This week I will discuss with you a couple of concepts I have about retail.
This is a topic I have spoken to my staff about frequently, and have given seminars on. It is a simple concept, and a mindset that many customers have. I try to teach my staff to take advantage of this and capitalize on it. It is easy to do if you recognize the pattern.
In about 1990, I had been in business for five years. I had been struggling, and trying to figure it out, to not a lot of success. One day when a customer was leaving he said what a lot of customers have said before, “See you again soon.” This time, it struck me. He was already thinking about the next time he would be back to the store. I began to think about how to capitalize on that mindset. I started making “Bounce-Back” fliers which allowed customers to bring the flier I gave them on this visit back to us next month, and earn a discount, a free dice or paint, or something. I was trying to incentivize the customer to come back next month – and next month I would give them another flier, trying to get them to come back the following month. We also did a customer direct newsletter every month (four pages, two-sided, mailed with a stamp, every month), with coupons and offers, and a list of what we were buying (I have bought and sold used games since 1987, my second year in business). I wanted my customers to think about next time.
“Customer Retention,” they started calling this in marketing books I later read. And, as I read further, customer retention is easier than new customer acquisition. Especially in, say, 1992. Before Magic. Back when I carried board games and card games, when miniatures were my #2 seller, and paintball supplies were #1. New customer acquisition was difficult; I was not carrying comics yet (I avoided the 90s cover wars and subsequent market crash in comics). Essentially, I could make a new customer one of two ways: when a gamer found my shop, or when I took someone who was interested in paintball or coin collecting (I dealt in rare coins most of my life) and turned them into a gamer. Not all that easy, really. Customer retention was critical.
As Magic hit in ‘94 (when I started dealing in it) and then Pokemon (‘98 I think, might've been ‘99) and Mage Knight the following year (if memory serves), customer acquisition was easy. I got about 25 new customers a week for maybe two years. We added Games Workshop and other game lines with the profits we had from Magic and Pokemon – and continued to work on next time.
Today: We still hand out bounce-back fliers, and also connect with our customers with a newsletter – now by email, every week. We have other loyalty programs and are currently working on a new program – something I am not yet sure of. But, certainly – a store must adapt or die.
So, starting back in April we started using color-coded price tags for 60 days at a time. We only reorder items that have sold within 120 days of being added to inventory.
- Tags that are more than 60 days old are 10% off.
- Tags that are more than 120 days old are 20% off (and we do nor reorder that item).
- Over 180 days old are 30% off (and we check to see if they would sell better online).
- Over 240 days are 40% off (and we check to see if they would sell better online).
- Over 360 days are 50% off (and we check to see if they would sell better online).
- And so on. Next 60% off – then 80% off, then 90% off, and possibly 95% off.
All of this discount program stuff is designed to get people looking forward to next time. Before they even leave this time.
But also, I don't want to run a museum or a long tail shop. “Long tail” is a term to describe a store that tries to stock every possible item in the categories they carry. For example, until two years ago, I kept nearly every Magic: The Gathering booster since Revised in stock, all the time. I just priced the boosters according to what I paid for them. So, when I bought Tempest at $720 a box, I charged $26.99 per booster. And $44.99 for a Revised booster. When customers come in they would marvel at our selection: over 50 different booster boxes available by the pack! And, then they would buy the latest four to six sets. The other 45 or so sets would sell less in dollars per week than the newest six sets. :D So, we quit carrying those older sets, and put more money into singles and newer product.
I'd love to hear what other retailers use to get their customers thinking about Next Time. But, also what customers feel motivates them to come in more frequently.
I Have People For That
Recently in a discussion among retailers someone asked me a question I could not answer. I don't remember the question, honestly. Something like “How do you reprice your Magic cards?” or something similar.
My answer was “Heck if I know, I have people for that.”
Another, former, retailer took umbrage with this response, and said it was condescending and rude. Not one other person agreed with him (or at least no one SAID they agreed with him). Does it sound like I feel pricing cards is beneath me? I certainly don't feel like that. But, this is new to me, so I thought I would share how I feel.
First, you have to be engaged in your work. What I primarily do is train staff, do comic buys and coin buys, buy out closed or liquidating stores, buy large collections, supervise my staff on larger projects, watch the books, plan marketing and advertising and research and source new product categories while eliminating failing or struggling products.
I also worry about the way the store looks. A lot. Never a burned out lightbulb, bathrooms always clean and stocked, inventory conditioned and fronted (sitting pretty and organized on the displays), stuff like this. I watch the parking lot, shovel snow if I have to.
For everything else I have people. And, in a business with more than one person involved, the staff are those people and they either do stuff I don't want to do (answer the phone is one), or can no longer do because it takes too much time for me to do it (clean the floor) or that I am no longer able to do (price Magic cards, teach people to play Magic, Yu-Gi-Oh!, Pokemon, Heroclix, etc.
This is top of mind with me this week because I found that a staff member is actually better at buying Magic cards than I am. It’s something I have been fairly awesome at until maybe 3.5 years ago, and in which my ability has steadily declined.
I hired a new staff member about five months ago, Chassidy Kilgore, someone I hired because I wanted an upbeat, pleasant staff member to counter my gruff personality. In addition to this, Chassidy has become an awesome MOD (Manager On Duty), learning all the management tools someone with a Key has to know in order to be a MOD. And, she has become the best “new” Magic buyer I have had in the past four years. I say this because I had Joseph Auditore and Chris Alexander on staff, at the same time, and they both are awesome players and extremely knowledgeable buyers (who now work for competitors – and I wish them both awesome success). But, bar none, Chassidy is the best buyer I have ever hired who did not have the skills before I hired her.
And I taught her nothing other than how to buy general stuff. How to talk to the customer to get and close a buy.
She has learned the methodology from my Buyers Book and moved on to learning Magic, memorizing the hottest cards, and developing the skills. She is also a good Pokemon and Yu-Gi-Oh! buyer.
With 29 years as a retailer it finally sank in that I am not, in fact, the best on my staff at something. That's a wake-up call, but also an epiphany. Why would I want someone to work for me who isn't better than me at something we do? Sure, the floor still has to be swept, and someone has to stay to close (unlike most retailers I know, I am a morning person, I am writing this at 6:30 AM and have been at work an hour). I have to have staff who will do the things I don't want to do, staff to do things I can't get to. And staff who can do it better than me.
And, thankfully, I have people for that.
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The opinions expressed in this column are solely those of the writer, and do not necessarily reflect the views of the editorial staff of ICv2.com.