How to Beat The Web Retailers
As we approach the holiday selling season there is no way to avoid the fact that each year the amount of online sales grows. Black Monday, the first Monday, after Black Friday is the big Internet day of the year. In the past couple of years that day has not made any kind of retail history but in the weeks leading up to Christmas the numbers begin to rack up.
The question for today is, “How to compete with an entity that only seems to be taking more market share?” The simple answer is… competing against yourself and not against your competition.
How to Compete Against Yourself
You currently have competition and your goal probably isn’t to run them out of business. Your goal is to keep your doors open, make a fair and reasonable profit, grow your business and co-exist with your competitors…online and off. This isn’t a battle you must win; it’s a battle you must survive. If you approach it from that perspective you already have an advantage and you can create a plan for success.
What are the advantages of shopping online? It’s a smooth transition for people who already catalog shop or do mail order to move to the Internet. The major advantage is convenience. I can sit in the comfort of my home, compare products and pricing and make my purchase and be done with it. The second one is price. Even with shipping costs I can often purchase many items for the same price or less online, especially during the holiday shopping season.
What are the disadvantages? I have to wait for my product to arrive by mail or UPS. The people I’m buying from could be crooks. My credit card information might not be safe. What if I have a problem? Do I want to handle problems by phone or email instead of face-to-face? I can’t always find the answers to questions I have about the product online. How about customer service if I have a question or complaint? What about guarantees and warranties? Will I have to box it up and ship it back? Who pays return costs? As you can see, the hazards far out weigh the benefits of buying products online over making your purchase from a local dealer.
Compete By Doing Your Homework
Here are some ideas that will help in competing against the World Wide Web.
- Start by analyzing what’s going on in your industry. If the web is eating into your market share you need to find out how much and why. Contact associations that deal with your industry and start looking for information. You’ll find many will have done studies on the subject. Ask them for the demographics of online customers that buy your products? Age? Household Income? Education?
- Match that against information you have about your most profitable local customers. If they are the same then use advertising to educate the customer about the advantages of shopping with you rather than online.
- Next, do some sales forecasting. How many sales do you need each day to make a profit and keep the doors open? The best way to find out is keep accurate records. How many people call your business each day? Want a business education? Answer your own phone for a week. Why did customers call? Each call should be logged even if it’s, “What are your hours?”
- Who answers the phone? That person has more to do with the success of your business than almost anyone else. Have a friendly, smiling, knowledgeable; “sales” oriented person picking up that phone. Work the phone to develop leads sales people can follow up on.
Learn the Vital Statistics of Your Business
How many people physically walk in your business? What is your sales closing ratio? Its not how much you do in sales each day that’s important. If 100 people walk in and 25 buy something you have a closing ratio of 25%. That might be a great sales day for you but why did 75 people walk? You need to know these numbers if you are going to have a successful business. Your staff needs to know their closing ratio. Even more important you need to provide the training and tools needed to improve it.
Increase Profits; Cut Waste
Can you increase the average sale? Can you reduce waste? Product returns? Can your sales people name your most profitable products or services? Ever buy a new car and NOT hear about undercoating? Extended warranty? Not likely. What are the “add on” items in your business? How can you add additional profit to each sale by giving the customer more than they expected?
Some Final Thoughts
Business is like amateur golf. Go out with a foursome and no one really cares who wins because each golfer is trying to beat his/her personal best. They will talk longer about breaking 100, 90, or 80 than who they beat that day. Work on breaking your business personal best each day and no competitor can beat you.
But you can’t beat your personal best unless you keep your personal score. It’s like the four minute mile in track and field. For years people thought it was impossible to break. But once it was done lots of others broke it too. Once you start breaking your personal best a few times you will be energized to keep doing it and that’s when your business takes off. Today you’re on the first tee — hit the ball.