Six sure bets for boosting revenue
By Gordon Hecht, YSN Contributor
Having spent time working in Las Vegas this past March, I can assure you that there are very few sure bets in the world.
Other than guessing the over/under on the price of two slices of cheese pizza and a bottle of pop in a high-tone casino ($32), or learning that the goal of Blackjack is not reaching 22, our topsy-turvy world has reduced the number of sure things in the wild casino we call Retail.
This author cannot predict supply chains, fuel costs, competitors entering or exiting the market, interest rates or the price of wheat in distant lands. But if you are looking to increase revenue, here are six 99.9% guaranteed winners in the marketplace:
1. Avoid becoming your market’s best kept secret. There’s no two ways about it, you gotta advertise if you want to see foot traffic in your store. Cut or eliminate shouting out your name and you’ll see less “ups.” Maintain or increase your marketing efforts and more guests will stop by.
Advertising is not an expense. It’s an investment in keeping your business relevant and flowing dollars. You need to figure on spending 6-10% of your sales budget on ads if you plan to increase revenue.
There are lots of places to invest. Advertising venue effectiveness varies by marketplace. However, be sure each ad contains the Four P’s: Place, Product, Promotion and Price.
2. All advertising roads lead to your website. Back in the stone age 1990s, Fred and Barney retailers would advertise in the newspaper or local magazines. They’d place a coupon in the ad. “Snip’n Save” was printed on the coupon with an image of scissors and a dotted line. When a shopper brought in the coupon, they could tell Wilma and Betty that the ad worked!
A third of a century has passed since that practice became extinct.
Every penny you invest in advertising — billboards, radio, TV, direct mail, email blasts and good ol’ newspapers — drives shoppers to your website.
In 2024 we don’t go to a movie or restaurant, buy a shirt or airline ticket, or hire a pet sitter or real estate agent without pecking away on our phones or laptops. Your shoppers are no different. Your website must be eye catching. That means video, a hot promotion, chat or a text feature. Get to the merchandise in three clicks or less. And show your prices; otherwise, your website is a library reference book.
You don’t need to know how to create an awesome website. You don’t even need to know how to operate an ATM machine. You just need to hire someone to do it. Increasing your revenue depends on it.
3. Learn how to lift barbells. Cellphones and water skis. Cruise packages and water heaters. Autos and athletic shoes. Most merchandise is presented in good-better-best steps.
Promote to basic products, demo the enhancements that a shopper gets for a few bucks more, then roll out the top-end exclusive luxury line.
Except something has changed. There’s a lot of market activity (that means shoppers are buying) at the lower end. Queen mattresses under $1,000. And demand is high at the higher-end, $2,500 and up. Like so many baby boomers, the retail market got a little soft in the middle.
We call that the “barbell effect.”
There’s never been a better time to top out your display with a few $3,000 and higher models. You may not sell them as often, but it costs the same to warehouse and deliver one $3,000 bed as three $1,000 beds.
A 30-bed lineup should have about 10 good beds, eight better beds, and 12 best in class.
Show the top-end merch in king, because when you show king beds you sell king beds. And that means more revenue.
4. Capitalize on your fans. You should gain about 200 raving fans a year. They are the shoppers who became your customers.
In the marketing world, it costs one-sixth as much to attract a return shopper as it does to recruit a new one.
They know you and (most likely) love you. Reach out and touch your fan base with hot offers. A mattress for upcoming summer guests and back-to-school beds. A pillow trade-in event. Trade in a box spring for an adjustable base. A $100 gift card for anything in your store priced $99 or above.
This is the lowest-cost advertising you can do. Phone, text, email or plain ol’ snail mail. There’s just no reason not to do it.
5. Pass the white glove test with flying colors. People shop your store to get something fresh and new. They make up their mind about your showroom within 15 seconds or 15 feet of entry. A messy store prevents revenue every day.
Dirty sidewalks, faded signage and soiled carpets just don’t make it these days. You don’t have to dress to the nines, but clean, ironed, collared shirts with dress slacks or skirts are a must.
Remove any handwritten, taped-up signs. No one reads them and they are just plain ugly. The sales counter should be clear of debris.
Background music is a must. It’s so simple these days. Pandora, Spotify or XM with a few Bluetooth speakers. If that last sentence sounds like a foreign language, ask the grandkids for help. The music should be relaxing and suit your customer base. And no news stations, please!
6. In closing … ask for the close. It was true 50 years ago and it’s just as true today: The No. 1 reason shoppers don’t place an order is that no one asked them to buy.
You gotta make it a non-negotiable policy that every shopper is asked to place an order today. Even if they seem a million miles from deciding. Even if they aren’t shopping with their better half. Even if they’re from out of state. No matter what.
When you ask everyone to buy today, a few more will, and your revenue will increase.
You can bet on it.
Gordon Hecht is a business growth and development consultant to the retail home furnishings industry and a regular contributor to YSN. You can reach him at Gordon.Hecht@aol.com.
