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Thom Duma: The Power of Celebrity

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Thom Duma: The Power of Celebrity

Tom Duma: Seeing The Red Flags

Matrices provide early warning signals about a brand’s performance.

BY TOM DUMA

Thom Duma: The Power of Celebrity

Published in the February 2014 issue

How can you tell if a brand is performing to your standards?

We started developing matrices in Microsoft Excel to track individual companies’ performance on a monthly basis.

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Now, when a brand is faltering, we put a financial spiff on a company’s product for 30 days and see if sales increase. If they do, then we know we have a training issue. If not, then we have a product issue.

Once we discover where the problem is, we can approach it with a strategy. If it is with sales staff, we explore why there is resistance to selling the product. Just as in selling and overcoming objections, you fix the problem and address the objections.

If it is a product issue, you can begin to address those issues. If it is price, reprice. If it is a style issue, start a dialog with the company. You have the facts, and maybe that company is just not a good fit for your store.

Below is an Excel spreadsheet showing an eight-year case study as we tracked one vendor. We opened with the company in 2004 and immediately started marketing it through our website, billboard and television campaigns. You can see that in 2005 and 2006 the brand performed according to our standards of gross profit per linear foot production with an acceptable turn and GMROI (gross margin return on investment). But in 2007 the brand began to struggle for us.

Once the trend begins to go negative, you need to find out why. Here is a list of questions we ask:

Did the brand miss market demand and was it slow to match current design trends?

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Did the brand lose position in the mind of the consumer by not doing its own promotions and marketing?

Did we bring in a competing brand that took revenue dollars from this struggling brand?

Did our staff stop showing it?

Do we have the wrong mix or price point from this brand?

Once we answer these questions we can talk to the brand owner and start to take the required action, whether that’s changing the product mix, boosting our marketing or parting ways with it.

As you can see with this brand, we were able to reach an agreement that benefitted both sides.

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Paying attention to the numbers and asking questions monthly will stop you from going months with an underperforming brand.

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Celebrate Your Retirement with Wilkerson

For nearly three decades, Suzanne and Tom Arnold ran a successful business at Facets Fine Jewelry in Arlington, Va. But the time came when the Arnolds wanted to do some of the things you put off while you’ve got a business to run. “We decided it was time to retire,” says Suzanne, who claims the couple knew how to open a store, how to run a store but “didn’t know how to close a store.” So, they hired Wilkerson to do it for them. When she called, Suzanne says Wilkerson offered every option for the sale she could have hoped for. Better still, “the sale exceeded our financial goals like crazy,” she says. And customers came, not only to take advantage of the going-out-of-business buys and mark-downs, but to wish a bon voyage to the beloved proprietors of a neighborhood institution. “People were celebrating our retirement, and that was so special,” says says.

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Thom Duma: The Power of Celebrity

mm

Published

on

Thom Duma: The Power of Celebrity

Tom Duma: Seeing The Red Flags

Matrices provide early warning signals about a brand’s performance.

BY TOM DUMA

Thom Duma: The Power of Celebrity

Published in the February 2014 issue

How can you tell if a brand is performing to your standards?

Advertisement

We started developing matrices in Microsoft Excel to track individual companies’ performance on a monthly basis.

Now, when a brand is faltering, we put a financial spiff on a company’s product for 30 days and see if sales increase. If they do, then we know we have a training issue. If not, then we have a product issue.

Once we discover where the problem is, we can approach it with a strategy. If it is with sales staff, we explore why there is resistance to selling the product. Just as in selling and overcoming objections, you fix the problem and address the objections.

If it is a product issue, you can begin to address those issues. If it is price, reprice. If it is a style issue, start a dialog with the company. You have the facts, and maybe that company is just not a good fit for your store.

Below is an Excel spreadsheet showing an eight-year case study as we tracked one vendor. We opened with the company in 2004 and immediately started marketing it through our website, billboard and television campaigns. You can see that in 2005 and 2006 the brand performed according to our standards of gross profit per linear foot production with an acceptable turn and GMROI (gross margin return on investment). But in 2007 the brand began to struggle for us.

Once the trend begins to go negative, you need to find out why. Here is a list of questions we ask:

Advertisement

Did the brand miss market demand and was it slow to match current design trends?

Did the brand lose position in the mind of the consumer by not doing its own promotions and marketing?

Did we bring in a competing brand that took revenue dollars from this struggling brand?

Did our staff stop showing it?

Do we have the wrong mix or price point from this brand?

Once we answer these questions we can talk to the brand owner and start to take the required action, whether that’s changing the product mix, boosting our marketing or parting ways with it.

Advertisement

As you can see with this brand, we were able to reach an agreement that benefitted both sides.

Paying attention to the numbers and asking questions monthly will stop you from going months with an underperforming brand.

Advertisement

SPONSORED VIDEO

Celebrate Your Retirement with Wilkerson

For nearly three decades, Suzanne and Tom Arnold ran a successful business at Facets Fine Jewelry in Arlington, Va. But the time came when the Arnolds wanted to do some of the things you put off while you’ve got a business to run. “We decided it was time to retire,” says Suzanne, who claims the couple knew how to open a store, how to run a store but “didn’t know how to close a store.” So, they hired Wilkerson to do it for them. When she called, Suzanne says Wilkerson offered every option for the sale she could have hoped for. Better still, “the sale exceeded our financial goals like crazy,” she says. And customers came, not only to take advantage of the going-out-of-business buys and mark-downs, but to wish a bon voyage to the beloved proprietors of a neighborhood institution. “People were celebrating our retirement, and that was so special,” says says.

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