UPDATE: August 31. Now cashiers can no longer just type in the register for the ice purchases - they have to go get a bag from the ice machine, bring it back, wand the price, then bag it. That will solve people stealing ice, won't it!
In retailing, even the most benign rules you give to your employees can go awry.
On my way home today for lunch, I stopped in our local big box store to pick up a bag of ice. I bought a bag of ice and as I was leaving the store, the greeter called me back inside and asked to see my receipt for the bag of ice. The greeter was an older lady in a motorized chair - she had to drive up to me. So I went back in, showed her a receipt and was able to leave. As I did, the man behind me remarked on the absurdity of this situation and laughed.
I am sure this greeter was told to 'check all receipts' for ice. I suppose that occasionally someone walks out with a $2.14 bag of ice that they did not pay for. I doubt they are in business attire on a Monday morning at 11am. And if I had been wanting to steal the ice, I could have easily outdistanced the greeter on the scooter merely by walking away!
When you give your employees a rule and no exceptions you are likely to get results in ways you probably wouldn't want.
I like to buy ice at the big box store as it is cheaper than the local gas station and not too inconvenient. But if I have to worry about checking out with the greeter if I run in for a bag - I will go somewhere else. So a 5 cent bag and a bit of water are sufficient to stalk people as they leave the building?
Nothing cools the enthusiasm of your customers than rules that make them seem like they are a crook. Be sure to balance your need for stock control with their freedom to shop. You might need to allow a bit of ice leave - melt away so to speak - rather than risk losing future sales.
Monday, July 26, 2010
Thursday, July 8, 2010
Retailing: of Chocolate and Frozen Yogurt
My wife and I stopped into a local retail store that sells specialty chocolates. There were many individual chocolates lined up in the display case, much like a doughnut shop. We selected four chocolates in a couple varieties we wanted to buy and after a wait, the employee weighed the chocolates and charged us by weight, not unit. The price was $2.50 per chocolate; our sale totaled $11.49 for four normal sized truffles. We were shocked - it just seemed like that was expensive for chocolate. We probably would not go back, and would be very careful if we did.
A few weeks earlier, we went to a local frozen yogurt shop. You may have seen one of these stores which have 15 soft serve spigots with different flavored yogurt, and then a large selection of toppings. You grab a cardboard bowl and then fill it with yogurt and toppings. The resulting sundae was also weighed and the price set accordingly. The price was a bit higher than we wanted, but we felt like if we returned we would know how much to get.
Two retail stores, both using weight as a method for charging customers.
I would argue the chocolate shop is making a serious error in charging by weight. Since a chocolate is discrete, you wouldn't normally think about it as something whose value is in the weight. Moreover, this particular chocolate is very high quality - but weight is not usually a sign of quality. If your customers are unable to gain a sense of what something will cost going in, they are likely to shy away from the shop. Consider a father with his kids - he certainly does not want to get caught with a large bill for a small amount.
Finally, since there was no signage that the chocolates were going to be weighed, I had no way to know what they would cost. Nor do I have any sense of what a chocolate weighs.
But in the case of the frozen yogurt, I know how big a bowl I eat of ice cream - by going once and creating my sundae, even if it is more expensive than I thought it would be, I can now size future sundaes appropriately. How could I do the same with a single chocolate?
The moral of this is not to go have dessert with me.
Perhaps a more useful moral is that as a retailer, be sure that your pricing model fits with your customer expectations. My example of a doughnut shop above is instructive - we all know that doughnuts are sold per piece. I, as an experienced doughnut eater, also know roughly what a doughnut would cost.
If you are going to break that expectation, you had better make sure right up front that the customer understands what you are doing, and in a way that he can know roughly what it is going to cost him to get out of the store. No matter how good your chocolate.
A few weeks earlier, we went to a local frozen yogurt shop. You may have seen one of these stores which have 15 soft serve spigots with different flavored yogurt, and then a large selection of toppings. You grab a cardboard bowl and then fill it with yogurt and toppings. The resulting sundae was also weighed and the price set accordingly. The price was a bit higher than we wanted, but we felt like if we returned we would know how much to get.
Two retail stores, both using weight as a method for charging customers.
I would argue the chocolate shop is making a serious error in charging by weight. Since a chocolate is discrete, you wouldn't normally think about it as something whose value is in the weight. Moreover, this particular chocolate is very high quality - but weight is not usually a sign of quality. If your customers are unable to gain a sense of what something will cost going in, they are likely to shy away from the shop. Consider a father with his kids - he certainly does not want to get caught with a large bill for a small amount.
Finally, since there was no signage that the chocolates were going to be weighed, I had no way to know what they would cost. Nor do I have any sense of what a chocolate weighs.
But in the case of the frozen yogurt, I know how big a bowl I eat of ice cream - by going once and creating my sundae, even if it is more expensive than I thought it would be, I can now size future sundaes appropriately. How could I do the same with a single chocolate?
The moral of this is not to go have dessert with me.
Perhaps a more useful moral is that as a retailer, be sure that your pricing model fits with your customer expectations. My example of a doughnut shop above is instructive - we all know that doughnuts are sold per piece. I, as an experienced doughnut eater, also know roughly what a doughnut would cost.
If you are going to break that expectation, you had better make sure right up front that the customer understands what you are doing, and in a way that he can know roughly what it is going to cost him to get out of the store. No matter how good your chocolate.
Monday, June 28, 2010
How to hire a programmer
For all of you with a software idea just waiting to be developed...
Derek Sivers has a great post today about how to hire a programmer to make your ideas happen.
Key takeaway pointer - #7: Hire more than one team or person. Having more than one team working independently on your initial project allows you to pick the better implementation - and protects you and your schedule by not allowing one team to hijack or just disappear.
Even within a company, this is probably a great idea for a new product (if you can sneak it past mgmt.)
Derek Sivers has a great post today about how to hire a programmer to make your ideas happen.
Key takeaway pointer - #7: Hire more than one team or person. Having more than one team working independently on your initial project allows you to pick the better implementation - and protects you and your schedule by not allowing one team to hijack or just disappear.
Even within a company, this is probably a great idea for a new product (if you can sneak it past mgmt.)
Thursday, June 24, 2010
Welcome Aboard Tulsa Forge Incubator!
Yesterday we saw the opening of Tulsa's newest business incubator - the Forge.This is a much needed addition to Tulsa and Oklahoma.
It is operated under the auspices of the Tulsa Metro Chamber's Young Professionals group, and its director is an executive on loan from Arvest Bank.
There will be room for up to 8 companies in the incubator.
I was a bit surprised to learn they had about 6500 people in the Young Professionals group, or at least that many in their database. I wouldn't be surprised if the incubator clients are all members of the group.
One of the hardest characteristics of a business incubator to develop is the networking that goes on in the hallways and after hours. By its very nature, it occurs on its own, not due to formal programming. And with the Forge operated by and for young professionals, this common set of interests could give it a step up on other incubators.
So welcome aboard Tulsa's Forge incubator! We look forward to hearing great things from you.
It is operated under the auspices of the Tulsa Metro Chamber's Young Professionals group, and its director is an executive on loan from Arvest Bank.
There will be room for up to 8 companies in the incubator.
I was a bit surprised to learn they had about 6500 people in the Young Professionals group, or at least that many in their database. I wouldn't be surprised if the incubator clients are all members of the group.
One of the hardest characteristics of a business incubator to develop is the networking that goes on in the hallways and after hours. By its very nature, it occurs on its own, not due to formal programming. And with the Forge operated by and for young professionals, this common set of interests could give it a step up on other incubators.
So welcome aboard Tulsa's Forge incubator! We look forward to hearing great things from you.
Monday, June 21, 2010
Try a different metaphor
When discussing issues with clients or employees, we usually use a set of beloved metaphors. I like cars and so I often use car analogies or metaphors in my discussions.
I had a boss once who pulled me aside and said he didn't like cars! (So my metaphors were failing to describe the situation and caused him to not listen as well to my comments.)
If you catch yourself using the same metaphor - consider trying something different. People may be more responsive to your comments, and in thinking of another metaphor, it may cause you to rethink the underlying issue.
If all your metaphors are about war or battle - then every situation is combative. If all your metaphors are about cars, then what of friendliness or empathy or warmth. Those qualities are not easily represented by the metaphor.
Try a different metaphor.
I had a boss once who pulled me aside and said he didn't like cars! (So my metaphors were failing to describe the situation and caused him to not listen as well to my comments.)
If you catch yourself using the same metaphor - consider trying something different. People may be more responsive to your comments, and in thinking of another metaphor, it may cause you to rethink the underlying issue.
If all your metaphors are about war or battle - then every situation is combative. If all your metaphors are about cars, then what of friendliness or empathy or warmth. Those qualities are not easily represented by the metaphor.
Try a different metaphor.
Thursday, June 3, 2010
Notes from NBIA (National Business Incubator Association) meeting
We just returned from our annual meeting of the NBIA. For those of you who are involved with incubators - here are some notes I took during the sessions. Sorry I don't usually have references!
- The most useful skill for Incubator Managers is the ability to manage stakeholders.
- 7 People every Entrepreneur should know: banker, accountant, attorney, coach, technologist, insurance agent and marketer.
- Give your advisory board a goal of bringing/sending X number of prospects per quarter to the incubator.
- Homesite.com can do background checks for $25. (Have to check on that one!)
- Be sure to invite local politicians and legislature representatives to your incubator events - even if they don't come, they will note your activities.
- Understand the differences between the SBA 504 program and 7a loans
Microsoft in Asia
In the latest issue of BusinessWeek, Steve Ballmer of Microsoft remarks that excluding Japan, only 3% of Microsoft's $60 billion dollars revenue comes from Asia. In the face of massive piracy/lack of IP protection - and yet one of the fastest growing regions for computers and software - Microsoft is in a difficult situation.
More important to this readership, if as a small business your greatest growth opportunity is a difficult and 'dangerous' market...what to do?
One strategy is to carve out a beachhead - a small part of the market - and develop from it.
Microsoft is trying to concentrate on business users in China, since they are probably more cognizant of IP rights than of the general public.
Likewise, find a small subset of your market that limits your exposure; for example a particular industry, and expand from it. It makes it easier for you to market and also develop.
Get a beachhead!
More important to this readership, if as a small business your greatest growth opportunity is a difficult and 'dangerous' market...what to do?
One strategy is to carve out a beachhead - a small part of the market - and develop from it.
Microsoft is trying to concentrate on business users in China, since they are probably more cognizant of IP rights than of the general public.
Likewise, find a small subset of your market that limits your exposure; for example a particular industry, and expand from it. It makes it easier for you to market and also develop.
Get a beachhead!
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