I was in a retail toy store the other day and the owner randomly asked me what I thought he could do to improve his sales. He is leasing a nice store front in a small strip mall but off the beaten path. I told him that his location sucked. He looked shocked but agreed. I also told him that that’s ok. “I have successfully run plenty of retail store fronts in lousy locations.” I assumed he got a screaming deal on the lease and he had.

In my simplicity I see leasing as a marketing cost. You pay a higher lease to get a busier location that draws more traffic… store marketing. You save on your lease but the location isn’t that great your skimping on marketing unless… you market in other areas. There’s the solution. So I asked what he was doing in other marketing avenues. Word of mouth, coupons and website was his answer. Wow. I looked at the coupons, delivered in a coupon pack, boring and no real stimulating offer. I went to his website… no pictures, no offers, basically a business card. (Google PageRank 1, Alexa Traffic Rank of 7,808,372) A non-entity as web sites go. I didn’t say much more and told him I would get back with some ideas.

I started browsing around his store for a game that I had read about in a business journal earlier. This store had been recognized by a game manufacturer because of a report from a consumer about his nine year old son. The owner’s son was playing the game and literally talked the potential customer into playing with him. They bought the game and sent an email off to the manufacturer. However, the store owner had no clue that there was a story about his store and son. After looking at the game I decided my 4 year old would enjoy a “stomp rocket”. This was brought to my attention by the owner but no up-sale suggestion like extra rockets was offered. I left happy but felt sorry for the owner.

What can I tell this guy? Below are a few of the highlights I’ll discuss with him. My advice will be three fold. Location, Marketing, and Selling: 1-2-3 Small Business Success™.

1. Location

“Every brand isn’t for everybody, and everybody isn’t for every brand.” (Liz Lange) — In other words, do what small businesses do best and focus on a niche — and then own that niche. Be at the top. – American Express Open Forum

As I said before the location wasn’t that great. First thing he should do is put a location map on all advertisements visually and verbally. It should be on his background music for his phone system, business cards, everywhere. It needs to be part of his sales pitch. Secondly his brick and mortar should be organized and easy to purchase from. It should be fun. It should be unique.

2. Marketing

“We are all competing against mediocrity.” (Blue Man) — Instead of focusing on the competition, strive for a higher level of creativity. To create a great business create something extraordinary, instead of falling into a rut and settling for average. –American Express Open Forum

Since his location was marginal, his budget small, marketing through the web would be crucial. Investment into PPC (pay per click), a new exciting web design with localized SEO (search engine optimization), SEM (search engine marketing) and CRO (conversion rate optimization) would be needed.

Becoming the “specialist” in a particular game or toy wouldn’t hurt. He already had an in with the business journal’s endorsement. He needed to capitalize on that opportunity.

3. Selling

“To be successful in business you don’t just need a great idea — you have to sell it. Don’t be afraid to sell. Don’t think of yourself as anything but a marketer.” (Susan Sobbott) — For some this comes naturally. But for others, especially those who do not have a sales or marketing background, this can seem like the hardest thing in the world. However, most owners of successful businesses will tell you that they were their company’s main sales representative, certainly in the beginning. You have to be able to sell and market your business — don’t expect to delegate this to someone else. –American Express Open Forum

The store racks made no sense. There was definitely nothing to make up-selling easier. He also was trying to do the one thing a small store shouldn’t. He was offering way too many items. Even Wal-Mart’s toy department, which accounts for a fourth of all toys sold in the US, is specialized by the hottest lines and only a few aisles.

One of the key components of selling in a retail store is the per person purchase dollar amount. This is crucial to the success of any small store. Where’s your break-even point per sale? If you don’t know what that number is figure it out now. Then work on your sales skills, product placement, and correct inventories to get to this level of sales success. If he had sold me I would have bought more. Thus a successful per person purchase dollar amount. I would use loss leaders to draw traffic to lousy locations. But my team understood that we needed to be at a certain per person dollar amount to keep the doors open. We didn’t “high pressure” sell we up-sold. We suggested add-ons, different products, and so on. We were their consultant and expert. It takes a lot of effort to get a potential customer in a store. An owner needs to optimize this experience.

Obviously there will be more to discuss and work out. With a few changes he will be able to make his store and offering the best there is. Most importantly he will be able to keep his business viable which of course is good for all of us.

Copyright © 2009 Chris Lott and Lottspace. All rights reserved.