Test of Update Sunday Dec. 7
You Can Compete: Double Sales without Discounting By Bob Phibbs
By Bob Johnson
Founder Kaffe Magnum Opus
Kaffe Magnum Opus Blog Bob’s CEO Blog
You Can Compete – Double Sales without Discounting, Bob Phibbs, 2003. 5 Keys to Success 1. Constantly Upgrade Your Operation/Store 2. Train Your Staff Better. Learn how to train. Train Better Material, It is good to be a salesperson 3. Build Alliances with other businesses to pool resources 4. Actively recruit Stellar management 5. Look Outward – Plot a course around the icebergs/roadblocks a. Read This Summary and then the book
I’ve just read and will summarize soon Chapters 6 on hiring and Chapter 7 on training. The two chapters, if all of us in the coffee business, retailers and roasters, would result in an enormous increase in sales and expansion of market share. I urge you to read them first, and then restart reading at the beginning.
Excerpts, Notes and Ideas From forward: “No one else is responsible for you making a profit”. The owner, the person in the mirror is responsible. You can’t win by continuing to cut prices as there will be no profit left to finance your on going operations. XIII – They were tracking the daily sales of their stores, their departments and their sales people”. Author describing a store and manage who listened to his recommendations and achieved new levels of sales and profits. XIV – Ad Astra per Aspera: “To the stars with difficulty”. This is a new one on me, but it tells a story succinctly. There is no easy road to success. Even 100 years ago in families like the Roosevelt’s that is the parents of Teddy Roosevelt, the youngsters, who were very rich, had to work extremely hard for success. XV – a chains biggest advantage is consistent standard (and cleanliness) XVI – “If you are not willing to support your neighbors, who will support you”. So don’t get caught in a chain store, any chain store in your town. If you shop at Wal-Mart’s the
killer of Hardware stores, lumber stores and who knows what else, then you support the very forces that may be putting pressure on your operation. XVII – Consumers want small to medium independent businesses to succeed. All other things being equal people will shop where they have relationships. And if things are not equal, then you have to have really good relationships. XVIII – the author cites a magnificent Chocolate gift store in a good location in a big mall. The lady was closing in a month and it was too late to save her. She blamed for her problems everything and everyone under the sun. The author would have had her hire an outside sales person and sell the store for gifts. Visit every Secretary in town with brochures (Doctors, Lawyers, Big companies and little companies) with brochures on her gifts. Then hand deliver a sample box emblazoned with the CEO’s name (of the prospect) and Prospects logo to the top 30 prospects. Our company might do this for example substituting five pound bags of coffee or new exciting private label bags, or a retail coffee operation might do it with coffee baskets. Revisit the prospects regularly XIX – you must be able to sell your service and why your store is better to a person who threatens to go to a chain store or competitor. You must be ready. Practice your responses. XX – the book’s objective is to bring back hope to independent businesses under pressure and giving the owners the tools to become and stay profitable.
Chapter 1: The Titanic and You
Hubris – excessive pride (and some arrogance). Inertia – the enemy The status quo – an even bigger enemy Change – your friend. Listen – Watch – Be Prepared – have back up plans in place for the very things you can not see coming – Train you staff better than ever before – how to answer the phone – collect information from customers – have a reserve of cash. Save money when the goods times are here. You might have to get a bigger mortgage to help finance your business.
If the Titanic’s skipper had listened to the radio warnings and plotted a course around the ice fields he was told were dead ahead, he, and all his passengers would have made it. So listen, watch and learn and plan and act.
Chapter 2: How we Got Here and Who’s to Blame
I have to say I don’t like some of these Chapter titles. But the author’s ideas are sound. Add value to your customers experience – give them compelling reasons to come back. The more you give the more you will get. It’s true. You must have revenue and KEEP THE PASSION – to build a success. The trap of buying at chains – like Lowes for light bulbs or Home depot for tools is that your customers might shop at chains that compete with you following your lead. There is a disconnect, that is, we do not make the connection between large chains and the destruction of downtowns (or we ignore it). The we I speak of is the retail establishments and their owners and managers, and town councils. Local business provides good wages and income that is spent locally (if the owners of successful stores and establishments also buy local) For example: Would you want to buy your underwear with the odor of fried food around – Wal-Mart with a McDonalds. McDonalds is out to capture and the coffee business and Wal-Mart helps them. Do you want to shop at, and give money to the very businesses that are hurting your future? What you have to do o Enhance customer service with knowledgeable sales people o Maintain upgraded facilities o Create clever marketing programs o Develop strong relationships with customers Get rid of archaic policies like special parking places and focus your time and effort on important stuff – like training the sales people.
Chapter 3: The More Things Remain the Same, The Less Likely Things Will Change
1. Hold on to existing Customers – the owners and executives must dot this – like the life of the business depended on it a. It does b. Its must cheaper to keep then to get new ones c. Lost customers will talk to 100 others 2. Hold up the Mirror a. Lead with the strengths the company and staff have
b. Decide if you can change c. Decide if you can do what has to be done 3. Be proactive. Think about the results you want. Think about the results every day 4. Go after the result a. You know the old adage: if you keep doing what you do then you will keep getting what you get. Put together a plan and stick to it. A little change every day. Change something right now
Figure out what scares you a lot. Figure out what you would never want to happen to your business. Then use that fear to help motivate you. Not everyone is motivated by ice cream or Icebergs – how in the world would a see captain in the north Atlantic not be afraid of icebergs? Feel the Fear and do what you have to do to make it go away. For me, Bob Johnson, fear of failure is a great motivator. Not all the time, and sometimes I coast. But as my anxiety goes up so does my action. Summary of Chapter 3 Now you know why you have to alter what you do You can see what will happen if you don’t change You have a desired result in mind and you think about it all day long You begin to change what you do a little at a time. Like brush your teeth before you shower
Like Smokey the Bear: “Only you can plot a course around the iceberg.
Chapter 4: Merchandising like Your Life Depends on It, Because Your Life Does Depend on Merchandising.
This chapter at first seemed not to apply to the issues I’ve focused on. But it does. The gist of it is that the basics, the foundation of a first class, healthy, prospering business is how it looks, how clean it is, how it is merchandised, and how frequently you clean the windows and sidewalks. I’ve taken literary license with the Chapter heading. The actual heading is “Look Around You: The Facility”. I thought this lame and changed it.
Inventory your store from outside in from the point of view of a customer. What do they see as they walk in? Do you use red, white and black to merchandise? Are your displays changed regularly? Do the displays have multi-levels? Is the Stuff people need, in the rear? You know how maddening it is go to the back of a store to get milk? It is the same in your store. I wonder though how many convenience stores were started because of this type of product placement. When I want to get in and out, I want to get in and out. So maybe some of these theories have to be re-thought. I’d try it both ways and measure the result closely to let customers decide. Is your operation Bright? Is it well lit? Do the windows shine? Do you have in place things to help a customer stay a while? Is your wifi in place? Is your web store on line and do you have a computer for customers to use with a home page of your store? Is your Blog on line? Are your Feeds up to date and gathering news and new techniques and new products from your coffee supplier? Do you decorate at July 4th? Do you decorate at Christmas? My wife and I have always thought that if a letter in a lighted sign is not working it is a sure sign that the store is in trouble. Why would bulbs not be replaced? Is it a bored, non caring owner? Or is it a lack of cash generated by the store? So to sum up: take and inventory. Create a check list. Assign the cleaning in merchandising tasks to specific people. Rotate this responsibility for good training and back up if you wish.
Then Follow Up. Keep a to-do list for each person on the staff in excel. Keep in on your desktop. Check it twice a day. Stuff will not get done unless you follow and measure results.
Chapter 4 A: Take Down Every Sign in Your Place
1. Bathrooms for Customers Only – great way to treat a needy prospect or first-time visitor. Find a way to keep your bathroom clean. Maybe people stay away from your place because of the sign, and, this lowers your sales. 2. No Refunds – not if it’s a credit card purchase. Do you want to fight with the credit card company? Anyway, who cares provided the customer is happy and you can afford to not hassle people. There is no surer sign of a troubled business than a fight over a refund, or 3. No Returns – why not? Why not make you customers tell good stories about you. Even if you suspect the person in front of you used the coffee pot for a big party and is now returning it for a refund. 4. All handwritten Signs. All of them. This is a sure sign of a not so professional business. More to come as I complete Chapter 5; I’m half way through and this book is getting better as the author moves into sales and sales training.
Chapter 5:Sell Like You Know Them; The Basics of Sales
Nothing Sells itself Selling is transferring feelings from you to your customer Customers come back to place they have relationships Build your business on service o Knowledgeable Sales People who help or guide customers through a decision o It has (feature) is not the same as, So you (benefit” o Coffee is roasted to perfection (the feature), so you can perk up your day (the benefit). o Holiday Coffee Smell Wonderful, so you can release the aroma at your counter and sell it as an Add-on (the benefit) A Well Trained Sales Force is your biggest advantage o Big boxes and big company’s forget to sell benefits o You have to sell benefits, your staff must know benefits The intent of the sales person helps the sales process because the customer will realize the sales person is trying to help. Stay focused on helping Always show the customer what they came in for, but never show them only what they came in for. If they came in for Decaf Colombian give them a sample of Decaf Ethiopian. If they want only dark roast let them see and taste a medium roast that is a great coffee Sates: o Takes Training o Takes Practice o Takes Creativity
o Takes knowledge Know the five parts of a sale
Five (5) Parts of a Sale
1. Greet everyone within 15 seconds, and greet with a prop, like a filter, or a mug, or a bag of coffee. It shows you are busy, even if you are not. Greeting: “Welcome to Kaffe Magnum Opus, Take a look around, enjoy yourself with great aroma’s, if you have any questions I’ll be right back”. Never, never, never “How can I help you?” – This invites a negative and shows little interest. a. Keep an eye on what they do, what they look at, touch, smell, read 2. Build Rapport; Show you are a people too. Build trust. Become a Friend. Be human. a. Compliment: Welcome to Bob’s Coffee. Looks like you are having a great day. b. Share: I’m having a great day too, my dog had pup’s c. Continue: What may I make for you today? 3. Qualifying Question. QQ a. What can I make for you today is good question for coffee house b. Either: i. Note what they are looking at or for, “I have more of those … ii. Comment on Similiear items. “Dark roast is nice and so are the mediums roast that have great flavor iii. Show other locations in store of similar items 4. Page 38 The most important step in sales a. It has (this feature: dark roast, 4% flavoring) so you (get to perk up your day in style) b. Features must be followed with a benefit c. If you supply a feature the customer is probably thinking “why is this person telling me this?” so your benefit statement answers that question. This hybrid car is good because it uses less gasoline and emits less carbon monoxide so our grand kids will be safer d. State the feature then tell the customer why it is important for them e. Give your customer a reason to buy the item. Like: “you simply must try this, it is devine and brings a smile to your face”. There is nothing like the aroma for fresh ground coffee, it makes you smile and brings back fond memories of childhood. 5. Close the sales a. If you use the previous four steps, the close will come naturally. Listen for buying signals like: “how much does it cost?” which tells you they are ready. Ans: about 10 cents a cup, may I grind up a pound? Or do you have a grinder at home?
b. After serving the coffee you must ask “how about a nice toasted cinnamon bagel covered with cream cheese to go with the coffee?”. Never ask “Anything Else?, which invites No. c. Who benefits to an add-on i. Customer gets something they really wanted or did not think about ii. Store gets higher sales which help cement our jobs iii. Salesperson gets higher ticket which leads to higher tips or commission. iv. YOU MUST ASK FOR AN ADD ON – IT IS THE WAY TO SUCCESS AND A PAID VACATION AND RELAXATION 1. FEATURE YOU MUST ASK FOR ADD ON 2. BENEFIT YOU GET A PAID VACATION AND RELAXATION, NO WORRY ABOUT MONEY.
Add on sales lead to profits and success
Shoe salesman carries a shoe tree around. Sells more shoe trees because the shoe tree keeps the moisture down and makes the shoe last longer and therefore lowers the cost of shoes for the customer Coffee shop must get the pastry sale or a pound of coffee to go
Sum up Sales Basics Help people feel at home People buy where they have relationships Ask qualifying question’s Train salespeople always. Practice. Train five steps to a sale and relationships Train so staff stay active/involved/walk around But always look open and smile