What are you selling? Really! So much is donated, how do you determine what to put out for sale? TQT suggests you stop selling the best of what is donated and, rather, identify what the customer is actually buying. Too often "what is donated" governs "what is sold." Sell what is selling instead. Of course you will have to get good sales information (TQT recommends dollars per square foot by specific item), but once you have it, you have powerful data for improving net profitability.

Ever wonder why so many retail thrift shops can succeed in relatively small communities? Treasure hunters! They're the great folks who make our jobs fun. They carefully glean through another's castoffs . . . in search of treasure. It doesn't matter that there are other stores, each is unique and each has potential gold waiting to be discovered. Capture this powerful customer reality in your shopper experience and you will never be "just another thrift store."

Here's a practical suggestion that can be as much fun as it will be informative. Assume various shopper perspectives then, shop your store. For example, if you are not physically disabled, sit in a wheel chair to shop. Start outside as even your entryway might add to your perspective. Carry a squirming child to see how quality is communicated to the young mother. You get the idea. Every perspective needs to be "WOW'd" differently if you want to communicate a "shopper-first focus." Then again, isn't that what we are all about?

Research suggests that customers prefer service that improves as the shopping experience unfolds. This says that checkout should be a highly choreographed process designed to impress the customer. It's the punctuation point on the entire shopping experience. Be sure you leave an exclamation point . . . not a question mark.

Twenty–six of every twenty–seven customers who have had a bad experience with a business fail to report it. The principal reason? They expect no satisfaction if they do complain. Worst of all, the average person who has been burned tells nine to ten colleagues, and thirteen percent of malcontents will spread the bad news to twenty or more people. Your move!

Wondering how to "bring up the subject" in a corrective conference with one of your staff? Try this phrase. "I have a problem . . . and I need your help." It's a great non–threatening opener. Then, state the problem and impact, and ask your employee how to handle.

Business has discovered that it costs six times more to attract a new customer than to keep an existing one . . . and that 68 percent of all business lost can be attributed to poor customer service! Not sure whether you're delivering good customer service? Hire a secret shopper to check you out. It just might be some of the best money you'll spend.

Here's a bit of information I personally relate to. A recent survey found that 64 percent of shoppers say they will leave a store if the checkout takes too long. Is that you, too? Annoying, isn't it?! Will you go back if the experience at checkout is slow? You might be interested to know that 70 percent of shoppers said "No." Leaves us with a challenge, doesn't it.

According to Willard N. Ander and Neil Z. Stern in their delightful book, "Winning at Retail," the top four reasons given by customers when they're asked to define great customer service are:

1. Having the product they are looking for that solves their needs – and having it in stock.
2. Having a store that is logically laid out so customers can find what they want without wasting their time. This includes proximity of similar products, clear signage, and fast–moving checkout lines.
3. Having information readily available to answer questions and to help the customer decide what to buy. This can include signs, brochures, and/or salespeople.
4. Friendly, knowledgeable people.

Ander and Stern go on to say that customers and retailers have very different notions about customer service. Retailers tend to define great customer service as hand-holding, smiling, and heavy doses of "yes ma'am, yes sir, thank–you–very–much–and–have–a–nice–day." Look again at the four top reasons given by customers when they're asked to define great customer service. Notice that "friendly" personnel is only fourth most important. So . . . how is your customer service?

(Quoted liberally from "Winning At Retail: Developing a Sustained Model for Retail Success." John Wiley & Sons, 2004)

My wife and I recently replaced all of our counter tops with granite. Before you think, "Wow, that must have cost a bundle!" let me say we got a great deal. The price was terrific, the sales personnel were pleasant, and the installer did a fantastic job. BUT . . . there was one small detail that needed finished. Not to worry, I thought, so I paid the bill based on their promise to finish the next day. It has now been three weeks and the job is still not done. I cannot even get the company to return my calls. Lots of promises, no fulfillment. Here's the point I am coming to: 99½ percent of the job got my rave reviews – the countertops look beautiful! It would be easy and natural to send business their way. But it is the ½ percent unfulfilled that is determining my impression of the company, driving these comments, and preventing me from recommending them to anyone. See how many people are ultimately affected when we ignore the little things? No detail is inconsequential.

If you are following this website, you have probably learned already that to achieve success in your business, you must first correctly identify your customer. As in nearly every other context, however, data without action is only data: you must act on the shopper information you have collected for it to be anything other than academic prattle. How well you do so will have everything to do with whether your shopper will return to shop again. What about the music – what appeals to a young mother will probably leave a senior cringing. What about ease of accessing products? What gets marketed in your prime retailing space? By the way, do you know which area of your store is the prime retailing area? Do the percentages of types of goods for sale correspond with your shopper bases? For example, if 35 percent of your customer base is young mothers with children, does the type and volume of goods you offer reflect that percentage? Whether you (or your competitor/s) get the return visits will have everything to do with who best recognizes that the customer is someone to be (a) identified specifically, and (b) cared for accordingly. Curiosity will often drive a shopper to your store . . . but it is you who will keep them coming back.

Running a successful business is all about the choices. Make the right choices and life generally smiles at you. Make the wrong ones, and well, few of us get any kudos. Starting, and running, a business is all about the choices. Is it the right business? Is it the right time to start a business? Do we have the right capacities to run a successful venture? Then, there are other choices: which manager, which sales personnel, how many, brand, and the like. It is very easy to get excited at the prospect of becoming an entrepreneur, and to assume that these and other choice–decisions can be made on the run. They can’t. Think long . . . and hard . . . before taking even the first step. Do your homework. Whereas time waits for no one, and opportunities generally must be grasped quickly, the success of your business requires careful consideration at all stages of the process – beginning with a feasibility study. If you are uncertain how to proceed, we can help you. Give us a call. Oh, by the way, if you're not having hilarious fun while you’re at it, you might want to ask, "Why not?"

Consumers shop less often than they did 10 years ago, and they want to shop even less. So . . . does your store’s layout recognize this? Are all your processes directed toward satisfying a customer’s needs quickly and efficiently? It is easy to convince ourselves that the longer a shopper stays in our stores, the more we will sell. Maybe so – on this visit. Long term, however, we may fail to earn their return business.

Here's a personal example of why that is. The one mega store that usually has everything I could ever need has lost my shopper loyalty. The reason is that they frequently move departments within the store. What originally I learned over time was on the north end of the store, now is on the south end! Or backside. And just when I learn it all over, they move it again. Their goal is to get me to be in the store longer, and therefore (as their logic goes), to spend more. What they fail to take into account, is that I am getting ticked. Really ticked! They have presumed on my time and, therewith, have wasted it. The other large store I shop never changes where their departments are in the store. In fact, if I came to your city and visited the same store, I could go right to the section containing the product I need. Now that's service! These folks know that my time is valuable and as a result, I have become a frequent, repeat customer. What's more, I find I actually enjoy shopping there. Go figure.

The one lesson in all of this? Always, always measure your action from the customer's perspective.

Shoppers shop for utilitarian needs, e.g. work and daily life, and hedonic needs, i.e. those needs which are associated with fun. Successful retail store managers try to meet both. Shoppers motivated by utilitarian needs generally shop in a more deliberate and efficient manner. For these folks, smart retailers will provide merchandise in easy to locate places for quick purchase. Shoppers motivated by hedonic needs want to have fun. For these consumers, here are some of the hedonic needs you might try to satisfy.

• Stimulation. The possibilities are as limitless as your imagination. For starters, look for ways to make your store exciting, visually stimulating, perhaps even, almost carnival–like. Consider the role that background music can play. Think also about how scents can promote your offering. Hedonic shoppers want a break from the everyday world. You can help them get it.
• Self–reward. Customers frequently buy products to reward themselves when they have done something meaningful – or want to chase away the blues. Look for ways to help them do so.
• Adventure. THRIFT SHOPPERS ARE TREASURE HUNTERS! If you really understand this simple statement (and I mean really understand it!), you have discovered the key for unlocking nearly unlimited growth in your business. It's all about the hunt!
• Status and power. Here's a question: "How special do you make your customers feel when they enter your store?" In the everyday world of which we are all a part, it is very easy to get lost, to feel unappreciated, and to be ignored. Thrift shops are generally not known for the rich and famous who shop there . . . but those who work there have the absolute power to make their shoppers feel like kings and queens.
• Social experience. Let's face it: we like to be around people. So do your shoppers. Look for ways to incorporate "community" into the shopping experience. One thrift shop manager carve time out from her day to offer craft classes – using the neat products that shoppers can find at her thrift shop any given day. Her customers love it! Another manager places clusters of chairs about his store so that customers can sit and chat. Be creative.

Remember this. If you're having fun with your store, your shopper will likely be having fun too. And a shopper having fun is also called – a customer!

As with most of you I presume, being right is always preferred to being wrong. Perhaps it feeds the self-delusion that we actually know something. That said, I wouldn't mind being wrong on the grief I believe nonprofits will soon be feeling from our struggling economy. In fact, a recent survey from Giving USA reported that 53 percent of charity leaders expected the faltering economy to reduce giving in 2008. Forty–seven percent (47%) of these same leaders felt that the stock market would lead to a drop in 2008 donations. That's not good!

Here is just some of what that may mean.

• New initiatives to meet existing or emergent community need have to be put on hold.
• Expansion of existing programs to better serve clientele may have to be delayed.
• Current programs may need to be cut.
• Staff morale may suffer.
• More frequent requests for extra financial help to large contributors may actually result in donor fatigue.

Whereas it is easy (and perhaps warranted) to be more than a little concerned by all of this, there are options. Two that I most favor are:

• Review existing programs carefully to discern impact. Lean times present a great opportunity to ask "Am I getting the program impact I desire?" and "Is the program of current value, or simply being carried by the momentum of the past?" Look at each both absolutely, and relatively. "Is Program A of value when considered by itself?" "Is it of value compared to dollars spent and results achieved by Program B?"
• Consider starting a business (social enterprise). I have commented often (and written similarly) that I fully expect nonprofits will gradually lose the broad range of tax exemptions currently enjoyed. It is simple economics – governments cannot continue to overspend receipts forever, and nonprofits represent a tempting coffer of substantial revenues. Nonprofits themselves may also increasingly find it necessary to voluntarily back-away from legitimate exemptions in order to be given a place at the table, so to speak. An example will clarify. One nonprofit found it necessary to offer to disregard a justifiable property tax exemption in order to compete successfully for a piece of real estate being offered for sale by a cash–strapped city government. Unfortunately, this action will likely serve as a precedent next time a similar transaction comes forward.

So start a business! If you need help doing so, Talon Company can assist. Importantly, starting your own business can help you reduce funder dependence, self-determine your financial revenues, build reserves, and a host of other positives. Of course, you have to choose the right business and staff it with the right people, but assuming you do so, you’ll be in a better position to weather economic uncertainty. And in all likelihood, you will have fun in the process!

Over the past several weeks, I have identified several retail thrift stores that have closed their doors due to insufficient profitability. That's sad! Almost paradoxically it seems, there has hardly been a more opportune moment for achieving heretofore unheard of levels of net income in a retail thrift business. Why? The answer lies in the dynamic relationship between discretionary income and a good (or bad) economy. Discretionary income as you may recall, is that portion of total income which is not otherwise obligated to basic needs such as mortgage payments, utilities, gas for our cars, and the like.

When the economy is healthy, there is more available income with which to make discretionary purchases. Although every retailer knows this and is competing for their share of consumer spending, you, too, can compete for the flush of dollars. Offer a great product at a fair price (i.e. treasure for treasure hunters), have a compelling reason for why a shopper should shop you (versus your competitors), make the process fun, and you should have no problem achieving profitability. This, of course, makes certain key assumptions regarding location, staffing, management, and the like. The point is, however, that if the economy is strong, there is money available for persons to spend on your products. You just have to earn the business.

On the other hand, a negative growth economy offers the retail thrift operator a unique opportunity to flourish while other businesses are languishing. Again, discretionary income is at the center of why this is so. When the economy is in a full retreat, consumers not only have fewer dollars, but also find that those they do have lack comparative purchasing power. Therefore, they need to stretch their money – which is what we are seeing currently. In a recent AP article, Anne D’Innocenzio commented that "The lower profits and muted outlooks this week from retailers such as J.C. Penney co., Macy's Inc. and Nordstrom Inc. are heightening concerns among investors that shoppers' focus on necessities and buying at discounters could linger well into next year." She reported further that "Tween Brands Inc. – expects shopper fixation on low prices to remain even when the economy rebounds." 1

Here's what I want you to notice. Shoppers are fixated on low prices. As a result, they are curtailing buying to necessities only and are buying at discounters. It's a no–brainer! Your thrift store is their natural focus, so now is the time to act. For starters, ready my article "If You Teach a Cannibal to Eat with a Fork, Have You Made Progress?" 2. In it, you will find just some of the questions you need to be asking "first thing Monday morning." Then you need to aggressively promote your offering through any realistic means you can identify. If you need help in this area, give us a call. We would love to work with you. Take steps to understand your retail metrics. 3 If you have not been capturing at least 15 key ratios, you are likely leaving profits (or profitability) on the table. Now is not the time to be hesitant. Get informed. Move with purposiveness.

1. Anne D'Innocenzio, "Retailers Fear Continued Thrift," Daily Pantagraph, August 16, 2008
2. http://taloncompany.com/articles/If–You–Teach–A–Cannibal–To–Eat–With–A–Fork.pdf
3. Note: Thrift shop managers are frequently surprised by the degree to which retail metrics have a direct influence on profitability. If you do not already compile this information on at least a monthly basis, I strongly encourage you to do so immediately.

In my article, "If You Teach a Cannibal to Eat with a Fork, Have You Made Progress," * I mention that economic uncertainty and a resulting decrease in discretionary spending capacity are steering customers to our stores. Whether we tap into this potential stream, however, rests with the questions we ask. One of my clients recently sent me an article from the Los Angeles Times which reports that for many consumers, secondhand shops have now become their stores of first choice. Don't let the economy get you down. Remember, it's all about the questions: ask the right ones, then, reap the benefits!

You can read the article at: LA Times Website

*Article: If You Teach A Cannibal To Eat With A Fork

"It's the start of a new month . . . Have I learned anything?" Come to think of it, that’s a great question to ask yourself every month. Here's why. At the conclusion of each 30 day period, you have one more, formal opportunity to drill down into what your store's performance is trying to tell you. If principally, you capture gross revenue numbers, then bounce against prior year comparative months, you get one bit of information, i.e. whether your store pulled more (or fewer) dollars than prior months. Assuming that you acknowledge all of your expenses (this month and in prior comparatives), you may also derive a valid net income bottom–line. That's good. If this is largely as far as you go, however, you are missing some very important efficiency indicators, like "What is it costing you per net dollar raised?" "What is your net income per employee hour?" "Which product is pulling best net dollars, and is the respective square footage of retail floor space allocated, commensurate with how well the product is pulling?"

Asking these, and many other similar questions, is for me the fun of retailing. The answers give you the tools you need to make informed decisions. In retailing as in nearly every other discipline, we get what we measure . . . and by implication, if we don't measure, getting it is left to chance. Talon Company staff are available to help you (1) determine what information is important to assessing – and improving – store performance, (2) identify the metrics which will provide that information, and (3) establish monitoring systems for monthly reporting.

Your programs and ministries are too important to leave dollars on the table. Give us a call. We would love to discuss how we can help.

Recently, a nonprofit leader asked me a very straightforward question: "Why should I hire Talon Company to evaluate my retail operation?" Very pointed, don’t you think! In lieu of answering, I asked these questions of him.

• Does your highest grossing retail item also produce the highest net return? Is this product also your net income leader in dollars generated per square foot?
• Do you track what it costs you to produce $1 of net income? If yes, are you pleased with the direction your costs are going?
• Do you know how to structure a bonus for your manager that can be an incredible win–win for both your agency and your store manager?
• Which of your staff are specifically tasked with selling? Is it written into the job description?

So – how would you have answered these questions? If you are less–than–satisfied with any one or more of your responses, you're probably leaving thousands of dollars on the table every year. Honestly! Enough of a reason?

Here's one to think about – marketing experts tell us that all those "abnormally happy" faces we see in television commercials actually add believability to the product being sold. In other words, we are much more likely to purchase a product that's being demonstrated by someone who is smiling. Now the drill down – it matters whether your store associates are happy . . . and smiling. Happy staff make happy shoppers . . . happy shoppers make happy customers . . . and happy customers bring many happy returns.

Have fun out there!

Sometimes a good quote stands alone and needs no other comments added. Here's one. "Remember their size, remember what you sold them last time. Make them feel important! If you can make people feel important, they are going to come back. Everybody likes to feel important!"*

* Robert C. Prus, Making Sales: Influence as Interpersonal Accomplishment (Newbury Park, CA: Sage Publications, 1989), 225