company.

No.  They redistribute mid market popular brands and mix in some of its own brands’, inexpensive alternatives.  But they do not really shout out their brands. They are presented as just another option. So if Wayfair’s brands cannot stand on their own and function as a profit point much like a Target or Kroger private label brand.  They are part of the shopping offering but not a significant reason to shop the site.

Do you agree that Wayfair is not, nor has never been a DTC company?

#3:  Is Wayfair a Discounter.

Yes.  Below is Wayfair’s home page on my computer on 02-14-2020 at 8:10am PDT.

Not only is this page shouting SALE, it is boring.  Is there anything on this page that would motivate 21st century shoppers to do anything here but look for the best deal.  There is nothing here to drive to you see the latest and greatest. How many other home goods websites homepages offer the same “shopping experience”?

Below is an image of a product section at 9:25am PDT.  Sale is the first selection in every column.

Wayfair might have started out with a model that did not rely on price but it has evolved into a company that sells products based on having the perceived lowest price.

Again, the page is boring.

Do you agree that Wayfair is a Discounter?

If we agree that Wayfair is perceived by its customers as a discounter, then they are no different than any other big multi-brand stores, brick & mortar and internet based, that, unless they find a true brand differentiator, will slowly disappear.  

Just because Wayfair can show and ship countless more items than any other home furnishing bricks and mortar store, does not make them the place to buy.  Maybe shop but not the place to buy.

Displaying a huge collection of products and product categories is not a path to digital success.  Sure, it is a pain to drive from showroom to showroom but, online, another, more engaging and mabe cheaper site is a click away.  Presenting a lot of the same products as everyone else will not win loyal customers. People are searching for good curated content that talks to them.  

Even if Wayfair adds an online AI-enabled sales support chat, it will still live on price for two reasons.  

  1. They offer no unique, compelling content.  Couple that with the rising cost of digital advertising and SEO.  Wayfair has no cost-effective way to lure new customers except price.
  2. If we agree that Wayfair is a discounter, the brand image is set.  There is no turning back.

It is obvious that Wayfair is in survival mode as they have to deliver more sales in more markets and show a profit.  The site has no zip, no zing marketing, only banners screaming SALES to drive purchases.  

What are the odds of that model winning the day?  10%?

What do you think?

I would love to read your thoughts.

Posted on

Is Your Data Helping Your Business Grow?

Last posting we discussed ways to help your showroom presence add pop and sizzle to captivate and delight your customers. Now let’s now dig into collecting the best data possible to give vendors and showrooms insight into what is working in your business, what is not working and what steps will improve your business.

I suggest building this model from the multi-brand store’s perspective. The showrooms offer a more micro-client focus, allowing all a deeper dive into the market and a better understanding of its potential. The first step is to build out your Enterprise Resource Planning program (ERP) data collection system to gain a better understanding of the viability of your product mix, current customers, vendors and target customers and markets.

Look at your computer system’s data entry matrix for your customer relationship management (CRM), accounts receivable and payable, purchasing and shipping and receiving departments and note what additional data topics you would like to add. This is the time to dream big as it is easier to remove than add topics. Before you finalize your data capture matrix, think of problems you dream of solving and opportunities you would love to capture. Then ask yourself, what data do I need to win these battles?

Now for the fun part – all of this data must be seamlessly linked to all of your businesses databases. The sales data must interface with the marketing data (CRM), the purchasing, shipping and receiving data and the accounts payable and receivable data. All these data silos must be able to seamlessly talk to each other to offer you the best possible understanding of your customers, vendors, your teams and your target markets.

This is the dream package and if you are not collecting this depth of data that is easily shared across all your company’s platforms today, I suggest you start planning a way to collect this information as soon as you are able. This information will be the foundation of your business decisions and a necessity in next few years as Artificial Intelligence, AI, becomes evolves into the foundational platform of yours and your competitor’s computer programs.

All of this data is available from your vendors, your team and in your mind. If it is an abstract topic, set your company guidelines and add the information per your team’s definition. This is primarily information from and for your business. Get with your team, hash it out, set parameters, define the terms and get to it. It is not important that people outside your business understand this, these classifications are for your own business analysis. It only matters that you and your team know what they stand for and how they are defined.

Once you have this data, it may be filtered, sorted and broken down in countless ways to give you powerful insight into your business. Today, data of this variety and quality can be manipulated by Excel or an off the shelf SQL database and, very soon your AI helper.

It is important that multi-brand showrooms and their vendors work closely together on this. Data updates such as pricing, individual delivery times, order acknowledgements and updates must be easily uploaded into these dynamic databases. Stores must also share their sales data with their key vendors. The showroom can remove the customer names, company names and their private CRM info, but the overall data should be shared. This is not the time for hiding and hoping. It is time to build true relationships focused on customer service and generating quality margins.

The more comprehensive the data you are collecting is, the better you will be able to understand what is working well, what can be improved, and enhance your strategic planning for your company’s future. Remember, no matter how powerful the tech, the applicability and insight of its output is directly dependent on the quality and depth of the data collected and the focused vision of the questions the computer is asked to answer.

Below is a suggester starter list of of the customer and market information that should be collected to create a flexible database to crush your competition.

Take you time to plan out this data collection carefully. This is not about speed, it is about quality. Please take the time to this best.

For the short term, the next post will suggest ways to work with your current ERP data now to offer more insight into your customers and to improving your customers experience.

  • Customer
  • Company
  • Customer Type
  • Job Name (if applicable to your business)
  • Sales Person
  • Invoice Date
  • Invoice #
  • Job Notes and Information (if applicable to your business)
  • Brand Sold
  • Product #
  • Color, Finish…
  • Product Classification
    • Filter for where the product is used or applied… (Blouse vs Pants, Kitchen vs bathroom, Skin cream vs Foot cream…)
  • Product Function (if applicable to your business)
  • Series Name (if applicable to your business)
  • Style
  • Quantity Sold
  • Sell Price each
  • Net Price each
  • Total Price paid for product
  • Total Net Product Cost
  • Customer Influencers
    • Referred by
    • Advertisment
    • Google
    • …
  • Job miscellaneous notes
  • WHATEVER ELSE YOU DEEM IMPORTANT

Aversion of this post appeared in the February 7, 2020 issue of Connections, the Decorative Plumbing & Hardware weekly newsletter.

Posted on

Are You A Speed Or Design First Company?

We are all focused on product speed. Quick, quick, quick design the product, market the product, sell the product and then count the profits!  Why so fast? Is it not better to take the time to do it best? Slowing down is not all bad. Taking the time to design the product best for its target market can create a product that can survive profitably for decades.

No matter what the price point, every product needs to be the best design for its function in the target market.  It is not difficult to understand. Will your target customer buy the second best? Why not be best in market?

I think we can all agree, Apple is a very successful company?  And they take great care in designing their products. They are not working for a price point, they are focused on delivering products that delight the user, and build loyal devotees as a result.  If it delights, sales and profits follow.  

Where do you want to take your brand?  Please do not fall back on the excuse you cannot change.  You can get better.

If you want to play the price game, do so at your own peril.  In the end, only one, or maybe two, companies will win. Is that a good bet?

Aren’t you curious of what will happen if you do take the extra time to do it best?

Posted on

Are Products Bringing You Down?

Some of your company’s product segments and brands are profitable.  

Some of your company’s product segments and brands are a drag.

What is a small business owner to do?

Sit down and grab the beverage of your choice.

Comfortable?  

Now list the under-performing product segments and brands that are not meeting your company’s minimums.  Those minimums can be profit, service, style laggard. Whatever you think makes them a drag on your brand.

Then list if each product category is a target market essential or an accessory product category.  Please make this black and white, not gray; either you have to have it or you don’t.

This simple exercise will allow you to see what is causing you grief.  You decide: live with it, remove it, or improve it. Then get on with your day-to-day.  You have done what you can. Do not allow yourself to stress over it any longer.

%d bloggers like this: