Business Record - Iowa Biz

Sampling works

Kelly Sharp is the owner of Heart of Iowa Market Place

Someone recently asked me why we like to sample so many products at the Heart of Iowa Market Place.

The reason, I replied, is because sampling works.

Sampling works because it provides a unique and fun experience for customers, which is what retail is supposed to be all about. It works because it educates the consumer about your products. It works because it moves products. And, it works because it produces results on the bottom line of your balance sheet.

I hadn't realized how powerful sampling is until we started offering samples of our homemade fudge. Hardly anyone who comes into my store is thinking they want fudge when they walk through the door … until they taste the fudge. Everyone likes it. And when they come back, they're eagerly expecting a fudge sample.

The first time they come, it's a happy surprise. But it quickly becomes part of the Heart of Iowa experience for returning customers. Sometimes, they come in specifically for a fudge sample. And I'm absolutely thrilled when they do.

Sampling works.

We did a little test not too long ago. We'd been sampling a sausage meat. We had a lot more of a second variety in stock and I said, "We should sample that one instead."

Right away, the second brand started selling because people could taste it. Everybody wins in that situation.

Sampling is all around us, and yet it is often an underutilized sales tool by many small retailers. Book stores know that you bring in authors for readings and book signings. Lowe's and Home Depot have courses to show you how to build things. Other retailers can and should learn from those examples.

Often, your vendors will provide you with free samples. (I'll get into that the next time I write.)

But today is a great day to be thinking about what you can do to engage your customers, give them a unique experience and encourage them to come back. Product sampling should be at the top of your ideas list.

Why? Because sampling works.

-Kelly Sharp

Cause marketing for retailers -- Part II

Kelly Sharp is the owner of Heart of Iowa Market Place

In my last blog, I outlined some important do's and don'ts for retailers to follow when doing cause marketing for a charity organization or social issue.

One important aspect to define upfront is that any cause marketing is a partnership. Not only does the cause need to fit with your particular business in some way or another, but the charity has to be ready, willing and able to really get behind your efforts. If you're doing all the work and they're not promoting it, what you're doing isn't going to be nearly as successful as it could or should be. It may not be successful at all. Don't be shy about asking how the cause is going to support your efforts.

Elaborating on a point I made in my last post, it's very important to give yourself plenty of lead time. That's especially true if you're a new retailer.

That last thing you want to do is let your enthusiasm for a cause or pressure from its supporters stampede you into throwing together a haphazard campaign in a matter of days or weeks. At best, you'll end up harried and frazzled. At worst, the effort will be a complete bust that won't do you or the charity any good.

While it will differ from cause to cause, you need to give yourself a lot of time to develop news releases and marketing materials, identify the right products and pricing, and prepare your sales staff for the big event.

Cause marketing, which is often tied to a particular event like Heart Month in February or Breast Cancer Awareness Month in October, also can be an ongoing activity. We're exploring the idea of publishing a cookbook that will be sold year-round with proceeds to go to the appropriate cause or causes.

Finally, whenever we've promoted a cause at the Heart of Iowa Market Place, I've always taken the time to analyze the campaign at its conclusion. And, you should, too. Be sure to ask yourself: Was it a success for the charity? Was it a smart use of our time and marketing resources? What can we do to make a follow-up campaign better? And, finally, should we really do it again in the future?

-Kelly Sharp

Cause marketing for retailers -- Part I

When done right, cause marketing can generate a number of benefits for retail businesses that extend far beyond the company's bottom line.

There's the satisfaction of helping a worthy charity or particular cause with both money and publicity. There's the stronger bond created with existing and new customers. There's the ability to contribute to a good cause without having to dig deep into your own pockets, which is often very difficult for a small business to do. And, there's the opportunity to show people that your business truly cares about the community.

When done poorly, there's the possibility of alienating customers, diffusing your company's marketing focus and even losing money.

That's why it's crucial to put some real thought into any cause you support through your retail business.

At the Heart of Iowa Market Place, we've done some cause marketing, but we have some clear guidelines we follow. Your retail business should, too.

First, we support causes for which we have an affinity. The truth is, we're asked several times a day most days to support this or that charity. Your business probably is, too.

As much as we'd like to, we simply can't support every group that asks us. You have to be particular about the causes you choose. There has to be a logical connection for your business that ties into your marketing and products.

(Be sure, too, that your employees know what to say when charities come into your business to ask for donations because your customers are watching and listening. Our employees always politely take the information and let them know the owner will get back in touch with them.)

Second, any cause marketing must be part of your overall marketing strategy. I map out an annual marketing strategy and any cause marketing is included in that early planning and only with a great deal of thought.

Third, you want to make it fun for your business and employees to promote that cause.

Finally, make a budget for cause marketing and stick to it. In the end, it will not only give you the fortitude to decline the bulk of requests but it will also provide a clear focus for your efforts.

-Kelly Sharp, owner, Heart of Iowa Market Place

Tough questions net big results

There are a couple truths in life that are important to small retailers, especially if they feel like their business is in the doldrums or if they recognize it has slipped into a crisis.

The first truth is: The tougher the questions we ask, the bigger the results we net. 

The second truth is: Not many people like to answer tough questions. And, the third truth is: Even fewer of us can ask the really tough questions of ourselves.

So, what's a business owner to do? The answer is something that's as certain to be necessary as it can be uncomfortable. You need to ask the people closest to you and even some people you don't know all that well to evaluate you and your business and honestly critique both.

At the Heart of Iowa Market Place, we do just that. We do it with our vendors, our financial advisers, marketing consultants, corporate and individual clients who do business with us online, the people who walk into our store in historic Valley Junction and -- this can be especially tough -- with my friends and family.

Part of that constant review should include customers and clients because business in general and retailers in particular don't go back as often as they should and ask their clients several important questions. How'd we do? Were you happy with our product and your experience? What can we do better? While we may not always get the answer we want, your customers and vendors will appreciate and trust you even more because you asked these tough questions.

My thoughts regarding this were recently confirmed when one of our large suppliers asked 15 of their top customers to attend a roundtable discussion on how they could improve their business and help us to sell more. While all of the feedback for them was not positive, I felt great about being asked and felt like they cared about me as a customer. (Now let’s see what they do with this feedback.)

That's important, because the process doesn't do you any good if you choose to ignore the advice you get. You have a responsibility to weigh what you're hearing -- even when it's uncomfortable or downright painful -- and make the right changes to make your retail business stronger. 

Inviting people in to critique you is hard, but if you don't do it you don't get better. Who should you be asking to critique your store? And why are you waiting another minute to have them do it?

-Kelly Sharp, owner, Heart of Iowa Market Place

What's on your shelves?

Sometimes, retailers get so attached to inventory they come to think of it as their baby. They want to hold on to it … and hold on to it … and hold on to it some more.

For some, they'll hold on to it while stubbornly believing they'll make their usual margin. They'll even pack it away for next year's season, holding on to it long after it looks old and unappealing. That's guaranteed formula to kill sales and profit beyond the product that isn't moving because it will hurt your brand.

For others, they'll hold on to it in hopes of just getting back their original investment. Understandable, yes. But, in the end, still not very practical if it's still not moving.

I don't look at inventory as my baby. I look at it like a teenager who's been planted in front of the television. And, if it's been there too long, I'm going to shout, "Don't just sit there! Get moving and get out of here!"

There's a reason mega-retailers have regular inventory clearance sales. It's just smart business.

Inventory that isn't moving is costing you money every day, every hour, every minute that it sits there doing nothing. You've already paid for it once. Don't keep paying for it. That money is gone and it's not coming back. The space that non-performing inventory is taking up is not allowing you to have space that will earn you dollars. Especially for small retail stores, your space is at a premium and every square foot of it needs to be making money. 

Cut the price to whatever level is necessary to get rid of it. Take your loss, change your inventory and get on with your business.

I've even donated non-performing inventory to charity just to clear space for something that will sell and boost my profit margins to where they need to be.

Take a look around your business. What's on your shelves that needs to get moving today?

-Kelly Sharp

More gift-giving opportunities to connect with clients than you may think

Pile of gorgeous gifts (Photo credit: Wikipedia)

In business, it seems we're always encouraged to be aggressive. Getting there first has its advantages, but sometimes it really is best to be last -- or at least arrive at a different time than the pack.

For instance, several of our clients wanted to send holiday gifts to their top customers, and because they contacted us late in the season their gifts, would not have arrived until just before the holiday. 

Yes, the idea of giving gifts is to thank clients and show your heartfelt appreciation. But you're also making an investment in your relationship. And you want that investment to create the best return on investment possible. It just didn't make much sense to send the gift when the clients' tables were full of gifts from other customers and when half the employees traditionally are gone during the week of Christmas and New Years.

That's why our advice was to wait until later in January. It's a time of the year when people are tired of the winter weather, they're in the doldrums and the holiday treats are all gone. Sending a gift in late January to thank your client for their business the previous year certainly gets noticed. And, that's what you want to do -- get noticed.

That's not to say it's time for a whole new trend in business where you forget about sending the holiday gifts.

When it comes to holiday season gifts, the key to being noticed is to be first. Instead of a Christmas Gift, you might consider sending a gift out at Thanksgiving (Thank you for being our Customer) or Valentine’s Day (We “Love” our clients).

Just remember, you don’t have to wait to thank your clients, employees or others for their loyalty or business.  I know a tax firm that thanks its clients at the end of an audit (which is no fun for anyone!) and thanks its employees at the end of every tax preparation season. Your business has its own times of the year when saying thanks to your clients will be noticed and appreciated most, too.

That old saying about timing being everything is absolutely true. When it comes to connecting with clients, you have more times to do it effectively than you might think.

Kelly Sharp is the owner of the Heart of Iowa Market Place in historic Valley Junction.

 

The pros and cons of the catalog

Retailers have long weighed the pros and cons of a print catalog for their products, -- and the easy lure of posting everything on the Internet these days has only made the decision that much harder.

For my business, the decision to go with a print catalog was been an easy one. It's also been a profitable one.

Let's start with the "easy decision" part. Before the Heart of Iowa Market Place produced a print catalog, people could call or go online to order. But the catalog's results were quickly obvious. People would come into the store, catalog in hand, with various items circled. Or, when calling to place an order, they would provide the item number.

The catalog made their lives easier and their shopping experience more productive and enjoyable, especially for businesses and those individuals who do not like to shop online. So in addition to generating more sales, it generated a positive shopping experience for our customers. 

How do I know it was profitable?

We spent approximately $1.15 per catalog plus postage. While the investment upfront was large, it also allowed for us to have improved photos for our website and advertising purposes. And, for an expenditure to be worth the time, money and effort, I always expect it to bring back at least twice as many dollars. By keeping track of sales directly attributed to the catalog, I knew when we reached and passed that mark.

Where did we send all those catalogs?

Existing customers for starters, of course. A print catalog is an easy way to stay connected with the people who are essential to your company's life and profitability.

We also expanded our business-to-business mailing list by using the Business Record's annual Book of Lists and area chamber of commerce contact lists.

While it's important to be creative and expansive with your contacts, it's equally important to realistically look at your potential market. Catalogs are expensive and you can't afford to throw away money with a scattershot approach. In other words, you have to get your catalog out there, but you have it get it into the right hands.

In addition, the catalog was used in electronic format. It was placed on our website so customers could easily download it (saving postage costs for us). Another bonus: When making marketing calls on businesses, I could easily use my iPad to review product options for my clients or easily email the catalog to the potential client. These are all benefits that sometimes get left out of the cost per catalog equation. 

One more thing: The catalog is part of your company's image and brand. A high-quality catalog sends the clear message that you deliver high-quality products and service. It tells your customers they can trust you.

Catalog customers are a very, very important piece of the Heart of Iowa's business -- and we treat them accordingly. So much so, that I always remember the words of a true pioneer in the catalog business, L.L. Bean, who made his mark with the 100 percent money back guarantee. His philosophy was as powerful as it was simple: "A customer is the most important person ever in the office -- in person or by mail."

Truer words for a successful retail business were never spoken.

-Kelly Sharp

You don't know what you're missing

It's an expression you've heard a million times: "You don't know what you're missing."

I think of that expression often when I think about many retailers' reluctance to get serious about business-to-business relationships.

Let's face it: Many retailers only focus on walk-in traffic. That's great, because you want to do everything you can to make sure those customers have a unique shopping experience that keeps them coming back to your business day-in, day-out, year after year.

But it's not enough if you're serious about bringing as much revenue as you can to the bottom line of your balance sheet each year. (And, every small business should be dead serious about its bottom line.)

You really need to be asking yourself, Do I have a product or service that works for business-to-business relations? And, can I grow my business that way?

Get creative. You'll be surprised how far your reach can -- and should -- be. For instance, say your business is custom-made baby clothes. You're probably thinking there's absolutely no business-to-business opportunity whatsoever. Especially not on the local level. But, you'd be wrong.

I was talking to a friend not too long ago who said her law firm is constantly buying baby gifts for associates who are having children. So, why wouldn't you, as a retailer, target a business-to-business opportunity like that? The result would be a steady stream of business and, more than likely, plenty of referrals coming your way.

The truth is, almost every retail business can have a robust business-to-business component.

So, jump in with both feet this year. And do it sooner rather than later.

You won't believe what you've been missing!

-Kelly Sharp

Taking inventory

If you're a retailer, you're probably still catching your breath from the holiday season. And, you should be -- because it won't be long before you're already going to be committed to whatever you strategy is for the next holiday season.

But it's also a critical time to take inventory -- physically and mentally -- for the year ahead.

I'm doing both this month. Between closing the books on 2012 and taking in a quick vacation, I'll also be refining my business plan for 2013 (which you should be developing and analyzing throughout the entire year) by taking a realistic look at what worked and what didn't in the past year.

I start with a simple, direct question: Am I relevant? (In other words, I want to know if my store is providing the goods, services and unique experience my customers want.)

And, I ask myself other questions, too.

Is my business focused on what it does best?

Where am I really making my money? (This is where I should be spending most of my time, energy and money.)

What can I better delegate and outsource to maximize the dollar value of my time?

What did I sell last year? And what didn't sell? (Seems simple, but many times we get so busy with the day-to-day tasks that we don't really take a good look -- we just reorder the same as we did last year.)

What inventory is just taking up space -- and how am I going to move it?

Is my website absolutely up-to-date and user friendly? And, am I making the most of what technology has to offer?

How can we improve the customer's experience?

What lessons can I take from other retailers, even the stores, while still keeping the uniqueness of my own store?

What am I going to do this year to increase my business-to-business sales?

Those are the smart questions to be asking no matter if you're a retailer or in any other profession. So, whether you're already back at work or still unwinding, the remainder of this month is the right time to take inventory of all your assets and obstacles to success in the coming year.

-Kelly Sharp

A great way to start 2013

I can't think of a better way to kick off the new business year than with my first blog about the retail sector, because it's an opportunity to connect with more people. And ultimately, that's what business is all about -- connecting with people who need or want what you have to offer.

In the retail sector, that means offering goods, services, and if we're doing it right, a unique customer experience. That's something I've strived to do throughout my career. Before purchasing Heart of Iowa, I had a variety of experiences both in marketing and operations in many different fields, including construction, architecture, development and even a sports park.

My most recent position was the as the vice president of retail operations at Hubbell Realty Company. That role gave me a wide variety of experiences from understanding franchise systems, to identifying retail solutions for real estate issues and managing the day-to-day operations for businesses that have very different customers and a variety of unique challenges. Some those businesses included Copper Creek Golf Club, Woodland Hills Golf Course, Brilliant Sky Toys and Books at the Kaleidoscope, Johnny's Hall of Fame Restaurant & Bar, and Maximum Fitness Centers.

It was challenging, rewarding work, but owning my own business was something I had always wanted to do and in late 2010, I realized that goal with the purchase of Heart of Iowa.

I liked that the Heart of Iowa had a strong brand, wonderful history, loyal customers and a real market niche. I also bought it with a clear plan to build on its success by increasing its business-to-business sales, growing online sales and putting a sharper focus on marketing.

The fact is, you can't talk about retail without talking about marketing. Of course, there are so many more aspects of retailing that are all too often overlooked or forgotten by business owners -- and reconnecting with them is where so much opportunity awaits.

In the weeks ahead, I look forward to sharing ideas on customer experience, value of sampling, business-to-business sales and relationships, evaluating inventory, the return on catalogs, trading products for services, successful retailer marketing, learning from mistakes, technology and social media in the retail sector, the work/personal life balance, building a brand, leveraging client relationships, customer feedback, the pros and cons of coupons and more. And I look forward to hearing from you, too, with your questions and perspectives.

Kelly Sharp 

Owner - Heart of Iowa Market Place