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Ask INSTORE: April 2010

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Rebuilding your credit, CRM software, and when it’s okay to delete old email addresses from your bulletin list.

[h3]Rebuilding Credit, Bill by Bill [/h3]

[dropcap cap=Q.][h4][b]Due to a huge, unexpected tax bill, followed by the recession I ended up being severely in debt. At the end of 2008 I had $60,000 in vendor debt over 180 days old. I stayed communicative with my vendors and am now at no more than 90 days with anyone.  However, when I try to buy, every vendor I call refuses to sell to me or puts me on COD. What can I do to rebuild my credit?[/b][/h4][/dropcap]

[dropcap cap=A.] We surveyed half a dozen vendors and they were unanimous: None would be prepared to offer terms with a retailer in your situation. As one said, “90 days is still very overdue.” Part of the problem is that vendors themselves are financially stretched, so while one of the six said they’d be prepared to work on a COD basis with a parallel plan to chip away at the outstanding debt, the others said they’d want cash in advance or a credit card payment first. The vendors, several of whom have been burned by retailers going out of business, insist the ball is in your court. “By offering a solution to the vendor she would be showing she is willing to work with them,” said one. To us, it sounds like you’ve already tried to do this. We can only say, keep at it. We’re sure that some vendors will eventually warm to the good faith you’ve tried to display and to your efforts to pay them back.  [/dropcap]

[componentheading]INACTIVATED CUSTOMERS  [/componentheading]

[h4][b]Should I delete old names from my e-mail bulletin list? My younger assistant says I should but I want to keep them because these are old customers who might come back.[/b][/h4]

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Your e-mail marketing program will be more effective the cleaner and more up-to-date your subscriber list is, but there are a few things you should do before you start deleting names. First, segment your subscriber list into new and active and inactive customers. “Reach out to the old customers on your list with a different message. Contact them with a special offer, information about something that would be of interest to them, or educational information that would benefit them,” advises Steve Robinson, regional development officer (Illinois) for Constant Contact, which provides e-mail marketing services to more than 300,000 small businesses and organizations in the U.S. “Consider offering a link to an online survey that would allow them to tell you what specifically they are interested in.” If there is no response after two or three more attempts using this approach, Robinson suggests you consider those addresses inactive and either remove them from your list or move these people to a new list to which you e-mail only once or twice a year so as not to lose contact with these old customers completely.

[componentheading]RELATIONSHIP MANAGER  [/componentheading]

[h4][b]Should I get a CRM (Customer relationship management) system? It looks like a big investment in time and money.[/b][/h4]

Not true at all. You can get Microsoft Outlook’s Business Contact Manager for less than $200, salesforce.com for $50/month or try out ZohoCRM’s Enterprise Edition for $25 per user per month (they also have a free edition for up to three users). Once you get your system up and operating, you’ll be able to do quotes and forecasts, stay on top of inventory and workflow, send out monthly newsletters, and keep updated easy-to-access files on customers. The only thing you need to do is ensure your staff is trained to record activities and use the system properly.

[componentheading]GUTSY HIRE  [/componentheading]

[h4][b]What do you think of using personality tests when hiring? I prefer to go with my gut.[/b][/h4]

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Personality tests have their place, as does your gut, but we don’t think either should be your primary means to judge a candidate. The tests, which are often Internet-based, can’t capture those all-important inflections, gestures or other nuances of communication. As for intuition, it’s got a poor record as a hiring tool too. Much better is to do your homework. Study the candidate’s CV (history is the best predictor of performance), actually call up references, and pay close attention to how well they sell themselves in the interview. This is a sales job, after all.

[componentheading]PRICE BALKERS  [/componentheading]

[h4][b]I’ve raised my prices as part of my efforts to boost my margins, but sales have dropped off. How do I know this is because of the downturn in the economy or because people are balking at my new higher prices?[/b][/h4]

Recession or no recession, this basically comes down to knowing why your customers are buying from you, says Andrew Gregson, author of the recently released Pricing Strategies for Small Business. If people are deciding to shop with you based purely on prices, you need to build a new customer base — because, as you may be finding, these guys have no loyalty. If you believe price is secondary for your regulars and sales are falling, you need to do a better job of satisfying their needs. This may mean rethinking your inventory and services or your sales approach. Is your sales team matching customers with the right items? Finally, there are good customers you don’t want to “fire” but for whom your price points are now possibly out of reach. For these guys, you need to find some value that can be surgically removed (a warranty, a free service, cash only payment) that lowers the cost for you and the price for them, Gregson says. Or conversely you could add value without adding cost and keep the higher price. “Can you offer easier credit terms, a guarantee or something else?” asks Gregson.

[span class=note]This story is from the April 2010 edition of INSTORE[/span]

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SPONSORED VIDEO

Wilkerson Testimonials

Retirement Made Easy with Wilkerson

The store was a landmark in Topeka, Kansas, but after 80 years in business, it was time for Briman’s Leading Jewelers to close up shop. Third generation jeweler and owner Rob Briman says the decision wasn’t easy, but the sale that followed was — all thanks to Wilkerson. Briman had decided a year prior to the summer 2020 sale that he wanted to retire. With a pandemic in full force, he had plenty of questions and concerns. “We had no real way to know if we were going to be successful or have a failure on our hands,” says Briman. “We didn’t know what to expect.” But with Wilkerson in charge, the experience was “fantastic” and now there’s plenty of time for relaxing and enjoying a more secure retirement. “I would recommend Wilkerson to any retailer considering a going-out-of-business sale,” says Briman. “They’ll help you reach your financial goal. Our experience was a tremendous success.”

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Ask INSTORE

Ask INSTORE: April 2010

Published

on

Rebuilding your credit, CRM software, and when it’s okay to delete old email addresses from your bulletin list.

[h3]Rebuilding Credit, Bill by Bill [/h3]

[dropcap cap=Q.][h4][b]Due to a huge, unexpected tax bill, followed by the recession I ended up being severely in debt. At the end of 2008 I had $60,000 in vendor debt over 180 days old. I stayed communicative with my vendors and am now at no more than 90 days with anyone.  However, when I try to buy, every vendor I call refuses to sell to me or puts me on COD. What can I do to rebuild my credit?[/b][/h4][/dropcap]

[dropcap cap=A.] We surveyed half a dozen vendors and they were unanimous: None would be prepared to offer terms with a retailer in your situation. As one said, “90 days is still very overdue.” Part of the problem is that vendors themselves are financially stretched, so while one of the six said they’d be prepared to work on a COD basis with a parallel plan to chip away at the outstanding debt, the others said they’d want cash in advance or a credit card payment first. The vendors, several of whom have been burned by retailers going out of business, insist the ball is in your court. “By offering a solution to the vendor she would be showing she is willing to work with them,” said one. To us, it sounds like you’ve already tried to do this. We can only say, keep at it. We’re sure that some vendors will eventually warm to the good faith you’ve tried to display and to your efforts to pay them back.  [/dropcap]

[componentheading]INACTIVATED CUSTOMERS  [/componentheading]

Advertisement

[h4][b]Should I delete old names from my e-mail bulletin list? My younger assistant says I should but I want to keep them because these are old customers who might come back.[/b][/h4]

Your e-mail marketing program will be more effective the cleaner and more up-to-date your subscriber list is, but there are a few things you should do before you start deleting names. First, segment your subscriber list into new and active and inactive customers. “Reach out to the old customers on your list with a different message. Contact them with a special offer, information about something that would be of interest to them, or educational information that would benefit them,” advises Steve Robinson, regional development officer (Illinois) for Constant Contact, which provides e-mail marketing services to more than 300,000 small businesses and organizations in the U.S. “Consider offering a link to an online survey that would allow them to tell you what specifically they are interested in.” If there is no response after two or three more attempts using this approach, Robinson suggests you consider those addresses inactive and either remove them from your list or move these people to a new list to which you e-mail only once or twice a year so as not to lose contact with these old customers completely.

[componentheading]RELATIONSHIP MANAGER  [/componentheading]

[h4][b]Should I get a CRM (Customer relationship management) system? It looks like a big investment in time and money.[/b][/h4]

Not true at all. You can get Microsoft Outlook’s Business Contact Manager for less than $200, salesforce.com for $50/month or try out ZohoCRM’s Enterprise Edition for $25 per user per month (they also have a free edition for up to three users). Once you get your system up and operating, you’ll be able to do quotes and forecasts, stay on top of inventory and workflow, send out monthly newsletters, and keep updated easy-to-access files on customers. The only thing you need to do is ensure your staff is trained to record activities and use the system properly.

[componentheading]GUTSY HIRE  [/componentheading]

Advertisement

[h4][b]What do you think of using personality tests when hiring? I prefer to go with my gut.[/b][/h4]

Personality tests have their place, as does your gut, but we don’t think either should be your primary means to judge a candidate. The tests, which are often Internet-based, can’t capture those all-important inflections, gestures or other nuances of communication. As for intuition, it’s got a poor record as a hiring tool too. Much better is to do your homework. Study the candidate’s CV (history is the best predictor of performance), actually call up references, and pay close attention to how well they sell themselves in the interview. This is a sales job, after all.

[componentheading]PRICE BALKERS  [/componentheading]

[h4][b]I’ve raised my prices as part of my efforts to boost my margins, but sales have dropped off. How do I know this is because of the downturn in the economy or because people are balking at my new higher prices?[/b][/h4]

Recession or no recession, this basically comes down to knowing why your customers are buying from you, says Andrew Gregson, author of the recently released Pricing Strategies for Small Business. If people are deciding to shop with you based purely on prices, you need to build a new customer base — because, as you may be finding, these guys have no loyalty. If you believe price is secondary for your regulars and sales are falling, you need to do a better job of satisfying their needs. This may mean rethinking your inventory and services or your sales approach. Is your sales team matching customers with the right items? Finally, there are good customers you don’t want to “fire” but for whom your price points are now possibly out of reach. For these guys, you need to find some value that can be surgically removed (a warranty, a free service, cash only payment) that lowers the cost for you and the price for them, Gregson says. Or conversely you could add value without adding cost and keep the higher price. “Can you offer easier credit terms, a guarantee or something else?” asks Gregson.

[span class=note]This story is from the April 2010 edition of INSTORE[/span]

Advertisement

Continue Reading
Advertisement

SPONSORED VIDEO

Wilkerson Testimonials

Retirement Made Easy with Wilkerson

The store was a landmark in Topeka, Kansas, but after 80 years in business, it was time for Briman’s Leading Jewelers to close up shop. Third generation jeweler and owner Rob Briman says the decision wasn’t easy, but the sale that followed was — all thanks to Wilkerson. Briman had decided a year prior to the summer 2020 sale that he wanted to retire. With a pandemic in full force, he had plenty of questions and concerns. “We had no real way to know if we were going to be successful or have a failure on our hands,” says Briman. “We didn’t know what to expect.” But with Wilkerson in charge, the experience was “fantastic” and now there’s plenty of time for relaxing and enjoying a more secure retirement. “I would recommend Wilkerson to any retailer considering a going-out-of-business sale,” says Briman. “They’ll help you reach your financial goal. Our experience was a tremendous success.”

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