The Discovery Channel features a show called “MythBusters” on which the hosts, special-effects experts Adam Savage and Jamie Hyneman, separate truth from urban legend. In each weekly episode, they use modern science to test three popular beliefs and see if they’re accurate. In a similar fashion, I’d like to examine some cliché retail principles and explain how they could impact your business.
Buy Low, Sell High
Not many people would argue with this basic principle. However, taken to extremes, maximizing profit can lead to reduced long-term sales. The retail radical accepts poor quality as long as the product is less expensive. Then he marks up the cheapo goods as much as the market will bear.
The fact is he may fool his customers, but not for long. And when they discover his ploy, they’ll tell everyone they know. Fortunately, our extremist can use all his extra profit to increase advertising and attempt to make up for the business he has lost by buying low and selling high. A smarter approach would be to pay slightly more for quality products and keep prices competitive. In the long run, this will generate good margins and goodwill.
Customers Are Creatures of Habit
This is true, but don’t mistake habit for loyalty, which is a conscious decision on behalf of a customer to continue patronizing a business. Habit is unconscious behavior that is sustained as long as there are no penalties. Loyalty is based on benefits to the consumer.
In self-storage, as long as you offer quality products and services without (unreasonably) raising prices, customers will generally stay with you. But if a competitor underbids you or offers more benefits, there go your creatures of habit. You’ll need loyalty to maintain your customer base. For this reason, keep your features and rates on par with those of competitors, and make sure your retail display is fresh and inviting. Don’t forget to regularly add new products and run seasonal specials. To build loyalty, never stop competing for your customer’s business.
The Customer Is Always Right
This assertion is meant to be a guide to better customer relations. But retail employees sometimes use it to avoid going the extra mile or doing what’s best for customers. For example, if a customer is about to purchase the wrong product or service for his needs, it does you no good to shrug your shoulders and justify the sale by claiming “the customer is always right.”
You know the self-storage business and so should your employees. You should all be able to suggest solutions when it comes to space and moving/ packing products. For instance, there are important differences between shipping and moving cartons. Staff who can explain them will not only win customers’ confidence, they will likely recommend related products and make a bigger sale. That’s consultative selling!
To equip your employees to be consultative sellers, see that they get initial training as well as regular refreshers. To make them masters of retail sales, ask your supplier for training materials. They should be free to you, the customer.
Roy Katz is the president of Supply Side, which distributes shipping packaging as well as moving and storage supplies. The company has developed merchandising programs for many leading companies including the U.S. Postal Service, The UPS Stores, Kinko’s, Mail Boxes Etc., Uncle Bob’s Self Storage and Extra Space Self-Storage. For more information, visit www.suplyside.com.