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The Sales-Building
Checklist
Bob Nelson
President of POWER Retailing
See also:
Cutting Edge Solutions for Creating
a Successful Sale Event
In today's fast-changing marketplace, there is a new tough consumer; they are demanding more and getting it. Here's how clever retailers are changing their operational procedures and connecting with today's shrewd buyers.This is an "audit tool" that offers cost-effective tips, tactics, and technology that can make your business more productive, more efficient, and much more profitable. The only way to improve your marketing skills is to score yourself as objectively as possible in each category.
The checklist has been designed for you to better understand the strengths and weaknesses of your business strategy. With careful planning and follow-through, you can gain the greatest competitive edge and a wonderful peace of mind!
The POWER Retailing™ Checklist includes:
- Customer Analysis
- Customer Relations
- Management Skills
- Marketing Strategy
- Insights for a Skilled Marketer
- How Healthy Is Your Business Position?
CUSTOMER ANALYSIS:
Do you know who your target customers are and what they are seeking from you?
YES [ ] . . . . NO [ ]Have you profiled your prime customers by age, income, occupation, etc.?
YES [ ] . . . . NO [ ]Does your area have a population base large enough to support you and the nearby competitors?
YES [ ] . . . . NO [ ]Should you try to appeal to a wider range of customers rather than a small segment of the market?
YES [ ] . . . . NO [ ]Have you implemented a system that tells you where most of your customers live?
YES [ ] . . . . NO [ ]Do you know the reasons why customers shop at your store? (service, convenience, personal attention, dependability, quality, price, promptness, employee competence).
YES [ ] . . . . NO [ ]Do you understand the market forces affecting the consumer's attitude when it comes to price and what they expect to pay?
YES [ ] . . . . NO [ ]Have you seen competitive changes taking place that have affected where your customers are shopping?
YES [ ] . . . . NO [ ]Do you emphasize special areas of appeal such as: type of merchandise, special sizes, lower prices, better service, wider selection, good location, or convenient hours?
YES [ ] . . . . NO [ ]Do you always offer unique products at prices your customers can well afford?
YES [ ] . . . . NO [ ]Do you have a tracking system for how many customers shop your store every day?
YES [ ] . . . . NO [ ]Do you seek suggestions from your best customers on ways you can boost business?
YES [ ] . . . . NO [ ]Do you ever try to re-establish lost or inactive customers?
YES [ ] . . . . NO [ ]Have you ever used a store questionnaire to aid you in determining customers' needs?
YES [ ] . . . . NO [ ]Do you plan on making any changes to satisfy the new value-conscious consumer?
YES [ ] . . . . NO [ ]SCORE YOUR CUSTOMER ANALYSIS: TOTAL YES ____ TOTAL NO ____
Improving any of the above areas can have a major effect on your business.CUSTOMER RELATIONS:
Have you thought about improving your return policies?
YES [ ] . . . . NO [ ]Have you made it a policy to give cash refunds when requested by the customer?
YES [ ] . . . . NO [ ]Do you offer your customers a "no hassle" satisfaction guarantee?
YES [ ] . . . . NO [ ]Do you use customer want slips?
YES [ ] . . . . NO [ ]Have you thought about extending your store hours?
YES [ ] . . . . NO [ ]Do you accept Visa, Mastercard, Discover, and American Express?
YES [ ] . . . . NO [ ]Do you analyze complaints and take action to prevent recurrence?
YES [ ] . . . . NO [ ]Have you created a system to let your customers know how much you appreciate their business?
YES [ ] . . . . NO [ ]Do you train your employees to service and work with customers in a professional manner?
YES [ ] . . . . NO [ ]Do you ever call customers to let them know when new merchandise has arrived?
YES [ ] . . . . NO [ ]Do you ask customers questions to help you focus on today's fast-changing markets?
YES [ ] . . . . NO [ ]Does your store have lots of convenient parking spaces for customers to use?
YES [ ] . . . . NO [ ]Do you have a bathroom available for your customers to use?
YES [ ] . . . . NO [ ]Do you grade your store's location every year in regards to its accessibility?
YES [ ] . . . . NO [ ]SCORE YOUR CUSTOMER RELATIONS: TOTAL YES ____ TOTAL NO ____
Improving any of the above areas can have a major effect on your business.MANAGEMENT SKILLS:
Do you try to implement proven business formulas of successful retail firms?
YES [ ] . . . . NO [ ]Have you developed your own creative approach to compete in today's markets?
YES [ ] . . . . NO [ ]Are you replacing outdated methods with new techniques and better resources for retailing in today's high-tech, fast-moving, and competitive marketplace?
YES [ ] . . . . NO [ ]Do you use a detailed open-to-buy plan for: where to purchase, what to buy, how much, and when?
YES [ ] . . . . NO [ ]Do you have an inventory system to help you make good decisions in regards to vendor performance, amount of merchandise, mark-up, and turnover?
YES [ ] . . . . NO [ ]Have you determined whether to price certain items below, at, or above the market?
YES [ ] . . . . NO [ ]Do you utilize a system for tracking slow-moving merchandise -- and those products that are your best-sellers?
YES [ ] . . . . NO [ ]Do you create new opportunities for customers to purchase more frequently from your store?
YES [ ] . . . . NO [ ]Do you organize merchandise by classification, category, and size range -- utilizing special displays and point-of-sale signs?
YES [ ] . . . . NO [ ]Have you thought of different ways to arrange and display merchandise that will make it easier for your customers to buy?
YES [ ] . . . . NO [ ]Do you know the amount of your average sales transaction -- and what you can do to increase it?
YES [ ] . . . . NO [ ]Have you tried to increase your sales transactions by offering better prices, more value, sales incentives, or add-ons?
YES [ ] . . . . NO [ ]Do you know which products are price-sensitive to your customers, that is, when a slight increase in price will lead to a big drop-off in demand?
YES [ ] . . . . NO [ ]Do you know the maximum price customers are willing to pay for certain items?
YES [ ] . . . . NO [ ]Have you perfected a markdown policy to sell out-of-season merchandise?
YES [ ] . . . . NO [ ]Have you achieved an ideal balance between your store inventory, open-to-buy, and cash flow position?
YES [ ] . . . . NO [ ]Do you use an inventory system to manage and control delivery of merchandise?
YES [ ] . . . . NO [ ]Do you have a system that tracks last year's sales to aid you in this year's buying?
YES [ ] . . . . NO [ ]Do you evaluate and fine tune your operating expense ratios on a regular basis?
YES [ ] . . . . NO [ ]Have you computerized your business to help streamline everyday tasks such as inventory control, point of sale, and overall business analysis? Do you have dependable resources where you can buy current, name brand and designer merchandise below wholesale prices?
YES [ ] . . . . NO [ ]Have you created a budget for both regular and off-price merchandise, and do you know what role they should play in your buying strategy?
YES [ ] . . . . NO [ ]Do you make it an effort to buy promotional and off-price merchandise that can dramatically increase your profit margin?
YES [ ] . . . . NO [ ]Have you developed a trusting relationship with your manufacturers, sales reps, and suppliers?
YES [ ] . . . . NO [ ]Is your business distinctive and does your merchandise fit into a niche that your competitors don't carry?
YES [ ] . . . . NO [ ]SCORE YOUR MANAGEMENT SKILLS: TOTAL YES ____ TOTAL NO ____
Improving any of the above areas can have a major effect on your business.MARKETING STRATEGY:
Do you have a sure-fire marketing strategy designed to significantly increase your sales and cash flow?
YES [ ] . . . . NO [ ]Do your marketing techniques create urgency and motivate customers to buy now?
YES [ ] . . . . NO [ ]Does your advertising excite customers and produce an overwhelming response?
YES [ ] . . . . NO [ ]Do your traffic-building techniques attract new customers and keep them coming back to buy more?
YES [ ] . . . . NO [ ]Do you test different aspects for promoting business: -- new offers -- new items -- new prices -- special announcements -- stronger ads -- and better headlines?
YES [ ] . . . . NO [ ]Do you know what type of advertising methods work the best to attract customers (direct mail, newspaper, television, radio)?
YES [ ] . . . . NO [ ]Do you use a monthly newsletter as a "marketing tool" to announce special events, and remind customers of the products or services you provide?
YES [ ] . . . . NO [ ]Are your advertising efforts cost-effective, and do they bring profitable results?
YES [ ] . . . . NO [ ]Is your advertising memorable and does it set your business apart from the competition?
YES [ ] . . . . NO [ ]Have you been able to develop a current customer mailing list?
YES [ ] . . . . NO [ ]Do you use special eye-catching customer "sale invitations" that create urgency?
YES [ ] . . . . NO [ ]During a major sales promotion do you use customer giveaways or free prizes?
YES [ ] . . . . NO [ ]Do you ever wonder why your in-store promotions aren't more effective -- despite all the time and effort you invest in them?
YES [ ] . . . . NO [ ]SCORE YOUR MARKETING STRATEGY: TOTAL YES ____ TOTAL NO ____
Improving any of the above areas can have a major effect on your business.INSIGHTS FOR A SKILLED MARKETER:
Do you attend trade shows that provide the latest technology, educational seminars, and other industry related resources?
YES [ ] . . . . NO [ ]Do you use professional buying offices to find current and off-price merchandise?
YES [ ] . . . . NO [ ]Are you aware of the easy-to-use computer systems that are specifically designed for small and medium-sized store operations?
YES [ ] . . . . NO [ ]Have you ever bought private-label merchandise to avoid the same line prices of your direct competition?
YES [ ] . . . . NO [ ]Can you join other stores in area-wide buying programs to receive better discounts?
YES [ ] . . . . NO [ ]Do you do any cross-marketing -- joining forces with restaurants, clubs, beauty salons, or whatever to jointly develop special promotions?
YES [ ] . . . . NO [ ]Do you belong to a trade association and subscribe to trade publication magazines?
YES [ ] . . . . NO [ ]Do you ever involve your employees in making suggestions for improving business and cutting costs?
YES [ ] . . . . NO [ ]Have you implemented a program to reward your employees for their extra efforts and innovative ideas?
YES [ ] . . . . NO [ ]Do you empower employees to make important decisions, even if it means losing a small amount of money to make your customers happy?
YES [ ] . . . . NO [ ]SCORE SKILLED MARKETER INSIGHTS: TOTAL YES ____ TOTAL NO ____
Improving any of the above areas can have a major effect on your business.NOW COMPUTE YOUR TOTAL SCORE OF ALL OF THE ABOVE CATEGORIES:
TOTAL YES _____ . . . . . . . TOTAL NO _____
Are the combined questions where your answers are NO more than you'd like?
HOW HEALTHY IS YOUR BUSINESS POSITION?
Are you worried about business conditions and the long-term direction where your business is headed?
YES [ ] . . . . NO [ ]Have you borrowed more money than you can easily pay back out of your profits?
YES [ ] . . . . NO [ ]Is your store overstocked with all of your working capital tied up in inventory?
YES [ ] . . . . NO [ ]Do you need cash to buy new merchandise that will keep customers coming back?
YES [ ] . . . . NO [ ]Are you having credit problems with your vendors because of past due invoices?
YES [ ] . . . . NO [ ]Do you feel troubled because your business has not been making enough money?
YES [ ] . . . . NO [ ]Have you lost your confidence because your sales are slow and behind normal?
YES [ ] . . . . NO [ ]Has your traffic flow decreased because your store is in the wrong location?
YES [ ] . . . . NO [ ]Are your monthly expenses too high and holding you back from earning profits?
YES [ ] . . . . NO [ ]Have your regular customers disappeared to the discount stores and major malls?
YES [ ] . . . . NO [ ]Do you find it difficult to compete with the major department stores always having 25% to 60% store-wide sales?
YES [ ] . . . . NO [ ]Do you let your emotions get in the way of making sound business decisions? (timely markdowns, slow-moving merchandise, trends, vendors, reorders).
YES [ ] . . . . NO [ ]SCORE THE HEALTH OF YOUR BUSINESS: TOTAL YES ___ TOTAL NO ___
Are the combined questions where your answers are YES more than you'd like?
Congratulations! Just by completing this questionnaire, you have placed yourself ahead of people who never take the time to find valuable information that can help their business grow. If you put thought and concentration into your answers, this exercise will solidify your thinking -- and help both you and your business prosper!
SUMMARY Remember, it doesn't matter how great your products are, or how wonderful your service is. Your business can't survive without customers.
To succeed, you must learn more effective operational procedures and become an expert in your area. The key to making money is to control your overhead expenses, refrain from overbuying, re-direct your open-to-buy only to profitable resources, shop for first-quality name brand merchandise below wholesale prices, and develop a better marketing strategy.
Despite what your balance sheet might tell you, inventory is no longer an asset. Today, big inventories can slow down your business and even bring it to a screeching halt.
Inventory is not like fine wine; it does not get better with age! You must focus on getting rid of slow-moving, out-of-season stock. It is money just sitting on the shelf, and the longer it sits, the harder it is to move. But you can keep your sales moving in the right direction by replacing old inventory with fresh merchandise that will bring you new sales and profits.
The Following are Essential Steps to Improve Your Profitability:
- Accurate Information (cash flow plan, income statement, balance sheet)
- Estimated Open-To-Buy (budget and projections)
- Seasonal Business Plan (operating cash and controlling expenses)
- Understand Seasonal Profit Cycles (planned sales and deliveries)
- Maximize Inventory Turnover (initial markup and selling prices)
- Plan Markdowns (correct timing and inventory balance)
- Track Sales by Classification (turnover, sales, profits)
- Control Operational Expenses (rent should not exceed 10% of total gross sales)
Wouldn't you like to have an affordable "game plan" to maximize your business? If you keep on doing what you have always been doing, nothing is going to change. Now is the time -- to shift gears and make things happen!
__________
You are invited to visit POWER Retailing's Award Winning Web Site (http://www.retailing.com) Or to contact Bob Nelson at:
POWER Retailing 1859 E. South Fork Drive, Phoenix, AZ 85048
602.460.1980 -- FAX 602.460.1981
Email: bnelson@retailing.com
Your comments and suggestions for these pages are most welcomed!
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Email: editor@businessforum.com
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URL: http://www.businessforum.com/nelson02.html
Revised: July 8, 1999 TAF
© Copyright 1998
POWER Retailing, Inc.
PHOENIX, ARIZONA
U.S.A.
All rights reserved. Reproducing any of the contents of this checklist for resale or any other distribution is prohibited by copyright.
U.S. Registered Trademark: POWER Retailing -- the power to take your sales to the top®
