1. Decide what you want to do.

What are your personal goals as a salesperson?

What do you want to sell? To whom?

Where do you want to be a year from now? Five years from now?

2. Decide what you’ll give up to do it.

You mean it’s not a 40 hour a week job? (That’s right!) You mean I have to constantly be aware of the competition and the buyer and any changes they make? (That’s right!) You mean I have to give up some of my hobbies or free time activity to concentrate more on selling? (That’s right!)

Here’s why: When other salespeople take off time for a coffee break during the day, make another appointment for that time instead. You’ll gain an hour a day or nearly one extra day in every week!

3. Decide your priorities.

What comes first on your To-Do list? Then second. Then third. Don’t pick out number eight or nine because they’re easier to do. First things first. Then number two becomes number one, etc…

4. Decide to… do it!

When you decide what you want to do. And decide what you’ll give up to get to do it. And decide your priorities – none of them mean anything unless you make the last decision: To do it!

Well, yes, there is another way. This was oil baron’s John Paul Getty’s three secrets of his success:

1. I got up early.

2. I worked hard.

3. My father struck oil.

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

When someone asks, “Don’t you worry someone will steal your idea?” your answer is, “But I’ve already done that one. I’m on to something new.”

Rudyard Kipling wrote a poem about Sir Anthony Gloster, a self made shipping tycoon. On his deathbed he relives his life to his son and refers contemptuously to his competitors saying:

“They copied all they could follow,

but they couldn’t copy my mind,

And I left ‘em sweating and stealing,

a year and a half behind.”

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

Here’s why: Your cost is less.

If you sell widgets for $50 each and put them on sale for $35, you reduce your profit by $15. Instead, give your customer a gift/supplement/auxiliary item that ties in with their purchase — free. If this free item has a retail value of $10, your cost is only $5 and you’re ahead $10!

Example: You sell jackets in your clothing store for $300. You put them on sale for $240 or 20% off (not a deep markdown in today’s retail environment) but you lose $60 profit.

BUT IF, instead, you give the customer a $25 shirt and a $15 tie — free, your cost is only $20 (half the retail price). You made an extra $40 on the transaction. And made the customer happier because of the free gifts he received.

We know a dry cleaner who never runs sales. But, every once in a while, to increase business, he “gives away” some dry cleaning. Bring in a suit to have cleaned and pressed and he’ll clean and press another pair of pants… free. His actual cost of cleaning and pressing the one pair of pants is far less than if he reduced the price of dry cleaning the suit.

Figure it out. Add up the difference between the money you lose in a having a “sale” against what you lose in giving away something free.

The “free” item maintains a good profit. The “sale” item doesn’t.

Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

They’ve rehearsed what they’re going to say, they expect negative feedback from you. They are ready to fight. So don’t interrupt them. Listen.

Don’t comment, don’t look around, don’t adopt the “I’ve heard all this before” exasperated look. Listen. And look at them while they’re talking.

Then, when their conversation stops, wait a second and carefully, softly say these ten words: “Tell me what you want and the answer is yes.”

If the color in the shirt ran in the washing, if they were forced to go through a telephone drill of “Push 1 for… push 2 for…” and were not taken care of, if the book they ordered was not what they thought it would be – whatever the merchandise or complaint – simply say, “Tell me what you want and the answer is yes.” They can have a replacement of merchandise, their money back, money for gas for driving to your place of business — whatever they want. And it is offered with your apologies and thanks.

Here’s what happens: the customer is at first confused, then bewildered, then amazed and then, often, apologetic.

They are conditioned for confrontation. What they receive instead is kindness.

It works.

Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

Make four phone calls a day to customers telling them of new merchandise just received you know they usually buy. Or of a special sale on their most liked items. Or any reason that gives them a personal benefit.

OR: Write four letters a day. One idea: Thank customers for their recent purchase from you.

OR: Give out four calling cards a day. You meet new people every day. A waiter or waitress. A fellow Rotarian. The person next to you on the plane. We believe calling cards are “miniature billboards.” They tell who you are and what you do and if you give enough away you’re practicing the Fuller Brush theory of knocking on enough doors and one will open.

OR: AFTO four times a day. Which is shorthand for Ask For The Order. Too many salespeople present their case and wait for the customer to say “OK, I’ll buy it.” Rarely happens. Ask For The Order.

Do one of each or four of one of these techniques every day! That’s more than 1,200 contacts a year. If only 10% respond, you have more than 100 extra sales you would not have had.

Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

Here’s why: seven out of 10 people read the headline of an ad. Only three out of 10 keep on reading.

During my 40 years in retailing, I wrote at least 15,000 headlines. Less than a handful worked every time they were used. Here are two:

“Would You Buy A $50 Yves St. Laurent Shirt On Sale for $29?”

You can substitute the original price, the name and the sale price for whatever you want to sell and it will bring in customers as long as the name is recognizable and the value is great.

We’ve successfully adopted and adapted this headline for clothing, stationery shops, supermarkets and a dozen other businesses. It works every time.

“The name is Mañana. But at $25 you’d better buy it today.”

The product was a woman’s jacket made in Mexico. We sold the entire stock of 48 pieces the same day the ad ran. We reordered and ran the exact same ad ten days later. And sold out again in 48 hours. We reordered again and sold out again.

If a headline works, repeat it. There are those who never saw it the first time. There are those who saw it and are reminded. There are those who will tell others.

Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

Yes, look at similar stores when vacationing.

Yes, be aware of what’s happening in your business.

BUT: watch, listen and steal ideas from other marketers in different businesses.

When Southwest Airlines wanted to speed their aircraft turn around time, they did not observe other airlines. They went to the Indianapolis 500 to see how crews fuel and service race cars. This gave Southwest new ideas about equipment fitting, materials management, teamwork and speed that enabled the airline to cut turn around time in half.

Granite Rock wanted to improve the way it loaded gravel into trucks in its yards because its drivers had to leave trucks and fill out papers. The company watched automatic teller machines in banks. Now, drivers put a card in a machine and don’t leave the truck and this speeds loading time.

When out of town retailers came to visit Stew Leonard’s famous supermarket in Norwalk, Connecticut, and asked for a tour of the store, Stew said he was happy to oblige — BUT ONLY if they first gave HIM one idea to increase his business.

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

“What do I have to do to be successful in mail order?” he asked Bean.

“Simple,” said Bean, “just memorize one sentence and you can go home. Here it is: ‘Make sure the story isn’t better than the store.’”

What was he saying? This: That whatever you tell the customer they will receive, make sure the product is better than the description.

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

That says it all.

Nordstrom department stores extends its exemplary service to its guarantee with a full page up front in its catalog. It offers the regular money back-or-new merchandise option plus two-day shipping by FedEx (no extra charge) and free returns. Not happy with what you bought? Call Nordstrom. They will send FedEx to pick it up. Oh yes, they also have free gift wrapping.

Hey, I want to do business with them!

Cross Pens are known for quality and craftsmanship and their “lifetime guarantee.” If one of their pens breaks, is run over by a truck or smashed in an accident, mail the pieces back to Cross and they will send you a new pen.

And then there’s the one from Jay Ward Productions in Hollywood, known for their Dudley Do-Right cartoon characters. They say, “If by some quirk in your nature you are not utterly delighted with the stuff you get, send it back within 10 days and we will return your money (and cry a lot).”

One of the best we saw was from a wine company who said if we were not happy with the taste of the wine to simply send it back and “we’ll drink it!”

Richard Griot’s catalogue, “Griot’s Garage,” prints its lifetime guarantee up front on the cover page. Here it is:

“I always chuckle when I see 30 day guarantees. Wow! 30 days! I think to myself, they apparently only want you as a customer for 30 days. At Girot’s Garage, we want you as a customer for life. Everything you purchase from us comes with a lifetime guarantee. We’ll either repair the product, replace it or refund your purchase price. Forever. Customers for life. That’s our guarantee.”

Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

Is there a baby boomer athlete out there who has not, at one time or another, used the theme from Rocky as audio motivation to do a couple more bench presses, run just a little farther, pedal a little faster?

Not many, we’d guess.  Since the original Rocky came out in 1976, its story of a small-time Philadelphia fighter who goes the distance against an imposing opponent and incredible odds has been a motivational tool for millions of people. (Some of the most touching moments in Rocky Balboa, the 2006 revisiting of the character by writer/director/star Sylvester Stallone, came during the closing credits, when they showed a wide range of ordinary people climbing the steps of the Philadelphia Art Museum, mimicking the iconic scene from the original movie.)

Rocky is a wonderful example of why we chose to write The Big Picture: Essential Business Lessons from the Movies. The core premise is that sometimes we all need a metaphor or a narrative to provide guidance and motivation as we make decisions. It really has to do with the ability to tell a story – sometimes to the people we work with, sometimes to our customers or business partners…and sometimes even to ourselves. In writing The Big Picture, we chose a wide variety of movies as our central metaphors because we believe they serve as a common language – a common mythology – that many people can recognize and share. We’ve all had moments of recognition when watching a movie when we recognized a situation or some element of our own personalities – and for a moment, at least, there was just a little bit more light.

Rocky is full of business metaphors, because it is a movie largely about desire and how far it can take you. Not necessarily to the top of the heap, of course. It isn’t giving much away three decades after the movie came out to note here that Rocky doesn’t win his boxing match against Apollo Creed. Rocky wants to go the distance and not embarrass himself. We can find motivation as we watch Rocky struggle to get in shape, to acquit himself honorably – whether he is literally pounding a side of beef or drinking raw eggs.

There is another business lesson that can be found in Rocky – this one in the story behind the movie.

It is a well-known Hollywood tale that when Sylvester Stallone wrote the original script for Rocky, numerous studios wanted to buy it as a vehicle for various star actors such as Burt Reynolds, James Caan, and Ryan O’Neal. But Stallone, even though he was penniless, gambled that this was his one real shot at stardom. He refused to sell the script without a guarantee that he’d also star in the movie. Eventually, he got someone to bite, and the rest is movie history. The movie was shot for under a million dollars on the streets of Philadelphia.

Once the movie was completed, the producers and Stallone didn’t know if they had a success on their hands. That was 1976, and it so happens that Kevin Coupe was a film major at Loyola Marymount University, taking a film criticism class. Each week the class would be shown a movie that had not yet been released and have the opportunity to listen to and ask questions of someone connected to the film.

This class was the first audience to see a finished print of Rocky. It had no expectations, no preconceptions. And to say they were blown away would be an understatement – during the final moments of the movie, the entire audience was on its feet, cheering as if it were an actual boxing match. When it was over, they all were crying and exhausted and completely enthralled by the experience – and then Sylvester Stallone walked in to take questions, and the place erupted all over again. This was before he was Stallone the icon. He was a little shy, a little amazed and completely in the moment.

Rocky made millions, garnered dozens of awards, and went on to spawn a bunch of sequels. And all because this out-of-work actor, propelled by little other than desire, wrote a script about a broken down fighter who was propelled by little other than desire.

It isn’t just the film and music that are motivational. It also is the story behind the film. And a great example of our approach in The Big Picture, looking for narrative, metaphor, and motivation in stories that we all know well.

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Michael Sansolo is a writer and consultant who serves as research director for the Coca-Cola Retailing Research Council.  Kevin Coupe is the ‘Content Guy’ for the blog, www.MorningNewsBeat.com.  They are the co-authors of The Big Picture: Essential Business Lessons from the Movies.

Finding the road less taken is rarely the problem in business. There are countless people with good ideas, countless new directions out there to be considered.

Rather, the problem is how often these groundbreaking ideas or individuals are ignored or beaten back into submission. And for individuals and companies, the big question is how to create a climate where the new idea can be properly considered and evaluated.

In The Big Picture: Essential Business Lessons from the Movies, co-author Kevin Coupe and I examine a wide range of business lessons that can be gleaned and easily shared from many popular movies. Not surprisingly, the topic of breakthrough ideas comes up time and again. It’s presented artfully in Tucker: The Man and His Dream, a dramatic telling of a real life innovator who was beaten down by the forces of convention.

We find it in the delightful children’s movie Babe, as we watch a little pig defy conventional rules to become a champion sheepdog of all things.

And most tellingly we find it in Amadeus, a fictionalized tale of Mozart’s trials and tribulations in Vienna.

Mozart, as even the most casual music fan knows, was a boy genius whose music is familiar to virtually all of us. But in Amadeus, we watch Mozart struggle to bring his new ideas for melody, opera, and more to the stage while the forces of convention do everything possible to thwart his innovations.

Although Vienna is a wonderfully musical city, Mozart tries to elevate the level of performance. He brings innovation in hopes of making the music better. Yet time and again he runs into rules set up to thwart him. Even his small attempts to build financial stability are undermined, dropping the genius composer into depression and early death.

The movie gives the innovators out there a great lesson, too. Mozart’s ideas are clearly wonderful, but for the elite of Vienna, they are uncomfortable. The composer never takes the time to build a base of support or to educate his audience. Instead he plows forward, insisting he knows best. Yes, the elites could have listened better, but Mozart shares some of the blame in his failure.

He has an enemy in his rival Antonio Salieri, who uses considerable skill to convince the court that Mozart is the lesser of the two composers. Mozart never learns how to engage powerful allies to accept his innovation.

The business lesson from Amadeus is laid clear for us again and again. Too often in business, great ideas and innovations struggle against the forces of convention. So the road less taken remains untaken or, worse yet, the innovator moves in an entirely different direction.

One stunning business example comes from the roots of Walmart, now the largest company in the United States. In the 1960s, Walmart founder Sam Walton was a store manager for Ben Franklin stores. He had a plan to create a new type of store and gleefully presented that plan to his company. In short, he was told to go back to work.

Walton gambled instead, leaving Ben Franklin and opening his first Walmart. Some 50 years later we know how that battle worked out. Had Ben Franklin management been open to the radical idea and the road less taken, today it might be the company in every town in America. The business world is littered with such stories of chances not taken and innovation unseen. The stories range from the record company that passed on the young Beatles to the computer giant IBM passing on the chance to buy out a young Bill Gates and his fledgling software company called Microsoft.

Not every new idea is a great one; not every innovation becomes the next Walmart or Microsoft. But occasionally those ideas come up, and great companies know when to listen and when to travel the road less taken.

With wonderful style and soaring music, Amadeus reminds us of the challenges of being an innovator…and the sadness that befalls the world around them when the road less taken is left abandoned.

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Michael Sansolo is the co-author, with “Content Guy” Kevin Coupe, of the new book, “The Big Picture: Essential Business Lessons From The Movies,” available by clicking here .

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .

Want proof? Try this: Think of three recent TV commercials you saw. Any three. OK, here are the questions:

1. How many items did you really need?

2. How many commercials advertised price?

Answers to both questions: None.

Which leads to our theory that the only two reasons people buy what you have to sell: (a) Solutions to problems or (b) Good feelings.

Solutions to problems means giving the customer a benefit up front. Examples: “Lose eight pounds in one month.” “How to increase your production ten percent in one year.” “How to cut back room expenses by 25% or more.”

Good feelings means you tell the customer that putting your brand of shoe cushions will make them feel they’re walking in comfortable slippers all day. Or when you give customers two dozen pictures of their child from your photography studio for the same price as one dozen — you are giving customers good feelings as well as photographs.

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

By Janis Raye

I just had my first experience with an automated reminder that I was shopping for a certain product, and it was a little bit creepy. I received an email from Williams-Sonoma with the subject line, “Thank you for your interest in: Fleur-de-Lys rubber doormats.” The email was complete with a photo of the doormat, a link to the product on the Williams-Sonoma website, with a button to “Buy Now.”

I hadn’t bought a Fleur-de-Lys doormat. All I did was browse the Williams-Sonoma website a couple of days earlier and view those mats. I was kind of interested in those doormats, though, and made a mental note to measure my entryway to see if they had a size that would fit. That’s it. But somehow the gods at Williams-Sonoma knew I was interested and sent me this follow-up message to encourage me to make my purchase. Weird.

But helpful. Despite the initial ick-factor, now I’m thinking I will measure my space and order a mat. At first I was put off to think that Williams-Sonoma was tracking my Internet clicks using “cookies” so carefully they could read my mind about the doormats. But I realized that it was a very clever way to remind me that I wanted to buy a new doormat.

PS: Once bitten on the Internet, twice shy. I bought a new doormat at my local hardware store over the weekend. Thanks, Williams-Sonoma, for reminding me that I needed one!

Here’s the takeaway for businesspeople and marketers: customer service is everywhere you sell, whether it’s online or around the corner. Just because you don’t meet your customers face-to-face is no excuse for treating them poorly, or not thinking carefully about what will satisfy them. Economy of scale is no excuse, either: the mighty Netflix handles much of its customer service via telephone, not the Internet. It may be more expensive, but they recognize that their customers appreciate the service.

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Janis Raye is the co-author of “Business Success In Tough Times.” The book “Business Success in Tough Times” examines business leaders and entrepreneurs who have shown the courage, will, and brainpower to succeed when other companies fail. Their stories illustrate nine characteristics of business success. For more information, visit www.brigantinemedia.com.

Terrific lessons can be found everywhere, sometimes from sources as distant as the Washington Redskins and the movie The Godfather. Together those two offer a very simple point: telling a story can build success for you and the people around you.

In speeches to business groups, Joe Gibbs, the Hall of Fame ex-coach of the Washington Redskins, talks about the game plan as a form of a story that is essential to winning. As Gibbs says, the game plan helps a 300-pound lineman understand the importance of him spending 60 minutes charging full speed into an equally large man. By seeing the big picture, he understands the importance of his role.

Business people face less dramatic, but equally important reasons to build a narrative. Even the most mundane job takes on newfound importance when tied to big broad goals, but the problem is that many business people—executives included—aren’t natural storytellers. And that’s where popular movies can provide powerfully descriptive metaphors that business people can use.

In our book, The Big Picture: Essential Business Lessons from the Movies, we dissect 60 movies to provide simple lessons in leadership, marketing and workplace survival. The movies we cite range from comedies like Young Frankenstein to classics like Casablanca and the lessons range from addressing problems head on to the importance of listening to opposing views. In some cases, the lessons are obvious; in others, they require careful analysis.

Overall, the lessons are easily watched, easily learned and easily shared.

If you could watch only one movie to learn key leadership behaviors, rent or buy The Godfather, the remarkable movie about a New York crime family in the post-World War II era. Even today, almost four decades after its release, The Godfather continues to be named on most lists as one of the best movies ever made. It resonates far beyond the movie screen and makes for a perfect discussion of challenging personnel matters that bedevil many good managers.

Consider just the single opening of the movie, which begins with the undertaker Bonasera needing a favor. He comes to petition Don Vito Corleone on the day of his daughter’s wedding, a day on which the Don cannot refuse a request. But Vito is put out. “I can’t remember the last time you invited me to your house for a cup of coffee…you never wanted my friendship. You were afraid to be in my debt,” Vito says.

Instantly we get a clear business lesson. Build relationships in good times, not when you have a problem. This is something we’ve seen throughout the years, often between businesses and the media. Companies decline to cultivate the relationship in good times and suddenly have no connections when facing bad publicity or charges. Like Bonasera, they don’t pro-actively build relations.

But the lesson goes beyond that. Vito shows great management skill in how he deals with Bonasera. Rather than rejecting him outright, Vito expresses regret at their relationship. That encourages Bonasera to take the next step and invest emotionally in Vito and his business enterprise. In doing so, Vito ensure that Bonasera sees the big picture of their relationship, a task many managers fail to accomplish with associates.

Vito also recognizes that every relationship is special and each one needs slightly different handling. In that opening scene, Vito receives four visitors and treats all four differently. After reprimanding the undertaker, Vito gives the baker Nazorine a friendly meeting befitting his long cordial relationship. The singer Johnny Fontaine gets yelled at and encouraged at the same time. And, most strikingly, Luca Brasi, the scary and monstrous hit man, gets the gentle and focused audience he requires. For this meeting alone, Vito stands and never breaks eye contact.

Vito understands that different relationships must be worked differently; that he must be a different boss to many different personalities. As the movie proceeds, we see his eldest son, Santino, take over the family and demonstrate the destructive force of a manager who hasn’t mastered any of these subtle skills.

These are lessons that any manager or anyone aspiring to be a manager could use. You can watch Vito and his sons to quickly get a graduate course lesson in people management. You can share the scenes with colleagues to encourage discussion and explain issues.

And you can do it while enjoying one of the greatest movies ever made. We hope you will agree that The Big Picture: Essential Business Lessons from the Movies offers a bevy of great stories, great narratives and great lessons all from movies you’ll enjoy watching again and again.

More information on The Big Picture: Essential Business Lessons from the Movies can be found at www.brigantinemedia.com/bigpicture.

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Kevin Coupe and Michael Sansolo are the authors of “The Big Picture: Essential Business Lessons From The Movies,” available by clicking here .

I ALWAYS SET MY watch five minutes ahead of the correct time. Whenever I look at my watch I just assume that’s the exact time. That way when I make an appointment for a specific time, I’m there BEFORE the specified time. If you’re meeting with an executive to whom time is a precious commodity, he or she will appreciate your being there before the scheduled appointment.

Buck Rodgers, corporate VP of marketing for IBM, called for a 9 a.m. sales staff meeting. At 9:30 people were still drifting in. At the end of the meeting he said, “Next week’s meeting will start at 9 a.m. exactly. Be on time.”

At the next meeting, he looked at his watch. When it reached 9 o’clock, he locked the door and began his briefing.

For the next half hour there was knocking at the door as latecomers wanted to be admitted. Rodgers kept on talking, ignoring the interruptions.

When the meeting ended he told the people that were there on time: “When you leave, the people who were not here on time will ask you what we talked about. You are not to tell them. If you do, you put your job in jeopardy. There’s no reason someone who is late should benefit from you being on time.”

The meeting broke up and as the participants left, those outside the room asked, “What happened?” “What did he talk about?” And were answered, “Sorry, I can’t tell you.”

The latecomers were shocked. Why couldn’t their colleagues tell them what happened? Did it have something to do with their job? Were promotions discussed? Were new territories assigned? What?

At the following week’s 9 a.m. meeting everyone was in their seats by 8:45.

Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

We wrote The Big Picture:  Essential Business Lessons from the Movies using a core premise: that great leaders need to know how to tell a story…that a vision for where a business needs to go is best achieved when you have a narrative that resonates with your employees, customers and even business partners.

We chose to focus on business, but the same can be said of politics, government, even religion – that the ability to tell a compelling story that is truthful and relevant and actionable can make the difference between success and failure. One of the nicest comments we’ve gotten about the book is that it isn’t just business lessons – it’s life lessons.

We picked some 60 movies as metaphors for how to tell a story because we thought that they serve as a common language or mythology for many people – if I talk about the decision-making process illustrated in movies such as Jaws or The Bridge on the River Kwai, or the brand equity priorities in American Gangster, or even the team-building ethic in Hoosiers, people seem to get it in a way that is meaningful.

It has to do with the ability to tell a story – sometimes to the people we work with, sometimes to our customers or business partners…and sometimes even to ourselves. We’ve all had moments of recognition when watching a movie or television show, or reading a novel, when we recognized a situation or some element of our own personalities – and for a moment, at least, there was just a little bit more light.

Some people, of course, learn from such moments and use this light to illuminate and inform their own decisions and behavior. Others do not, often because they are in some level of denial and prefer that the light now be shone in that particular direction. Sometimes the darkness can be comforting.

Let me give you an example from the book…and since we are in the middle of baseball season, I’ll choose a flick about the national pastime, which also happens to be one of my favorite movies. Ever.

Plenty of books have been written about the need to achieve greatness in business, and that in the current economic and competitive environment, being good enough is almost never really good enough. But perhaps nobody puts it as succinctly as the character “Crash” Davis in Bull Durham, played to the hilt by Kevin Costner. Davis is the essence of the professional baseball player, but he’s never had enough talent to play in the major leagues. (He was in the “show” for 21 days once, which he describes as “the 21 greatest days of my life. You know, you never handle your luggage in the show, somebody else carries your bags. It was great. You hit white balls for batting practice, the ballparks are like cathedrals, the hotels all have room service, and the women all have long legs and brains.”)  And his gifts are considerable – he is chasing the minor league home run record, which is a pursuit he’d rather not be engaged in because it illustrates how long he’s been in the minors.

In other words, he’s good. Very good. But not great. And in a moment of bitterness, he explains to the young pitcher he’s been asked to mentor how small the difference is: “You know what the difference is between hitting .250 and hitting .300? I got it figured out. Twenty-five hits a year in 500 at bats is 50 points. Okay. There’s six months in a season, that’s about 25 weeks. You get one extra flare a week – just one – a gork, a ground ball with eyes, a dying quail – just one more dying quail a week and you’re in Yankee Stadium.”

That’s an important message to communicate to our associates, employees, and business partners – that the difference between being great and good is often razor thin, and that it is never acceptable to accept being good enough. Because ultimately, the minor league home run record – in baseball and in business – is pretty meaningless.

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“Content Guy” Kevin Coupe is the co-author, with Michael Sansolo, of the new book, “The Big Picture: Essential Business Lessons From The Movies,” available by clicking here .

Also be sure to check out Kevin Coupe’s website at www.morningnewsbeat.com.

By Neil Raphel

In general, I’ve enjoyed my experience with the social networking site, LinkedIn. So, when LinkedIn offered me a $50 gift certificate to try their advertising services, I thought I’d give them a try. I signed up for a maximum expenditure of $15 per day for an ad I created. I decided to try the service for a few days. After the first day, I noticed I had racked up $89 in charges although I had a $15 per day limit. Those charges were in addition to a non-refundable $5 activation fee.

I immediately stopped my marketing program, cancelled my accounts and wrote the company a couple of complaining emails. There’s bound to be more to this story, but as is the case with most Internet transactions these days, there is no number to call on the LinkedIn site. So far, I’ve received an automated reply that they have my inquiry. Now $89 is not quite as scary as the $2,000 bill erroneously charged to my Google AdWords account a couple of years ago, but in both cases it was impossible to find a human to talk to about the situation. Internet business may seem convenient, but it isn’t when something goes wrong and you can’t rectify the problem.

Our friend Don Gallegos has written extensively about poor customer service in stores. Internet non-responsiveness makes brick and mortar customer service seem like a luxury!

PS After a couple of days, I received the following explanation from LinkedIn Customer Support:

Dear Neil,

Thank you for contacting LinkedIn Customer Support.

I apologize for any confusion when viewing the Total Spent area of your DirectAds dashboard. This location will show all of the times that your ad has been placed and shown within LinkedIn. You will not be charged this full amount. You will only be charged the amount of your budget plus the allowed 20% overage. Any other overage charges will be covered by LinkedIn. This is to get your ad more exposure to your target audience at no cost to you.

Thank you for your continued use of our DirectAds product.

Regards,

Stephanie
LinkedIn Customer Support

So even though LinkedIn showed a balance due of $89, they will only bill for $15 plus 20%. I’m still puzzling over that one.

Coming next: Williams-Sonoma Is Watching You!

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Neil Raphel is the co-author of “Business Success In Tough Times.” The book “Business Success in Tough Times” examines business leaders and entrepreneurs who have shown the courage, will, and brainpower to succeed when other companies fail. Their stories illustrate nine characteristics of business success. For more information, visit www.brigantinemedia.com.

TOO MANY SALESPEOPLE FACED with a specific problem shrug their shoulders and say, “It can’t be done.” Wrong decision. Think in terms of how it CAN be done. Ignore the traditional excuses. Remember Winston Churchill’s speech he gave to the students at the Harrow School in October 1941. Here it is:

“Never give up. Never. Never. Never. Never.”

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

The first is: “My customers know more than I do.”

Once you believe that theory, you have the advantage of listening to them and finding out what they want. Which is often much different than what YOU think they want.

Second: “My employees know more than I do.” Again, I listen to them and empower them to make decisions so they can build a rapport with each customer.

Third: “Neither my employees nor I can be creative all the time.” I once attended a seminar where the speaker asked the audience for a definition of “management.” He listened to each person’s reply and then told them the answer was “getting results through other people.” So we use our customers and our staff and are constantly on the lookout for that which is different, new and exciting.

Fourth: “What I knew yesterday is not enough for today.” Change is happening all around us. And we must not only be ready and accepting but also be quick to adopt the new ideas because that’s what the customer wants us to do.

Fifth: “I’m not responding fast enough for my customer.” I must anticipate their needs and be quick to meet them.

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

It happened when the woman next to me on a packed plane just caused me too many questions for me to avoid contact. What she looked like wasn’t the cause. It was a combination of things.

First, she was reading a magazine article with a headline I must admit commanded my attention: “50 Great Things To Do With Your Breasts.” To be clear about this, the magazine was Cosmopolitan so you know it wasn’t about poultry. (By the way, I came up with feed small babies and distract grown men. What are the other 48 ideas?)

Second it was impossible to miss her new manicure in a rather strange shade of blue, a color that I thought only appeared on fingernails if you were out of oxygen.

But what really caught my attention was the book she had on her tray: The Prince by Machiavelli. Seriously, I have never seen anyone read that book without a political science class around him or her. So I had to ask why.

It turned out she was reading the book because of an argument with a co-worker over one of the “discourses” that make up the balance of the book that follow the famous essay on leadership. My seat mate, it turned out, was a chemist working on genetic splicing equipment who was flying cross-country to meet an important client. (The blue fingernails were the idea of a friend’s teen-aged daughter.)

Right there I got a powerful lesson on the complexity of consumer behavior. Think about it, when I described the woman with the Cosmo article and blue fingernails you probably had a mental picture forming. When I talked about The Prince and genetic splicing, the picture changed. Yet it was the same person.

And that’s the challenge with today’s shoppers who become so many different people in the course of one day, one shopping trip or one flight. There is no reason you can’t read Cosmo and The Prince, in fact, Machiavelli might have applauded the mix.

Today shoppers are more complex than ever. They draw a value equation out of a mix of needs and do it somewhat differently product by product. The trick for good merchants or product manufacturers is to create a narrative of value that works clearly with a sufficient number of moods.

It also made me think of the Coca-Cola Retailing Research Council study called Eating In that I will help present at this year’s Food Marketing Institute (FMI) show in Las Vegas. (Full disclosure: as previously noted here, I am the new research director of the council.) One part of the study details the different need states that make up mealtime decisions and tries to help us understand how the same person rushing for fast food one night becomes a gourmet cook another night. It doesn’t make sense, but it happens. And our ability to service both moods positions us better than ever to win additional sales, which is a winning strategy in any time period.

Machiavelli would likely agree. So would Cosmo.

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Michael Sansolo is the co-author, with “Content Guy” Kevin Coupe, of the new book, “The Big Picture: Essential Business Lessons From The Movies,” available by clicking here .

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .

We think the anonymity of the Internet encourages this kind of lackluster customer service. Face-to-face encounters, or even telephone-to-telephone ones, allow both sides to have their say, listen to each other, and make a resolution. Computer transactions don’t have any imperative toward agreement. You often have no other recourse but to “vote with your feet” and stop shopping that site when customer service sinks to a sub-par level.

Here are three cautionary tales from the Internet Age that illustrate the point. Don’t let your company make these same mistakes:

Falling Into The

By Janis Raye

I recently ordered four t-shirts online at gap.com. I had $20 in “Reward Certificates” that Gap had sent me, and they were about to expire. Since I wasn’t planning an excursion to the nearest Gap any time soon, I decided to do my shopping online this time. My order was small — four t-shirts on sale; using the rewards, it’s a total of $27, including shipping. What a buy! I am a shopping diva!

I wait through the automated stuff until I get a live person on the phone, because there’s no other way to explain my problem. She tells me, perkily, “That’s the way the system works.” Apparently they pro-rate the savings to each item you order, and if an item is canceled, you lose that part of your reward. They gave me $20, but took back $5. The phone person happily told me that they would refund those savings to me in 30 to 60 days and I could use them then. I tried to explain that I wasn’t buying t-shirts in 30 to 60 days — I was buying them now. I didn’t want to have to order something else in order to use the rewards I thought I had already used. Naturally, I asked to speak to a supervisor.

After a minute of waiting, the same person returned to the phone to tell me there was actually ONE more blue t-shirt in my size available, and did I want to order that again and use the $5 reward? So I did. To her credit, she had sense enough to expedite the shipment and send it for no shipping fee and in two days.

The lesson to learn here is not to offer “rewards” for being a good customer and then take them back when the company can’t fulfill part of the order. They didn’t have one of the items I ordered, so they penalized me. That just doesn’t make sense, and really made me angry. And whatever your business, you’re not in business to make your loyal customers angry.

PS: An hour after I placed the second order, I received an email telling me that the blue t-shirt was “unavailable.” Their printed apology was, needless to say, hollow. They offered a 10% discount on a future purchase within the next six months, using the very simple code W9XV3ZLJDM1ZWLFTKFT2. Too bad I won’t be making any more purchases from Gap — either in person or online.

Coming next: LinkedIn Has An Offer You Should Refuse

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Janis Raye is the co-author of “Business Success In Tough Times.” The book “Business Success in Tough Times” examines business leaders and entrepreneurs who have shown the courage, will, and brainpower to succeed when other companies fail. Their stories illustrate nine characteristics of business success. For more information, visit www.brigantinemedia.com.

Here’s why: The audience may have missed seeing or hearing the name the first time. Direct marketers say the PS of a letter is the best-read part. The reader looks at the PS and says, “Hmmm, I wonder what they forgot to mention…”

A great place to repeat your main offer.

Another way it works: Giving the customer different ways to buy your product. Telephone, fax, e-mails on catalogue pages automatically increase sales.

Here’s another way: A leading shampoo manufacturer wanted to increase sales. They analyzed their advertising. Allocated more dollars for research, had focus groups in different cities. And then, one day, someone suggested they simply add one word to the instructions for use.

They did. And sales increased 50 percent.

This was (and is) the word: “Repeat.”

Following the instructions printed on the tube on how to use their product they added the word “Repeat.” And so the customer shampooed twice instead of once. Result: twice as much shampoo used. More purchases made.

Having the customer “repeat” their purchases means doing more business with you. Good selling insures repeat business.

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

Odds are many of you haven’t heard of Bob Garfield (and sadly many of you have no idea what song I just mimicked. Rent The Graduate!) But let’s get back to Garfield, who announced yesterday he was ending a 25-year run as the advertising reviewer for Ad Age magazine.

Garfield’s reviews were always worth reading. They were funny, insightful, provocative and occasionally incendiary. (Remind you of any news service you get daily?) Mostly they were great because they were honest. Garfield was unafraid to pull back the curtain on bad or overdone advertising. He would lambast ads that were far too clever and forgot to sell their products and he would gush over great advertising that was memorable and moving. Remember: “Wassup!”

A few years back I hired Garfield to speak at a Food Marketing Institute (FMI) function and he was everything I expected. He irritated some people, enlightened others and left no one feeling ambivalent. My only regret was that in the process of preparing his speech he asked me if he could do a montage of company presidents acting as television spokespeople for their companies – a role Garfield felt few, if any, played well. I asked him not to for fear of having the entire board of directors in the montage. Garfield agreed, but in the end I was wrong. It was a message that should have been heard.

What makes someone like Garfield so fabulous is honesty and the willingness to ask the question what everyone else sees, but no one asks. It’s an uncomfortable role, but essential and far too many companies could use a Garfield around simply to keep them honest. (The good news for at least some companies is that he apparently will spend his post-Ad Age life as a consultant … “my brian is for rent,” he wrote yesterday.)

An example of asking the uncomfortable question: this past Sunday evening, my daughter and I were in our local supermarket, which serves a community with a sizable population of very observant Jews. Our local Giant store does an excellent business in selling challah, a bread that is most widely used at the start of the Jewish Sabbath on Friday nights. But on Sunday, my daughter pointed out, there was an enormous display of challah – which struck her as unusual since this past week was Passover, the holiday when Jews don’t eat bread. (One has to believe that Giant founder Izzy Cohen was not resting in peace over this mistake…)

Clearly, nobody pointed this out to the powers that be at this store. Nobody asked the question. And the betting here is that, unless there was a stunning shift in Easter Sunday dining habits, there was a lot of Challah going to waste at this particular store.

That’s why we have to question and encourage questions all around us. Because sometimes the most obvious mistake is missed by nearly everyone and we need someone to point it out.

At the risk of doing yet another a plug for “The Big Picture: Essential Business Lessons from the Movies” … the reason Kevin and I mention it so often is that we believe the lessons have relevance. In this case, consider the lesson of Star Trek V: The Final Frontier, which may be the worst film mentioned in the book, but demonstrates the importance of asking the uncomfortable question in a critical scene toward the end, when Captain Kirk makes as query that everyone around him sees as impertinent, rude and disrespectful. Until they realize that he is right to challenge even the ultimate authority.

It’s the absolute right question. Ask yourself if you’d do the same or, worse yet, how you’d react if someone questioned you.

Yesterday, Kevin took note of a New York Times interview in which Andrew Cosslett, CEO of InterContinental Hotels Group, said much the same thing: “There’s a lot of perceived wisdom in most industries that haven’t hasn’t been challenged for years. The trick in business is not to care too much. Because if you care too much, you won’t ask questions and you won’t challenge because you’ll care too much about your position and what someone’s thinking about you.”

So best of luck, Bob Garfield. Enjoy the world of consulting and don’t stray far with those caustic comments. Honesty is never in oversupply.

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Michael Sansolo is the co-author, with “Content Guy” Kevin Coupe, of the new book, “The Big Picture: Essential Business Lessons From The Movies,” available by clicking here .

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .

WHEN COMEDIAN AND ENTERTAINER Eddie Cantor was growing up in the 1920s on the lower East Side of New York City, he ran errands for housewives in his tenement building. In exchange for a piece of cake or a chunk of salami, he did their grocery shopping. But one thing puzzled him.

Why did all the housewives send him to the same store a distant ten blocks away? Why not shop a market that was closer? He offered to change to a nearer store to speed his delivery time but the housewives all said, “No.”

The next time he went to the store to fill his orders, he watched carefully to see the reason. What he saw were mistakes! If an order was for a dozen rolls, the grocer put in thirteen.

Cantor pointed out the mistake to the grocer. “No mistake,” said the grocer. “It’s good business to give something ‘extra’.”

Years later, Cantor went back to see if he could find out if the grocer was still in business. The store was gone but he finally located the grocer. He was not on the upper East Side. He no longer worked in a store. He was chairman of the board of a chain of supermarkets.

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

Don’t end a presentation by telling the customer to “sign here.” Say they can “OK the paperwork” or “approve this form.”

Don’t say “price” or “cost;” say “investment.”

Don’t say “house;” say “home.”

Don’t say “sales pitch;” say “presentation.”

Don’t say “used car;” say “previously owned.”

Don’t say “pay;” say “save.”

Don’t say “down payment;” say, “initial investment.”

Don’t say “contract;” say “agreement.”

Don’t say “buy;” say “own.”

Don’t use negative words like death, fail, lose, worry, obligation.

Do use positive words like easy, guarantee, safety, comfort, value.

The value of positive speaking was emphasized in a recent election when the Wall Street Journal reported 40 GOP congressmen received nine hours of language training and media coaching. Purpose of the program: to help GOP lawmakers use words and phrases (tested in polling) to sell basic themes like education, social security, defense, tax cuts…

Among the “power adjectives” Republicans were told to use were “able” and “American” and avoid words like “inoperative,” “cash flow,” “feedback” and almost any word that ends in “ion.”

Words convey positive or negative meanings. The most important word: your customer’s name. Use it often when you’re selling.

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

THE CHANGE HAPPENED TO me years ago in a New York hotel room. I had made a reservation for their advertised room at a “special rate for buyers.”

But the room was tiny, cramped, overlooked a ventilation shaft and one wall was mirrored to make the room look larger.

“I want a bigger room that overlooks Central Park,” I said. “That’s more expensive,” said the bellhop. “This is the ‘special rate’ room.”

I felt the “special” room was not special. I moved. My new room was larger and I awoke in the morning with a park panorama outside the window. My starting-the-day attitude was high. I felt good. Confident. First Class.

Later, I thought about what happened and realized I was traveling through life as a second class citizen. Searching for the lowest price instead of the highest quality.

Perhaps it was a throwback to childhood, scrunching up small in the train seat to pass as “under 12 years old” and entitled to the half-price children’s rate.

Perhaps it was going out to dinner with parents and knowing the never-said-but-understood commitment to order the least expensive item on the menu.

This early conditioning was part of my adult thinking.

But after experiencing the “special” hotel rate, I changed.

Here’s why: Every good salesperson must have a healthy dose of self confidence. It begins with what you think about yourself. Are you a second class or first class person? The one step higher makes all the difference. Dr. David Merrill says, “Self confidence is the degree to which you and I will go to sell ourselves and our ideas.”

You can’t do that unless you think, act, perform in a first class manner. Your outer life reflects your inner life.

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

A man comes in to buy a shirt. You ask him which style he prefers (“Button down, spread collar or tab collar?”). He chooses one. You ask him which color (“Blue, yellow, beige?”). He chooses one. Now you say you have several ties that go well with the shirt they have chosen. Do they like a solid color tie, a stripe or a print? They will choose one. You give them a selection. They make the choice.

It goes on and on. At no time are they asked if they want to buy or not to buy. They are simply asked to make a choice between the selection offered.

It works for automobiles, wallpaper, insurance, any business. All you do is have the customer narrow the choices down to what-they-want. And, at the same time, you confine the choices to what you want to sell.

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

The salesperson acts with tremendous self confidence. He is a strong believer in “imaging.” He sees himself throwing the pass for the touchdown, breaking the track record and always making the sale.

His philosophy is this:

“If I’m not making sales, it’s not the weather, the economy or the time of the year. It’s me.

“And if I AM making sales, it’s not the weather, the economy or the time of the year. It’s me.

“After all, somebody’s buying something from somebody. Now, how am I going to have them buy from me?”

• • •

There is an English comedy, “A Pair of Spectacles,” adapted from the French by Sydney Gundy. It was produced in London in 1890. The story is about a kind and gentle man who suddenly finds himself in all kinds of trouble. Here’s why: When he left his home one morning, he picked up the wrong pair of glasses. From that moment on, he became mean and distrustful.

The point: You must look at life through the right glasses to understand, visualize and achieve your goal.

“Success or failure in selling is caused more by mental attitude than by mental capacities.”

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

• He went to see King Gillette, owner of Gillette blades and said, “I have six words on this folded piece of paper. If you decide to use them, you pay my fee. If you don’t, I leave.” Gillette took the paper, unfolded it, read the words and wrote out a check. Here are the six words: “How are you fixed for blades?”

• He was asked by representatives from America’s drug stores on how to increase sales at their food counters. He gave them the phrase that immediately put more money in the register. When a customer asked for a malted milk shake, the clerk asked, “One egg or two?”

• He was contacted by the salmon industry in the Northwest. Customers were used to opening a can of salmon and seeing the pink color. For some indescribable reason, a new salmon catch, when processed, was the color white. Fearing the customer would not accept the product, the industry turned to Wheeler for help. He solved their anxiety and kept sales at a record pace by adding these words to the outside of the can: “This salmon guaranteed not to turn pink.”

• The Petroleum Institute asked him to come up with a phrase to have people buy more gas. Wheeler gave them three words that increased sales across the country. When someone pulled up to a station for gas, the attendants were instructed to simply ask this question: “Fill ’er up?”

Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

The first is that people join companies, but quit managers. Your company might have great products, compensation and work environment, but a toxic manager will undo all that good and damage the company. The second theory is that it is always best to hire people with good attitudes because you can teach skills, but not attitude.

There should be a third one: that how you treat people will always be reflected in their performance. Treat them well and good things happen. Treat them poorly and look out.

It’s hard to imagine a movie that could better offer a lesson on that theory than the critically acclaimed and Oscar nominated “Precious: Based on the Novel Push by Sapphire.” This riveting picture reminds us once again that people rise or fall to the level of the expectations they are given and the way they are treated.

“Precious” is quite simply an uplifting, yet brutal movie to watch. Its main character, Precious, is an obese, functionally illiterate inner city teenager who is pregnant for the second time. And it gets worse. Both pregnancies are the result of being raped by her father and her mother is complicit in her mistreatment, abusing her emotionally, physically and sexually. (Mo’Nique’s performance of the mother is riveting and completely justifies her Oscar for best supporting actress in this film.)

Every scene between the mother and daughter paints a horrific picture of home life and there is absolutely no reason to believe that Precious’s life will amount to anything. In fact, it’s hard to believe her life will last far beyond her teens.

But three people see something more in Precious. First, her math teacher understands that the obese, overage girl in his middle school class is not an imbecile. Precious barely reads, but she understands math and the teacher passes his findings on to the school administrator. That administrator also gets involved and recommends that Precious switch to an alternative school that might better support her needs.

The teacher in the alternative school provides Precious the encouragement that has been absent her entire life. Calling the girl by her given name, Claireece, the teacher provides her a new start with new skills and new challenges. And with that background, Precious thrives, growing academically and emotionally. Incredibly, this brutally raw movie that will make you turn away in pain at times, manages to end in hope and optimism.

And there is our management lesson. Many of us have had associates or co-workers who simply seem disinterested in the job. Many of us have been through the painful process of poor performance reviews or even dismissals. And many times those actions have been entirely justified. Sadly, life isn’t a Hollywood picture where kind words and deeds always turn someone’s life around.

Yet, “Precious” reminds us that our words and attitudes matter. If we treat an associate as an incompetent, the likely result is poor work. Sadly, we will get what we expect. In contrast, if we treat people with respect and understanding and if we remember that words of encouragement must always outnumber criticisms, we might see the kind of response we seek.

A number of years ago, a good friend of mine was hired as the chief technology officer for a Fortune 50 company. On taking the job he was told that his staff was underperforming and that change (possibly firing the entire group) was necessary. Before taking action he decided to meet with the staff to get a sense of the situation.

What he learned was that many of the people on his team had seen their jobs expand as technology became more important at the company. As that happened a number of them found themselves working outside their areas of competence and experience. Plus, they knew they were failing. By taking an open attitude with them, my friend was able to undo much of the damage. The staff was realigned and within six months the underperforming department seemed virtually reborn even though he did not replace a single person.

It’s a story to keep in mind. One more regular piece of management advice is that attitude will determine altitude. That is, people won’t fly if their spirits are crushed. “Precious” gives us a brutal, yet compelling example of how this works and the lesson is painfully important.

When it comes to people: what you reap is certainly what you sow. “Precious” reminds us to daily think about how our words do that sowing and reaping.

Michael Sansolo is the co-author, with “Content Guy” Kevin Coupe, of the new book, “The Big Picture: Essential Business Lessons From The Movies,” available by clicking here .

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .

He wondered how that happened when he only planned to buy the jacket.

He returned to the store the next day. He told the salesman he was a writer. Would the salesman share with him the secret of selling him so much more than what he planned to buy?

The salesman told Hoyt his selling methods. Hoyt was intrigued with the idea of finding out what techniques were used by top salespeople. For the next few years he traveled across the US asking top salespeople what made them successful. When he returned home and reviewed all his notes, he discovered, to his surprise, that almost all of them had the same ten characteristics. He wrote a best selling book called “America’s Super Salesmen,” listing the ten.

Here they are:

1. Work hard.

2. Be self confident.

3. Have self discipline.

4. Persevere.

5. Be flexible.

6. Have goals other than dollars.

7. Respect the buyer’s good sense.

8. Learn from others.

9. Be able to handle big dollars.

10. Be a perfectionist.

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

ODD PRICES MEAN “BARGAIN” to the customer.

If a product sells for $29.99 it “sounds” less expensive than $30. In fact, it even “feels” closer to $20 than $30.

Example: A test was given to women members of church groups and PTAs in middle income Chicago suburbs by Robert Schindler, assistant professor of marketing and behavioral science at the University of Chicago’s graduate school of business.

His team put together two booklets of clothing, furniture and shoe ads from out of town newspapers (so the women would not be prejudiced by names they knew).

The put even prices in one booklet and odd prices in another booklet for the same merchandise. Each group saw only ONE booklet. Here are the results:

• Odd prices had a positive effect.

• Reducing the item in price by as little as one cent increased the number of people who thought the advertised item was on sale, even though NONE of the ads said “sale.”

A study did an analysis of final digit prices used by retailers. The number “9” was used 36 percent of the time.

When Life magazine experimented with a subscription price ending in “7,” sales jumped.

Odd.

But true.

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

1. Beeper Greeter
2. Customer Relationship Manager
3. Culture of the Well
4. Goal Congruence

Beeper Greeter

Picture all checkout lanes busy at your local supermarket. Among those checking out are some of its highest spending Best Customers. Now, how can your supermarket give additional personal recognition to these customers who provide the majority of its sales and profits?

Katz Foodtown, in conjunction with its loyalty partner, S&H Solutions, devised an elegantly simple solution. They introduced a new role, the Beeper Greeter. Every time the loyalty card of one of Foodtown’s Best Customers is scanned, it automatically activates the beeper on the Front End Manager’s belt. Glancing at her beeper’s screen, she sees three things: which checkout she should move to immediately; the name of this extra-special customer; and the customer’s recent spending level. Arriving at the checkout, the Front End Manager begins by helping bag the order and then eases into a conversation with the customer, making her feel especially welcome. Included in the conversation is usually one question: Is there any item we don’t carry that you have to go another store to buy? If there is, the Front End Manger immediately writes it down on her Top Shopper (ie, Best Customer) log sheet along with the customer’s card number. With a warm smile, she tells the customer she’ll check to see whether they can stock it and that she’ll let her know the following week.

And she does! At the end of each day, each store has a procedure to check warehouse availability of all such items mentioned by Top Shoppers. If available, a shelf label is created for it (for space allocation and re-ordering purposes), and it is ordered. After it is placed on the shelf, the soon-to-be-delighted customer receives a phone call or postcard from the store saying she can now find her missing item on shelf X on aisle Y.

Why go to all this trouble when no other food retailer does? I asked brothers Noah and Dan Katz, who operate the chain. Their answer was stunningly simple. “Six years ago,” they said, “we made a serious commitment to grow our business. What, we asked ourselves, could we do that couldn’t be duplicated by our competitors? One key idea emerged: the relationship we build with our customers. Our Beeper Greeter is an example of this. By offering the items that our regular customers want and giving warm friendly service we remove major reasons for our customers to shop elsewhere. And it’s working! We have had nice comp-store sales gains every year since we introduced our loyalty program in 1999.”

Customer Relationship Manager

The Beeper Greeter program reflects the Katz brothers’ realization that the most profitable way to build sales is to focus on increasing the number of their Top Shoppers. Every retailer acknowledges this, but few do anything about it. A few years ago, they added a Customer Relationship Manager to each store’s management team, and charged her with just three goals: New Customer Acquisition; Customer Retention (especially Top Shoppers); and Customer Outreach.

Earlier, when analyzing their customer data, they had seen that many of their new customers weren’t returning after their first visit and that a majority of new customers were off their radar screen 12 months later. So the Customer Relationship Managers were challenged to reduce new and existing customer defections by designing, implementing, and monitoring appropriate programs. One such program I admire is that, every day, each Customer Relationship Manager sends a hand-written note of welcome to all of her store’s previous day’s first-time customers (who spent over a certain amount).

In addition to their Beeper Greeter program, aimed at retaining their Top Shoppers, the Customer Relationship Manager sends them surprise offers during the year as well as a card on their birthdays.

Foodtown’s Customer Outreach program is novel. Each Customer Relationship Manager has increased her store sales by going into the surrounding marketplace and seeking incremental business, (eg, regular lunch orders from the mechanics in a nearby Jiffy Lube and general grocery store needs from a local daycare center).

Culture of the Well

One of the most difficult elements in effecting change in any organization is instilling new ideas and behaviors into its culture. Foodtown chose the “Well” method. This is named after the African village well where, each day, the women come for their water. While there, they chat, exchange views, and learn about the other families in the community. Unconsciously, this reinforces and solidifies the tribe’s culture.

The most successful business practitioner of the Well method of cultural clarification and reinforcement is Wal-Mart, with their 30-year old practice of Saturday morning meetings. Every Saturday, all salaried associates, together with top field managers, gather for 3 hours in Bentonville, AR, to discuss the past week’s business, lessons learned, and plans for the coming week and beyond. This weekly repetition of attitudes and values, combined with how to approach opportunities and problems, seeps into the attendees’ subconscious and become part of the company’s strong cultural norms.

Foodtown has adopted the same Well approach in their quest to become a committed, customer-centric company. The basement of one store was converted to a conference center and, every 4 weeks, all Store Managers and Customer Relationship Managers come to the center for a 3-hour session to discuss just one topic: the company’s customers. The meeting includes presentations by each Customer Relationship Manager on the successes she has had with her Outreach Program along with her other customer successes. Of course, such sharing encourages copying by the others. In addition, they have Scorecard Time: a review of each store’s customer numbers, ranging from its increase in Top Shoppers to its return rate of new customers. Over time, this approach has helped instilled a reverence for both customers and customer growth throughout the whole organization.

Goal Congruence

Of course, the Well approach works best when the values sought are not only clearly communicated but are also inspected to measure the degree of accomplishment, followed by either redirection or reinforcement (using recognition and rewards). Here, again, Foodtown excels. Each week, mystery shoppers test every major element of the customer experience: Were Top Shoppers asked if they could they find everything they needed? Did they receive a follow-up call or postcard to say the item is now in stock? And not only that, were the items actually at the spot on the shelves where they were told?

To recognize progress, Foodtown rewards equally the members of each store’s management team (Store Manager, Meat Manager, Produce Manager, Front End Manager, and Customer Service Manager, etc) with a bonus payment for each additional Top Shopper. Foodtown believes customers are not just a responsibility of the Customer Relationship Manager – it’s the responsibility of every department in the store. That’s goal congruence!

End Note

This review is just the tip of the iceberg of the ideas and practices that one sees at Katz Foodtown. But it provides a flavor of what retailers can do if they are really serious about putting customers at the center of their business and placing their Best Customers right in the bull’s-eye.

Copyright © 2005 Brian Woolf

Brian Woolf is a global leader in loyalty marketing. In addition to writing three definitive works on the subject, “Measured Marketing: A Tool to Shape Food Store Strategy,” “Customer Specific Marketing,” and “Loyalty Marketing: The Second Act,” he spends his time helping retailers develop and strengthen their loyalty programs. For more information about Brian and his books, visit www.brigantinemedia.com.

“You” keeps you reading. An excellent example is the Newsweek subscription letter written by copywriter Ed McLean and used for nearly 15 years. The response consistently returned a higher rate of subscriptions than all the other letters Newsweek tried. More than 100 million copies of this letter were mailed!

The letter began, “If the list upon which I found your name is any indication, this is not the first — nor will it be the last — subscription letter you receive. Quite frankly, your education and income set you apart from the general population and make you a highly rated prospect for everything from magazines to mutual funds…”

The word “you” is used 26 times on just the first page!

Max Hart of the clothing firm, Hart Schaffner & Marx, disliked long copy in ads. He kept telling his ad agency to cut words out of their copy.

One time a copywriter approached Hart with an ad describing in detail the quality of wool used in the firm’s clothing.

Again, Hart said that there were too many words.

Frustrated, the copywriter said, “Mr Hart, if I show you a headline that would make you want to read every word in the ad, no matter how many words I used, will you run this ad as is?”

Hart agreed. The copywriter soon came back with a new headline. Hart read it and said, “Run the ad!”

The headline: “This Ad is All About Max Hart.”

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

The Final Five Success Factors for Customer Loyalty
From the Third Year of Your Programme Onward

By Malcolm Fowler
EVP Products and Marketing, Ernex, Inc., Canada (July 16, 2003)
Original printed at www.brianwoolf.com

To catch up on critical factors for success in the first two years of a loyalty programme, read Malcolm Fowler’s original article, ‘Five critical success factors for planning and launching a loyalty programme’. And now Malcolm reveals the roadmap for success in year three and beyond…Loyalty programmes begin to mature in year three and beyond. Finding out when your programme is maturing will depend on a number of factors including the type of industry you are in. But it is safe to say that until you can start to look for year-on-year trends in data, it’s not possible to assess important loyalty metrics like retention, or your efforts to influence the behaviour of loyalty programme members.

Once your loyalty programme does begin to mature, there are five more critical success factors that will help you stay focused and on track to maximise your investment:

1. Maximise the use of your loyalty information – but not just for your loyalty programme.
One of the top reasons businesses report wanting to create a loyalty programme is to find out who their customers really are. Now that your loyalty programme has built a customer profile, use it well. Extend what you have learned about your best customers into your general marketing strategies.

Programme members will tell you where they live, when they shop, and even how old they are – it’s all in the data. Use that data not only to communicate with your loyalty programme members but also to plan your broader marketing initiatives.

2. Look at year-on-year performance data.
It takes time to establish a baseline of performance within your loyalty programme. Now that one is emerging, one way to stay focused on improving your programme is to start paying attention to year-on-year performance data (and to continue to do so on a regular basis).

Monitoring even simple measures like acquisition, number of active customers, and average spend data gives you valuable information for programme planning. Compare same store, same month, from year to year to get a regular picture of your programme at the store level.

3. Create differentiation within your loyalty programme.
Many loyalty programmes have ‘tiers’ which are established as the programme matures. Most frequent flier and hotel programmes have these characteristics. The loyalty rules within the different tiers of these programmes can be very complex.

This complexity is the result of many small changes within the programme over time, each designed to treat specific customer segments within the loyalty programme differently. The key is to make this complexity visible to loyalty programme members who are already familiar with the base programme.

As your programme matures, consider tiering as a way to establish more value for more loyal members, and to give them ‘performance targets’ to strive for.

4. Cross-marketing can add even more value.
If you have established a powerhouse of a loyalty programme, your marketing power extends beyond the walls of your business. Suppose you are running a theatre chain and that there is a restaurant chain that is almost always situated near your theatres. Adding value to your loyalty members without affecting your business could be as simple as rewarding frequent movie goers with a restaurant offer (restaurant sponsored of course), or having the restaurant award and pay for loyalty points within your programme when your members dine there.

The key to any initiative like this is to protect your brand while adding value to your member at no cost – or even at a profit to you. But even if stretching your loyalty programme beyond the walls of your business doesn’t appeal, the concept of cross marketing still applies. Employ techniques to encourage loyal customers who only experience one segment of your product to try others. Use your loyalty knowledge to identify them, and use your loyalty currency to influence them.

5. You are never done.
Loyalty programmes are living, breathing things. As long as they can adapt, they never get old. Continually adjusting your programme to address changes in your business, customers, and market trends will make it always relevant and valuable. Certainly, keeping up with these adjustments requires an ongoing commitment but it is one that pays off handsomely when done well.

In conclusion…

As I have said before, loyalty programmes go through three main stages: First, programme creation. Second, programme launch and early operation (the first two years). Third, and finally, maturity (years three and beyond). While established programmes are rarely recreated from the ground up, they are often modified to meet the ongoing needs of their members and the business.

Paying the same attention to detail for each programme iteration as you did to the creation of your original programme, and following the five critical success factors for each of the three stages will help ensure a successful and profitable loyalty experience.

Copyright © Malcolm Fowler

Brian Woolf is a global leader in loyalty marketing. In addition to writing three definitive works on the subject, “Measured Marketing: A Tool to Shape Food Store Strategy,” “Customer Specific Marketing,” and “Loyalty Marketing: The Second Act,” he spends his time helping retailers develop and strengthen their loyalty programs. For more information about Brian and his books, visit www.brigantinemedia.com.

He sold the patents to a Mr. Hoover who brought this new-fangled “electric broom” to department store buyers. They turned it down. Their reason: There was no need for this contraption. People bought inexpensive brooms to clean floors and rugs. Who would want to spend more money for an electrical gadget that did the same job?

Hoover hired a sales force that went door to door. They walked into living rooms all over America spilling dirt on rugs and then whisking them clean with this new “vacuum cleaner.”

Soon, every home had to have one.

Soon, department stores quickly stocked them because the customer wanted this new cleaner.

What happened? A “want” was created by a clever marketing person.

He found out what the customer wanted… and gave it to them.

Salesmen who say they are selling merchandise to fill their customers “needs” are living in the wrong century. We have not been a “needy” country for many years. Today’s successful salesperson are not need-fillers. They are want-creators.

As little children we are asked by adults, “What do you want to be when you grow up?” No one asks, “What do you need to be?” The reason is simple. If you “want” something strong enough you will produce it, work for it or buy it.

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

Stew told me the event that created this philosophy.

A customer returned a quart of buttermilk she had bought at his store. She said it didn’t “smell right.”

Stew smelled the carton and told her, “Smells right to me.”

The woman disagreed. Stew and the woman then argued back and forth over who was right.

Finally, Stew gave the customer her money back.

The woman left. But not before she gave him this parting sentence: “I don’t like the way you treated your customers. I’m never shopping here again.”

Stew had done the right thing (he refunded the customer’s money) but he had the wrong attitude. He lost $246,000 arguing over a quart of buttermilk.

A survey from the Ernst and Young accounting firm said most businesses felt the personal relationship with the customer was only 10 percent of the buying decision. When customers were asked, they said it was 70 percent!

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

Five Success Factors for
Planning Your New Customer Loyalty Programme

…and Five More for Launching It

By Malcolm Fowler
EVP Products and Marketing, Ernex, Inc., Canada (July 17, 2003)
Original printed at www.brianwoolf.com

Getting Started

Creating a successful loyalty or electronic marketing programme that works for your organisation and your customers requires careful planning and execution. While it is difficult to dispute the benefits of attempting to do something good for customers, there are some tried and tested practices that cannot be ignored.

Without these practices even the most well-intended customer loyalty programme could fail to meet internal expectations, external expectations, or both. Before kicking off any loyalty programme, there are five critical success factors an organisation should consider:

1. Ground the programme around a core brand: your business.
Although it sounds simplistic, any loyalty programme should reflect the same values, beliefs, and core business benefits on which the company prides itself. Most companies have a mission statement. Take it out, dust it off, and be certain the mission is met in the programme’s positioning.

Are there corporate beliefs you expect your employees to live by, or specific key differentiators that you offer your customers? If so, let them guide the loyalty programme too.

If the challenge lies in determining some simple rewards to provide for customers, look to your top selling items and provide a reward that is similar in meaning and value.

The beauty of a loyalty programme is that it allows you to be creative and dream a little – provided you keep it grounded in the reality of what customers want and expect from you. After all, customers are the ones who decide which stores they will frequent (whether that is your store or the merchant down the street), based on both product offerings and the way they are recognised and treated once there.

2. Rally management and organizational support, then make it happen, both in the stores and behind the scenes.
As important as the loyalty programme is for customers, it is also critical to take into account the back-end support of your management and staff. If the store managers and/or the company president don’t care about how it works, or if they have no idea how to make the programme into a company-wide practice, it will fail.

Without broad organizational support from the start, and without creating internal excitement and buzz around the up-coming launch of a loyalty programme, a merchant runs the risk that shop staff will not understand the programme’s benefits, how it works, and how to sign up members.

It’s important to remember that loyalty programmes have the power to generate interest right at the point of sale, giving store staff a way to immediately interact with customers, demonstrating that they are indeed valued.

A well thought-out and executed loyalty programme has the ability to provide information about a store’s best customers – something you can take advantage of and use throughout the organisation, and at every customer interaction.

3. Adapt messages and offers to keep customers coming back for more.
Once the loyalty programme has identified the company’s best customers, those that are up-and-coming ‘best customers’, and those that are ‘laggards’, it’s time to get down to the real nuts and bolts of the programme: Motivation – learning what motivates customers, whether it’s a spring promotion for your best customers, or a special incentive geared toward those who haven’t visited for a while. It’s an unparalleled opportunity provided by a loyalty programme.

More importantly, the results can be measured to determine what worked and what did not. The bottom line is this: don’t be afraid to learn. While sticking with tried and tested practices, carry on testing (and then test some more). The results may be surprising!

With loyalty programmes, ongoing testing and adjustments are cost-effective, immediate and almost completely pain-free. With a few minor tweaks, today’s test just might be tomorrow’s standard practice.

4. By all means, keep it simple!
In loyalty programmes, complexity is not an asset. If your customers or staff struggle to understand the benefits of it, the programme has already failed. By designing a programme with easily communicated benefits and with realistic, identifiable, and attainable rewards, customers will be more likely to sign up – and your staff will be more likely to promote it both internally and externally.

But don’t stop there. Once everyone has caught on to the programme’s basics, be sure to provide continuous support for ongoing awareness efforts, adding promotions that can become progressively more targeted at specific members within your programme over time.

5. Use ‘face time’ and implement a strong point of sale strategy.
When rolling out a your programme, it is important to take advantage of the point of sale location – where interactions take place with your top customers and others. According to a recent Point of Purchase Advertising Institute (POPAI) consumer buying habits study, over 70% of purchasing decisions in mass merchandisers and supermarkets are made in the store. Perhaps as much as 70% of your opportunity to have effective communication with your loyal customer base occurs there as well.

Adopt a strong strategy that expedites the introduction, and promotes the over-all customer benefits and ongoing programme enhancements, right in the store. Customers will take notice.

But the benefits don’t stop there. By extending the same promotional practices to non-loyalty shoppers, you can take advantage of the in-person ‘face time’ to help encourage additional programme memberships and to press home those company differentiators.

Now you’ve started

Those five steps represent a good way to plan a loyalty or electronic marketing programme strategy. Brainstorm the programme components, be creative in your delivery, and be flexible enough to make adjustments to implement a loyalty programme that works for both you and your customers.

When implemented properly, a loyalty programme can be the single most successful way for you to differentiate yourself from your competition. By focusing on these five critical success factors, you can optimise your customer loyalty programme and increase your return on investment – all while improving customer communication, brand loyalty and over-all customer satisfaction.

The first two years… and the next five steps

One of the greatest challenges to a loyalty programme usually occurs between the 6th month and the 24th month of its operation. It is during this period that the excitement and anticipation created by the programme’s launch starts to decline. The customers – and the company’s CFO – start to measure the programme and its results. There are five more critical success factors that you must consider during the first two years of operating a loyalty programme:

1. Communicate, Communicate, Communicate.
It takes a great deal of planning to create a loyalty programme, including thinking of ways to educate staff about the programme, and ways to garner customer participation. Once the planning is over, the key messages of keeping staff informed and customer participation need to be continually reinforced.

Create a ‘presence’ for the loyalty programme by thinking of it as an asset. When advertising, include information about the programme. Create an area on the company’s web site devoted exclusively to it. Continue its in-store presence and point-of-sale promotion, and reinforce its message to customers. If e-mail addresses are collected as part of the programme’s enrolment, they should be used to communicate with members (but only for those that have opted-in for this type of communication).

Let your employees know some very simple information about loyal customers. Facts such as “40% of in-store purchases are made by loyalty programme customers” and “The top 10% of loyalty customers have spent more than US$500 and made an average of 7 purchases” will demonstrate the value of the programme. That goes a long way toward fostering good employee attitudes to the programme.

2. Time is your friend – for a change.
There’s a reason why the first two years of a loyalty programme are critical. When a programme is launched, better customer retention is almost always at the top of the list of objectives. Better retention of customers has a direct tie to profits.

Bain and Company reports that, with respect to increasing retention, “The impact of retaining 5% of your customers can result in a 25% – 85% increase in profit over time.” The two key words in that quotation are “over time”. Seeing the results of improved retention requires time: Time to establish a baseline performance, and time to be able to measure year-over-year performance.

Be very careful of using the first six months of programme data to start formulating year-over-year activity. Because most loyalty programmes sign up new members when they make a purchase, the first few months of a programme show high levels of enrolment and high levels of spending.

The critical success factor here is for organisations to continue to believe in the reasons that dictated the creation of the loyalty programme, and allow the programme to perform. There are lots of opportunities to meet short-term objectives: Knowing who your customers are, beginning to communicate with them more often, and planning special promotions. To measure the longer-term objectives takes time.

3. Build a strong database management team.
Because loyalty programmes are successful through the information they gather, they require large databases. The customer knowledge represented by those databases is usually the reason why the loyalty programme was created.

It’s important to have the expertise available (whether internal or external) to leverage the value inside the database. Building a strong database management team is necessary to demonstrate and prove increased retention, and the success of campaigns carried out under the banner of the loyalty programme.

4. Measurement is all about control.
When planning promotions for your most loyal customers there is a great tendency to want to include everyone. However, without creating a control group, the results of the promotion will not necessarily drive good business decisions.

For instance, if a company planned and executed a promotional campaign for all customers and created an average incremental spend of US$10 per customer at an execution cost of only US$2 per customer, what would the result be? The business would be thrilled, of course, because the net profit of US$5 (this lucky business has a 50% gross profit margin) for a cost of only US$2 is a great business return!

Or is it? Now suppose we included a control group in the above example, and members of the control group spent an average of US$6 incrementally during the same period. The difference of US$4 can be attributed to the promotion, and at an execution cost of US$2 per customer, the company actually broke even.

Be sure to include a control group. Accurate promotional measurement will help drive better business decisions. To address the common concern about excluding any loyalty members from the promotions, settle on tracking which members have been excluded from a promotion in the past (because they were in a control group) and ensure they are included in the next few promotions. Everyone gets a turn.

5. Protect the customer’s trust in you.
In launching a loyalty programme and asking customers for personal data (their name, address, telephone number, e-mail address, and so on), the company will have to make some privacy promises. Even if no promises are made, there is likely to be an implicit trust in place.

Companies must never break the trust between themselves and their best customers – the strongest asset of the business. That simply means: do not sell or rent customer lists to third parties, and allow customers to opt-out of various forms of communication (e-mail, promotional distribution, and any others you may have planned). Better still, present them with the choice to opt-in to those channels, rather than forcing them to opt-out – if you’re offering something that will genuinely benefit them, and explain the proposition clearly enough, there’s no reason why loyal customers would not want to opt-in.

And for the future…

Those second five factors are critical considerations for anyone operating a newly launched loyalty programme. Keeping them in mind as you work with your loyal customers will help you maximise the value of your loyalty programme.

During the first months and year of the programme, a profile of your company’s best customers will emerge. That profile, and those individual customers, will help the business build retention and become more profitable, and the critical success factors discussed here will help ensure active, positive participation.

Copyright © Malcolm Fowler

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Brian Woolf is a global leader in loyalty marketing. In addition to writing three definitive works on the subject, “Measured Marketing: A Tool to Shape Food Store Strategy,” “Customer Specific Marketing,” and “Loyalty Marketing: The Second Act,” he spends his time helping retailers develop and strengthen their loyalty programs. For more information about Brian and his books, visit www.brigantinemedia.com.

Loyalty is not all about price. It soars when retailers link emotionally to their customers through, for example, individual recognition or listening to their suggestions and then implementing them. Emotion is the true cement that bonds customers to their preferred retailers.So I was intrigued by a new emotional path being built that will be very attractive to those who believe that corporations can, and should, play a part in making our world a better place to live in. Corporations, for example, who not only care about planting more trees to make our environment more eco-friendly but also provide a way for their customers to participate.

Imagine if you could add to your loyalty program the opportunity for customers to not just express their concern for our environment but do something about it.

Well, you now can. The idea is the brainchild of Kent Ragen. His company, EcoUnit (www.ecounit.com), provides a way for customers to earn credits for environmentally positive actions and then use those credits in ways that make the world a greener place. (Perhaps Kent will become known as the person who triggered the greening of loyalty programs movement!)

How does it work?

Quite simply. A retailer offers recognition (in the form of points or credits) when its environmentally-conscious customers bring their own reusable shopping bags rather use the store’s plastic bags or when they buy those items around the store that are designated as environmentally friendly. These may be, for example, items grown locally (fewer pesticides and less transportation), Compact Florescent Light bulbs (CFL’s), or bulk foods (less packaging). Even online shopping and delivery (efficiency) can qualify.

Each environmentally-friendly action earns a specified eco-credit which is added to the eco-account (a subset of your loyalty program database) of each concerned customer. After their credits accumulate, customers choose how they will to use their earned credits to make our environment healthier. For example, one current option includes having a tree planted (thereby reducing the amount of CO2 in the atmosphere) for just 50 EcoUnit credits.

The average American emits 21 tons of CO2 into the atmosphere each year. Currently, the program is set up so that 250 EcoUnit credits can offset one ton of carbon dioxide. Therefore, any caring customer who earns 5,250 EcoUnit credits can become carbon neutral. Now that’s a 21st century idea!

The 2008 BBMG Conscious Consumer Report found that nearly nine in ten Americans say the words “conscious consumer” describe them well and that they are more likely to buy from companies that manufacture energy efficient products, promote health and safety benefits, and commit to environmentally friendly practices. Our customers seem ready. Are we retailers ready?

Everyone wins with this program. The customer becomes even more environmentally conscious. The retailer enables the customer to do so and, in so doing, builds a stronger bond with her. And our world becomes environmentally healthier.

It’s an idea worth thinking about.

Copyright © Brian Woolf

Brian Woolf is a global leader in loyalty marketing. In addition to writing three definitive works on the subject, “Measured Marketing: A Tool to Shape Food Store Strategy,” “Customer Specific Marketing,” and “Loyalty Marketing: The Second Act,” he spends his time helping retailers develop and strengthen their loyalty programs. For more information about Brian and his books, visit www.brigantinemedia.com.

My colleagues were not enthusiastic.

“All the other stores in town are closed so we won’t get the usual traffic.”

“It’s the morning after New Year’s Eve. People will still be sleeping.”

“People stay home on New Year’s Day with beer and pretzels in front of the TV set watching the Bowl games. It’s a tradition.”

Few realized (including me) we were creating a new tradition.

We sent a mailing to our customers announcing our Winter Sale would start on New Year’s Day. We said the announcement they were reading was sent only to those on our mailing list and would not be in any other media.

The sale ran from noon till 3 PM. We arrived an hour early to check the merchandising and signs. When we approached the store we saw lines of people standing outside.

Our first thought was there was a break-in, a fire, a something…

No. They were waiting for the store to open.

At the end of the three hours (and for the next twenty consecutive years) we did more business in the three hours of our New Year’s Day sale than we did any WEEK of the year.

Surely the other stores in town would follow our lead and also capture this success.

Amazingly, they did not for ten years!

When asked why, they said, “No one goes shopping on New Year’s Day. It’s a tradition.”

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

Reverend Russell Conwell gave one speech in the early 1900s more than 6,000 times raising $5 million to found Temple University. Title of the speech: “Acres of Diamonds.” His theme: “Your diamonds are not in far distant mountains or in yonder seas. They are in your own backyard if you but dig for them.”

Moral: If you’re looking for riches, look to the customer you already have.

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

CEOs embrace loyalty programs because of their economics. Consider the analogy of site location. When evaluating two possible new store sites, the one with the higher projected ROI will be chosen. The same logic applies to customers. A rational CEO will choose to focus on that customer segment which yields the highest projected (or actual) ROI. Loyalty marketing is, essentially, all about such economic differentiation. It’s about deciding how to optimize our long term yield from the limited resources we have. Understanding our customers’ behavior and economics (derived from our loyalty program) allows us to do just that. Some food retailers whose loyalty programs exemplify this thinking include Gerland’s, Dorothy Lane, Big Y, A-Coop, and Tesco.

Gerland’s

Gerland’s, based in Houston, Texas uses a two-tiered pricing strategy. Customers receive lower prices on a wide range of shelf-identified items, triggered when their cards are presented at check-out. In addition, the company offers points on a selected range of identified items (typically private label and high gross margin items). When a customer has accumulated 400 points, a 5%-discount certificate (to be used against any subsequent purchase) is automatically generated and given to the customer when paying for her purchases.

The Gerland’s loyalty program accomplishes three main goals. It:

1. Differentiates the company from its competitors
2. Keeps customers coming back to the store (the points and discounts act as hooks)
3. Provides marketing flexibility as the company can add varying amounts of points to any customers accounts as needed (eg, locking in new customers, holding selected customers when a competitor opens)

Issuing points on a varying number of higher-margin items is superior to the traditional one point per $1 spent program because it is more flexible and costs less.

Another unique element of the Gerland’s program is that it gives its members additional rewards as their spending increases. The rewards available at four different spending levels are publicized and known to all customers. Rewards include check cashing privileges, earning your 5%-certificate at lower point thresholds, and lower spending amounts required to buy specially priced merchandise.

The most important aspects to note about the Gerland’s loyalty program are that it is:

• Open
• Tiered
• Transparent (the different reward levels are known to all)

The basic principle behind Gerland’s program is that customers who spend more contribute more to the company’s profitability and, therefore, should receive greater rewards. Its program is grounded in logic and economics. It’s no surprise that Gerland’s has a very successful program.

Dorothy Lane

This three-store chain, based in Dayton, Ohio, launched its loyalty program six years ago. After just 14 weeks into the program Dorothy Lane replaced its weekly newspaper advertising with a monthly, 8-page newsletter mailed to just the top 30% of its customers. This was a very bold move—a first among food retailers—but it worked admirably. By focusing on the top 30% of its customers, who generate 75% of its sales, Dorothy Lane was applying basic economic sense: matching costs to revenues.

The same economic sense flowed over into its newsletter. The back page carries eight high-value coupon items: with different prices for the top 10%, next 10%, and third 10% of customers. Customers know the average weekly spending thresholds that trigger the different coupon prices. Therefore, customers set their own prices! At Dorothy Lane, the more they spend the lower their prices will be. This, of course, is the same set of rules that apply when businesses buy from suppliers.

Each month the company also sends customer-specific postcard offers for items they regularly buy. The pricing of these offers are so aggressive the postcards usually elicit a Wow! when received. So Dorothy Lane calls them their Wow! postcards.

By radically altering its promotional cost structure and increasing the value to its higher-spending customers on an individualized basis Dorothy Lane has been able to dramatically increase its profits.

Big Y

Springfield, MA-based Big Y, a privately-owned $1 billion food retailer has developed a unique program. Its marketing program is extremely promotional, rare for a loyalty program. Its weekly advertisements scream headlines such as: 10 Cent Sale! 25 Cent Sale! Unlimited Triple Coupons! Super Express Deals! Buy One, Get One Free! Buy Two, Get Three Free! And Buy One, Get Two Free!!! The economics of some of these promotions are hard for competitors to understand, but somehow the overall combination works as they are regularly repeated and the company keeps growing.

These crazy promotional prices act as a magnet to draw customers to its stores and, once there, Big Y introduces another magnet: “coins” (actually, four different-colored plastic tokens). Big Y has never announced, either to its customers or employees, what triggers the generation of a red, blue, silver, or gold coin when a customer is checking out. Because coins are not issued in every transaction, “winning” a coin is a surprise to customers. As you can imagine, behind the scenes, Big Y carefully analyses customer behavior and spending. Then, after deciding which customers it wishes to reward or influence, it downloads computerized instructions to the stores’ point-of-sales terminals to give specific-colored coins to specific customers should they shop that week.

Obviously, the different colored coins carry different values and are redeemable for different identified items in its stores. (The range of items changes twice a month.) The coins have no expiration date and are redeemable only at Big Y. They act, in effect, as an alternative currency which brings the customers back to Big Y, rewarding them for their past patronage. They act as a brilliant exit barrier. How can a customer stop shopping at Big Y if she has a purse full of “coins” and more keep coming when she shops?

Like the previous programs mentioned, this program is highly successful because of its flexibility (the company decides who receives what coins and how often) and its adherence to economic differentiation: it is the higher-spending customers who receive the higher-value coins. A company which bases its program on these two foundations will always succeed.

A-Coop

A single store in a foreign country may not seem a likely place to learn great loyalty lessons but A-Coop, about 100 miles from Tokyo, is one of my favorite programs.

A-Coop’s base program is very traditional—customers receive one point per ¥100 (approximately $1)—but its ingenuity lies in the way it rewards customers for spending “big” with them. Rather than appeal to customers with three-times-a-week advertisements (the norm in Japan), A-Coop dropped all advertising in 1996 and switched those monies to rewarding customers based on how much they spend. Since then, A-Coop’s customers have received quintuple points on their purchases on the 5th, 15th, and 25th of every month. The result is that this program almost guarantees three very large purchases from customers every month.

And the points? A customer can insert her card into the store cardholder kiosk and read her latest balance at any time. Points are redeemable from the kiosk as certificates in 1000-point (the equivalent of $10) amounts. These can be used to reduce the cost of any purchase; or applied against any special event a customer bids on (eg, customers can enter a sweepstakes for a limited number of seats for a one-day visit to Tokyo Disneyworld, using the 1000-point certificates); or, can be used on the first Tuesday of December, when each 1000-point ($10) certificate increases in value by 50%, to $15! Not surprising, this is the busiest day of the year for A-Coop.

The genius of this program lies in its simplicity and its economic differentiation: those customers who spend more (particularly on certain easy-to-remember days each month) gain the greatest returns. Who needs to advertise with such a potent easy-to-understand formula?

Tesco

Tesco is the largest food retailer in the UK. Its uniqueness lies in how it has used its newly-gained customer information better than any other large retailer, anywhere in the world. Tesco’s strategy is to Circle the Customer.

After gaining customer information from its simple 1%-rebate program (roughly, earn one point per £1 spent, receive a quarterly rebate check equal to 1% of quarterly spending) Tesco has converted that data into helping build its supermarket business—and a great deal more. Customer information has been used to help develop the leading UK food home-shopping business; build, from scratch, profitable banking and insurance businesses; lay the foundations for an extensive Internet shopping mall; and add to its market appeal by allowing Tesco points be earned and redeemed at other UK retailers.

The information gained by Tesco on its customer behavior has allowed it to understand their customers’ myriad needs and then find profitable ways to solve them. Rather than just thinking how to increase customers’ spending in its stores, Tesco is using its customer data to solve a bigger riddle: In what ways can we satisfy more of our customers’ needs (even if this means moving into new businesses to do so)?

Closing Comment

All of these companies have moved beyond deciles (breaking customers into ten equal groups), the traditional way of classifying customers. Rather, they classify customer spending based upon average weekly spending thresholds. For example, among food retailers in the US, the four typical spending thresholds are: Diamonds (over $100 week average); Rubies ($50-100); Opals ($25-50); and Pearls (under $25). A fifth group, New Customers, rounds out the customer classification. Tesco is a classic example of what it means to be customer-centric.

The reason why thresholds are preferred to decile rankings is because they are so much easier to understand and manage. It’s easier to aim at increasing the number of customers spending over $100 per week, for example, that improving the metrics of the top 10% of customers (as we don’t know how many customers will be in the top 10%).

To date, the single best measurement for business success that I have found is: By how much have we increased the average number of Best Customers (Diamonds and Rubies) Per Store this year over last year? All of our efforts should be focused on improving that number—as do the retailers I have talked about today.

Copies of the Microsoft PowerPoint slides for this presentation have kindly been made available from Fred Newell’s site, at www.loyalty.vg

Copyright © Brian Woolf

Brian Woolf is a global leader in loyalty marketing. In addition to writing three definitive works on the subject, “Measured Marketing: A Tool to Shape Food Store Strategy,” “Customer Specific Marketing,” and “Loyalty Marketing: The Second Act,” he spends his time helping retailers develop and strengthen their loyalty programs. For more information about Brian and his books, visit www.brigantinemedia.com.

Plus, it is tons of fun to watch.

The summary of the plot may sound silly, but is carried off so deftly that it shouldn’t stop anyone. It tells the story of aged Carl Fredrickson who sets out to fulfill his deceased wife’s long-time fantasy of living beside a waterfall in South America. What makes it such an absurd idea is that Carl seeks to carry this out by attaching thousands of helium balloons to his aging house in order to fly it to the waterfall. Obviously, it’s a feat that can only be done in the fantasy of animation.

Likewise, the magic of animation allows us to see what happens when dogs are given the power of speech through a strange and wonderful invention. Once allowed to participate in the dialogue without losing any of their canine lust for chasing tennis balls or squirrels, the dogs steal scene after scene with comic delight.

But the notion of an old dog learning new tricks has nothing to do with the dogs themselves. That falls to our main character, Carl.

We first meet Carl as a small boy who himself is just meeting the intrepid young Ellie. In a film montage as uplifting and touching as any you will ever see, we watch Carl and Ellie marry, start their life together, suffer the challenges of the years, and age gracefully and lovingly. When Ellie dies, we feel for Carl’s loss in ways we don’t always feel for human movie characters.

And our business lesson soon follows. Carl thinks Ellie’s death is the end of his life too. He thinks his path is set and deviation is impossible. His plan is to reach the waterfall Ellie dreamed of and die. But along the way, Carl gets challenged.

Russell, the erstwhile “Wilderness Boy” who gets dragged into the journey, and Dug, the simplistic talking dog that takes a shine to Carl, draw the old man into an entirely new adventure. Like so many of us, Carl resists with every fiber of his being. He knows who he is and he knows for certain that his life is at an end.

But Russell and Dug won’t hear of it. Together they urge Carl back into the game of life, to change his course and to seize a new opportunity. And supported by a not-so-gentle push left by Ellie before her passing, Carl opens up to the prospect that life isn’t done.

The parallel for business people is so clear. Too often we all become locked into the path we’re on, thinking somehow we’ve become too old or experienced to deviate from our course. We press on, never knowing what paths we might be missing along the way.

One would think that legendary examples of late-in-life success would inspire so many. Colonel Sanders didn’t launch KFC until late in his life. Sam Walton began Walmart at an age when others were planning for retirement. And Warren Buffett charges onward and upward well past the age when many of his schoolmates have retired or passed away. More simpler still, think of all the retirees in Florida and Arizona communicating with their grandchildren by e-mail or Facebook.

Worse yet, there are people far younger than these men who have fallen into the same trap. They become resistant to change and in essence make themselves old before their time.

In real life, we rarely get a push to reinvent ourselves with such obvious force as Carl gets in Up. We’re certainly not prodded on by talking dogs or flying houses, although to deny the possibility that both could happen would be closing my eyes to the world of what could be. We can all learn as we watch Carl. We can all question how we would proceed and if we would be willing to start again, and in the process, cast aside long-held goals and move on to new and different opportunities.

So, yes, enjoy the incredible story telling of Disney/Pixar in Up. Enjoy the wonderful animation and the kooky characters. But mostly, watch Carl learn that old dogs are constantly learning new tricks and that risks are for the taking. And ask yourself if you could do the very same.

The answer is probably “yes.”

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Michael Sansolo is the co-author, with “Content Guy” Kevin Coupe, of the new book, “The Big Picture: Essential Business Lessons From The Movies,” available by clicking here .

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .

I started a Bagel company back in 1988, which I operated until I sold my stores in 2003 and my commissary in 2004. At my original store, we used to have a woman that came in almost every day for her bagel and coffee. When I wasn’t around, she apparently always found an issue to get ugly about with someone from my staff. It got to the point where they would see her coming, and the staff would disappear to the kitchen area, as no one wanted to help her. As an owner, of course we want to make new customers, and keep the ones we have. However, I also learned early in my career as an owner (I was 28 when I opened my first store) that you need to take care of your employees, and they in turn will treat your business as if it’s their own.

I decided to call an older friend who owned a café up the street to seek advice on how to handle this unruly “customer”. When I told her about what had been transpiring, she said, oh, I know who you are talking about. I said YOU DO??!! She said, yes and she is here right now. She told me she likes to be bitchy to your staff, and kind of laughs about it! I was pretty upset after hearing this. So, the very next morning when this woman came in, I pulled her aside and quietly told her that her behavior towards my staff was unacceptable. I said I appreciated the fact that she came in almost every day and chose to spend her money at my establishment. I also told her that if she ever had an issue with any of our products or with any of my staff, that she should come to me directly and if I was at another store, she should call me. And then I told her if she was ever abusive with anyone on my staff again, she would no longer be welcome at any of my stores. These are mostly young people who try very hard, and for the most part care about what they are doing.

Well, we did not see her at our store for more than a couple of weeks. But when she did come back, she was quiet, and ALMOST pleasant with my staff. She stopped being rude, and we never again had an issue with her. Best of all, it made a HUGE impression on my staff that I would have their backs, and risk losing a customer, and perhaps have her tell others not to come to my stores.

Good lesson for me, and for my employees. Many of the best ideas came from my staff. Treat them well, listen to them, and give them the tools and authority to do what is right. And,… if necessary, fire a customer!

Excellent point.

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“Content Guy” Kevin Coupe is the co-author, with Michael Sansolo, of the new book, “The Big Picture: Essential Business Lessons From The Movies,” available by clicking here .

Also be sure to check out Kevin Coupe’s website at www.morningnewsbeat.com.

By Neil Raphel

Raphel Marketing

June 29, 2002

Brian Woolf is one of the world’s leading experts in loyalty marketing. In addition to writing three definitive works on the subject, “Measured Marketing: A Tool to Shape Food Store Strategy”, “Customer Specific Marketing”, and “Loyalty Marketing: The Second Act”, he spends his time helping retailers develop and strengthen their loyalty programmes. In this interview with Neil Raphel, Brian talks about the evolution of loyalty marketing in the supermarket industry…

Q. Are we getting to the point where there is customer fatigue with loyalty marketing programmes? Do you think customers are getting confused or fed up with these programmes?

A. I think it depends upon the programme. My assessment is that people have accepted that you need a loyalty card for most places you shop at today, not just food retailing. For example, when you go to Blockbuster or when you go to General Nutrition Centers or when you go to hotels and airlines, they all have loyalty cards. But there is a real problem in what l call the “information paradox.” We want to gather a huge amount of information on customers but when we do that we only market to the top 30%. That means the bottom 70% aren’t being marketed to, because effectively you can’t afford to. Those are the people who are most likely to get bored or disappointed because they say, “Hey, the store has all this information on me but they never communicate with me.” l think one of the biggest challenges retailers have today is handling the bottom 70% of customers who have joined programmes but do not receive marketing offers.

Q. What is the benchmark for capturing card information to have a good loyalty marketing programme?

A. The normal threshold to have a world-class loyalty programme today is that you are capturing 80% of sales on the card. The best in the world are capturing over 90% of their sales on the card.

Q. Doesn’t that fly in the face of some of the things you talk about in your new book such as just tracking the sales of the top 30% of your customers?

A. We needed to capture a high percentage of sales to understand the customer. But now that we understand our customer the question is, “Do we need to get all that information?” Even if you capture 80% to 90% of sales, you are still only marketing to the top 30% of your customers. So if there were a way to identify the top 30% through some opt-in process like a membership fee or some qualification programme and market only to those people l think you would be better off. But you would lose a lot of your data.

Q. Are there examples in other industries that just go after the top 30% of their customers and charge a fee for their programme?

A. Yes, it’s very common in the hotel industry. A number of hotels charge an entry fee for a card to weed out the incidental customer. Here is a retail example: You can’t be a member of Niemann Marcus’s Inner Circle unless you spend $3,000 a year with Niemann Marcus. Now you can apply to join and it will cost you $50 to join, but even then you don’t get the same benefits. You receive some comparable benefits. So precedents for charging to join loyalty marketing programmes have already been made in other industries.

Q. Aren’t those industries different because there isn’t as much differential in households in food buying compared to purchases of airline tickets or expensive clothing?

A. I think there is a lot of diversity in food buying and a lot of splitting of food buying. Larry’s Markets in Seattle, Washington already has a $40 membership fee for their card. They basically have said, “We’re going to market to our best customers because they provide a large portion of our sales.” We know that in a typical supermarket chain, 10% of the customers provide abut 40% of the sales and 20% of the customers give you 60% of sales and 30% give you 75% of sales. lf you just focus on that group, you really have the bulk of your purchases right there, and that’s what you should be focusing on.

Q. One of the selling points for loyalty programs has been that you can get rid of a lot of your mass marketing, such as newspaper ads and television advertising, when you start a loyalty programme. Is that effective now that many stores have cards? Don’t you still have to invest in mass marketing or risk losing customers to your competitors?

A. I don’t think there is one answer that fits all. Whether you can cut back on advertising depends upon your promotional strategy and also depends upon your level of differentiation. The more differentiated you are as a retailer, the more you can afford to drop your advertising. For example, Dorothy Lane was able to drop their advertising three months after they started their loyalty programme. Superquinn has dropped their newspaper advertising and Ukrops has cut their newspaper advertising in half. Conversely, Big Y, which is a highly successful food retailer, is also highly promotional and they have maintained their 8-10 page spread every week with highly promotional merchandise on their card, with a limit of five items at the promotional prices. My point is that it really depends upon your strategy. A store which is not clearly differentiated would be making a mistake if they dropped their advertising.

Q. When you look at current loyalty programmes, are most of them two-tier programmes, giving benefits to cardholders and no benefits to people without a card?

A. In the U.S., the two-tier pricing is the norm for a loyalty card programme, because that’s the cheapest way you can gather information. In fact, you normally make money out of doing it. You normally increase your gross margin with a two- tier programme became not everyone uses their card. My experience is that a food retailer increases its gross margin typically by 0.5% simply because a number of customers don’t use a card. That pays for the programme. That’s stage one. Stage two is how the retailer uses the information they are getting for free.

Q. Wal-Mart is becoming a much bigger factor in the supermarket industry. They offer everyday low prices. Does Wal-Mart need a card programme?

A. Keep in mind that the purpose of a card programme is information. My understanding is that Wal-Mart discount department stores and supercenters are approaching the information angle from two ways: First, they do a huge amount of basket analysis. Second, they bought a bank and they are trying to get into banking in a big way. I suspect they are trying to get the information through the Wal-Mart credit card. Also, Wal-Mart owns Sam’s Wholesale Club and Sam’s are using customer information quite effectively. I suspect that Wal-Mart will find a way to get customer information and use it effectively over time.

Q. In your new book you talk about how many new customers stop coming back to a supermarket within a year or even within a few months. Yet don’t stores need new customers to survive?

A. In my research over the last eight years l find that even those retailers who have eliminated newspaper advertising are getting approximately the same inflow of new customers as those who advertise. The rule of thumb in the supermarket industry is that every week you get 30 new customers per every 10,000 customers you have on your database. You are already getting an inflow. The big challenge retailers have is holding those customers, because we find, and I see this all around the world, retailers losing anywhere between 40 to 60 percent of their new customers within three months. That’s the big problem. We’re getting them in. We’re just not keeping them. That’s one of the big benefits of a loyalty card because now we can quantify what the losses are, we can introduce programmes to start stemming the losses and then we can measure our success. Without a loyalty card, we have no clue as to that ebb and flow of new customers.

Q. What do you see as new services being offered in loyalty programmes? You mentioned banking at Tesco and Superquinn. Are banking programmes going to be a significant feature in the US?

A. I think it’s a natural development from customer information. For example, at Boots in England (the United Kingdom’s leading health and beauty aid retailer) they’ve introduced travel insurance because they found a lot of their customers are buying suntan products to go on vacations to the Mediterranean.

At Tesco, the cost of acquiring a banking customer is significantly less than half the cost it is for a bank to acquire a customer because Tesco knows the customer’s shopping profile. They have a much clearer appreciation of who might be inclined to be a banking customer. Tesco is probably the world’s leader today in using customer information to go into other businesses.

For example, they’ve gone into home delivery and they have used the customer’s shopping in the store as the opening screen when the customer goes to the website. Instead of having the 20,000 SKUs in alphabetical sequence, they go into the customer’s purchases in the last three months in a regular Tesco store and those items come up on the screen first.

They have also bought a 55% interest in a company called Dunnhumby who do the analysis for Tesco and now they are making a business of selling Tesco information to manufacturers. Manufacturers can go in and study any part of Tesco’s data for a price. This will improve the manufacturer’s marketing, which in turn will improve Tesco.

Q. What would be the big advantage for the use of smart cards?

A. The biggest advantage of a smart card would be the promotional flexibility. A smart card does cost more than a bar-coded card. Let me give you an example of what Esso, the gas chain, is doing both in the Netherlands and in Ireland. Every time you make a purchase of more than six gallons, if you make the next purchase within four days you get double points. If you make the next purchase within eight days, you get 150% of your points.

A food retailer could say if you spend $35 on a transaction and your next transaction is within seven days, we will give you additional points or additional discounts or some other benefit. We know through our research that frequency is the primary driver of sales. A smart card can do that because it stores the date of the last time a customer shopped and how much she spent. Another thing you can do with a smart card in a similar sort of programme is that you can make rewards to customers a function of their recency, their frequency and how much they are spending. All this information is carried around by the customer on their smart card. So you can have different offers to customers in the store at a store’s kiosk and the customer can receive unique offers to her when she puts her card into the kiosk.

Q. So that would be true one-to-one marketing.

A. It is. It’s very individualised. You can lock into a smart card the customer’s promotional responsiveness, their ethnicity, basic demographic data. All that can be built into the promotional offer when the customer puts the card into the kiosk.

More info: Raphel Marketing is online at www.raphel.com

Copyright © Raphel Marketing

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Brian Woolf is a global leader in loyalty marketing. In addition to writing three definitive works on the subject, “Measured Marketing: A Tool to Shape Food Store Strategy,” “Customer Specific Marketing,” and “Loyalty Marketing: The Second Act,” he spends his time helping retailers develop and strengthen their loyalty programs. For more information about Brian and his books, visit www.brigantinemedia.com.

A major telephone company had its operators call customers for new marketing services. Half the salespeople were told to smile while giving the selling message over the phone. Half did not. A subsequent survey asked the same customers if they knew if the operator was or was not smiling when talking. More than 80 percent of the customers knew if the person calling was smiling.

Feargal Quinn’s Hiring Rule: The owner of Ireland’s wellknown supermarket chain told me how he makes a decision whether or not to hire someone during the job interview.

“I count the number of times they smile. If it’s enough, they’re hired.”

As my mother said, “You don’t get a second chance to make a good first impression.”

Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

When I first became completely involved in loyalty marketing back in the early 1990s, I was privileged to be part of a global Best Practices Loyalty Share Group. Apart from the US, it comprised companies from Australia, Ireland, and Belgium, and added to later by companies from Spain and Sweden. Apart from the US, probably not what you’d call “the usual suspects.” What made this group unique was that they were all doing special things over and above what other loyalty companies were doing. The magic was in their management’s commitment to their customers and to their loyalty program, the vehicle they used to help measure and enhance that relationship.I learned that excellence in loyalty marketing isn’t the specialty of any one country; it’s the mark of committed companies that scatter the whole globe. You’ll find stars everywhere. I think of Japan, for example. Most retailers there have a point-based program—but only a few loyalty programs truly stand out. One, for example, is A-Coop, a single-store operator that replaced their traditional 3-times-a-week grocery ad with quintuple bonus points on three days a month (5th, 15th, and 25th). This key differentiating action, along with many supporting actions, has propelled A-Coop to high, customer-centric prosperity over the past decade. Incidentally, it also demonstrates that a single store can have its own loyalty program and shine.

Recently, I visited India for the first time in many years and was delighted to find that my belief held true. I discovered yet another loyalty star. Shopper’s Stop is a world class department store chain with a highly-energized top management team who benchmark themselves against the best retailers on every continent. When we arrived at their headquarters we had to wait—all associates were standing singing their corporate anthem (a daily event). Talk about achieving goal congruence in a business! The business card of Govind Shrikhande, their energetic, articulate, and charismatic top officer reads: Customer Care Associate & Chief Executive Officer. That sequence surely sets priorities! Customers do come first, without question, at Shopper’s Stop. No surprise, then, that they have, in my opinion, one of the world’s best department store loyalty programs.

Following the concept that you water what you want to grow, their First Citizen loyalty program, offers a tiered reward program: the more you spend (over time), the easier it is to earn additional points. Entry-level customers (first 10,000 rupees, ie, $250) earn one point for every Rs.100 ($2.50) spent; Silver Edge customers (spend $250-$1,000) earn one point for every Rs.50 ($1.25) spent; and Golden Glow Customers (spending over $1,000), earn one point for every Rs.34 ($0.80) spent.

All First Citizen members receive regular updates on merchandise offers, special previews, etc; they have exclusive checkout counters (Gold have their own special one); and free parking (Gold have free reserved parking). In addition, Silver and Gold receive additional Reward Points on preferred store brands, along with other benefits.

But, to ensure that their customers appreciate the benefits of their First Citizen program, there is an entry fee of approx. $5; and a fee of $2.50 to replace a lost card. Not only that, customers have to maintain the threshold spending levels of their Silver or Gold cards to keep them active from year to year. Points have a defined value and can be redeemed by members against any transaction, thereby creating an internal currency. [Keep it all in the family!] First Citizen is a simple, clearly communicated and executed program that recognizes and rewards their regular customers. (If you wish to learn more, visit their website at www.shoppersstop.com).

The bottom line? Excellence is not a country “thing.” It’s a company “thing.” If your company’s loyalty program is not currently rated as excellent, wouldn’t it be wise to avoid blaming the environment and start looking a little closer to home for the steps to make it so? For excellence is everywhere (as I was reminded on my recent trip to India)—and I hope it does—or will—describe your company’s loyalty program, too.

Copyright © Brian Woolf

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Brian Woolf is a global leader in loyalty marketing. In addition to writing three definitive works on the subject, “Measured Marketing: A Tool to Shape Food Store Strategy,” “Customer Specific Marketing,” and “Loyalty Marketing: The Second Act,” he spends his time helping retailers develop and strengthen their loyalty programs. For more information about Brian and his books, visit www.brigantinemedia.com.

At her next party, the hostess introduced him to one of her guests and then, unobtrusively, remained in close proximity to hear his technique. It was very simple. After being introduced he would ask the person he just met, “Tell me about yourself…” And then just… listen.

He listened to people talk about themselves. He encouraged them to tell him about their jobs, their family, their hopes, their dreams. Where would they like to go on their next vacation? Why? For how long?

Later everyone told the hostess what a marvelous addition he was to the party.

Here’s why: People who listen seem to care more, are more open-minded and concerned. Those who continually talk come across as pompous, self-centered and narrow-minded.

Dale Carnegie, author of “How to Win Friends and Influence People,” said, “You can make more friends in two months by being interested in other people than you can in two years by trying to get other people interested in you.”

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

His answer: “It depends on which one of us dies first.”

• • •

McGraw-Hill did a survey on how many calls a salesperson had to make to a new prospect to achieve the initial sale. The answer: four.

Many salespeople give up after the first try. Or second. Or third. Rejection is difficult to accept. And then a competitor appears on the scene the fourth time and makes the sale because the first salesman did not persevere.

President Calvin Coolidge said it best:

“Nothing in the world can take the place of persistence.

Talent will not; nothing is more common than unsuccessful men with talent.

Genius will not; unrewarded genius is almost a proverb.

Education will not; the world is full of educated derelicts.

Persistence and determination alone are omnipotent.”

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

Yes, you can, and Spokane, Washington-based Tidyman’s, is doing it. Here’s how.

For the second consecutive year, Tidyman’s is offering to its regular customers items such as a dozen eggs for 9¢; bananas for 9¢ lb; a gallon of milk for 99¢; any brand of 12-pack soft drinks (eg, Coke, Pepsi) for 99¢; large Tide Detergent for $3.99; and Huggies Jumbo packs for $3.99. As any shopper immediately recognizes, these are, indeed, Crazy Prices! For example, a typical supermarket price for Huggies is $9.99; at the behemoth it’s $6.99; but the Crazy Price program offers it for only $3.99!

Is management at Tidyman’s crazy? On the contrary; they indulge in smart thinking (coincidentally, their tag-line). What CEO Mike Davis and his team realized is: (1) the purpose of their Rewards Card program is to reward and strengthen their customers’ loyalty; and (2) the behemoth doesn’t know who its customers are (no card program!) and, therefore, offers the same price to everyone who walks through its doors. A loyalty program provides powerful advantages – such as customer knowledge and the ability to differentiate – and should be leveraged to the hilt!

Davis looked at his customer numbers and saw two fundamental factors: the more his customers spend, the higher their gross profit percentage; and, the more his customers spend, the lower their defection rates. Therefore, he reasoned, it was in his company’s best interests to increase the number of higher spending customers.

One highly effective option was to reinvest some of the superior gross profit percentage of these customers in the form of Crazy Prices. In other words, allocate promotional costs according to customer contribution rather than the traditional retail approach of having higher-margin customers subsidize the lower-margin customers and cherry pickers. [Not a difficult concept for Davis, an ex-CFO.] The outcome? As expected – more frequent trips by their regular customers meaning more sales, profits, and higher customer retention rates.

So, you ask, how complicated is Tidyman’s method of getting these crazy prices just to its regular customers? Actually, it’s dead simple – they have a points-based loyalty program. Tidyman’s gives 10 greenpoints on every $1 of total spending together with bonus points on various higher-margin products (eg, avocados) around their stores. It’s obvious that regular customers who do most of their shopping at Tidyman’s readily earn a lot of points. And the most popular option customers choose in redeeming their points is on these crazily priced items.

A specified number of greenpoints is required to buy each Crazy item at its absurd price. For example, to buy bananas at 9¢ lb or Huggies at $3.99, a customer needs to redeem 500 or 900 points, respectively, out of her accumulated points balance. That’s simple with the help of Tidyman’s point partner, S&H greenpoints, who offers an on-line, real-time system that allows customers to know their up-to-the-moment point balance when checking out.

The Bottom Line

In my mind, Crazy Prices is a brilliant idea. It is such an open and honest way to reward regular customers. The more points a customer earns, the more often she can take advantage of the country’s absolute lowest prices on key items – truly Crazy Prices! Each customer decides, based on her spending behavior, how many of these Crazy Prices she wishes to take advantage of, and how often. Crazy Prices encourages and rewards customers for aggregating more of their shopping and provide a powerful reminder to customers keep coming back.

Not just that, Crazy Prices is straight out of classic Loyalty Economics 101: customers should be segmented according to what they contribute to the business and then rewarded accordingly. Consider this: if, for example, a retailer wanted to buy 1,000 cash registers for its stores, it would expect a lower price per register than if it was ordering only 10 cash registers. Why then, Loyalty Economics 101 asks, shouldn’t customers get similar proportional pricing concessions? Crazy Prices provides that. For too long, retailers offering loyalty programs have professed that their goal is to reward and strengthen their customers’ loyalty. Yet too few programs are designed to actually achieve that goal. Tidyman’s is a refreshing exception.

Crazy Prices reflects a management attitude that I call the Access Attitude. Points are used as a rationing device; they are used to give customers access to exceptional value. In today’s brutal, price-oriented world, retailers without the buying power of the behemoths must carefully ration their promotional markdowns. They can’t afford to give low, low prices to everyone – but they can, and should, give them to those customers who provide the major part of their sales and profits. Tidyman’s program demonstrates this so well. Management also applies different point values per $1 of markdown across their Crazy Price offering which means there is no fixed value per point in customers’ eyes. This flexibility allows the company to continually tweak and experiment with different types of value.

As a result of its underlying Access Attitude, Crazy Prices is a much more potent points program than the traditional one-point-per-$1 spent and we’ll take $5 off your order when you have accumulated 500 points program. Such is simply a 1% rebate program.

Excellence Comes In Threes

As an old saying goes, everything comes in threes. Excellence is no exception. Two other elements of the Tidyman’s program that I put in the outstanding category (ie, worthy of emulation by others) are their Checkout and Playing Cards programs. Let me describe them.

Checkout Program

Most retailers have their cashiers ask customers: Do you have a customer card? Tidyman’s have replaced that question with a much better one. Their cashiers ask one of two questions: Are you collecting greenpoints? or Would you like your eggs for 9 cents? (if eggs are in the order). Reminding customers of your card’s benefits is unquestionably superior to reminding them of the inconvenience of carrying yet another “loyalty” card!

Playing Cards Program

To reinforce their Rewards program and to surprise and delight their customers, Alex Plummer, the VP of Sales & Marketing at Tidyman’s, developed a deck of “playing cards”. The back of each card has the words grab more green! surrounded by points (green, of course). There are just three different face cards: Get double; triple; or quadruple points … on your order today. A manager, whenever he wishes to add fun, excitement, and value to his customers’ shopping trips, walks around his store and invites customers to “draw a card”. When checking out, the customer simply presents her grab more green! card and the points she earned on the order are appropriately and automatically multiplied.

Closing Thoughts

It’s refreshing that loyalty marketing creativity is still in a state of ferment – in all sorts of surprising places. It’s also reassuring that some retail leaders, such as Tidyman’s, are thinking through ways to use their point-based programs to truly reward and retain their regular customers. That focus, too many forget, is the fundamental basis of loyalty marketing.

It’s also a pleasure to see such creativity being recognized by the customers. Tidyman’s Rewards achieves the highest share of sales captured by a points-only retailer loyalty program that I’ve ever seen – anywhere in the world!

Copyright © Brian Woolf

Brian Woolf is a global leader in loyalty marketing. In addition to writing three definitive works on the subject, “Measured Marketing: A Tool to Shape Food Store Strategy,” “Customer Specific Marketing,” and “Loyalty Marketing: The Second Act,” he spends his time helping retailers develop and strengthen their loyalty programs. For more information about Brian and his books, visit www.brigantinemedia.com.

When Vince Lombardi, the great football coach, ever sensed that his team was losing sight of the fundamentals of the game, he would run a special basics training program which began with: This is a football!

Today, we need a similar session as we are faced with CRM, Loyalty Marketing, One To One Marketing, and other variations of the theme. The primary purpose of all of these descriptors is to get the customer to return. For most retailers, the tool that helps measure such progress and encourages customers to return is a loyalty card program.

Two questions that can be fairly asked are:

·  How can such a program help build a better relationship with customers?
·  Is it sustainable over time?

Better customer relationships are built through card-based knowledge. Information has always been more powerful—and profitable—than ignorance! The biggest challenge of traditional retailers is ignorance. They see the sales surface but are unaware of the under-currents and customer churning below. They are ignorant of their customer acquisition, conversion and defection rates. They are ignorant of the spending erosion of their best customers. In fact, they don’t know who their best customers are! (It’s not just those the manager can recognize!) The point is that it’s much easier to build a relationship with customers and to encourage them to return when you know who your customers are and you have the metrics to measure your progress.

With information, we communicate with, recognize and reward our customers. We develop retention and defection prevention programs. We develop price and reward filters to favor our best customers and reduce the losses from unprofitable customers. In my experience, not only do well-designed programs accomplish all of the above but increase company profits in their first year as well!

Given this, sustaining the inflow of customer knowledge becomes critical to the company’s success—unless, of course, a retailer isn’t interested in truly understanding his customers. In which case, he should never have introduced the program in the first place!

Copyright © 2001 Brian Woolf

Brian Woolf is a global leader in loyalty marketing. In addition to writing three definitive works on the subject, “Measured Marketing: A Tool to Shape Food Store Strategy,” “Customer Specific Marketing,” and “Loyalty Marketing: The Second Act,” he spends his time helping retailers develop and strengthen their loyalty programs. For more information about Brian and his books, visit www.brigantinemedia.com.

The premise of the piece is this:

“Throughout the ‘80s and ‘90s, Harrison Ford reigned as the unchallenged star of middle-of-the-road cinema. Almost unique in modern history, he not only created two iconic characters – Han Solo and Indiana Jones – but also managed to step away from them, into a hugely successful leading-man career in movies such as “Working Girl,” “Patriot Games,” and “The Fugitive,” to name a few. He excelled in grownup action roles, respectably above the pyrotechnic-driven thrills of Stallone and Schwarzenegger – but he was also able to charm as a romantic lead.

“As one-note as Ford’s performances were, audiences seemed never to tire of that note. Until one day, they did.”

Except for the tepid “Indiana Jones and the Kingdom of the Crystal Skull,” which garnered audiences but little respect, Ford hasn’t had a hit in a decade. His latest, “Extraordinary Measures,” out last week, looks like yet another bomb, well-meaning but uninspired. (To be honest, I have not seen it. But I feel no compulsion to run out and do so. Which is the problem.)

The story analyzes some of the problems that make it hard for Ford at this point in his career. Among them:

• A single-note actor eventually goes off-key. Let’s face it. Han Solo isn’t all that different from Indiana Jones, or from Ford’s Jack Ryan, or even from his Richard Kimble. And he probably wasn’t talented enough actor, in the end, to do wildly different projects. Eventually, the audience just gets tired of you. (The corollary to this is the “every actor has an expiration date” rule.)

• Disappointment hurts. There was hardly anyone not looking forward to “Indiana Jones and the Kingdom of the Crystal Skull,” but it speaks volumes that almost nobody is talking about a fifth movie in the series. (The corollary to this rule is, “don’t let George Lucas write your script.”) The movie just wasn’t very good, and disappointed in the way that the three Star Wars prequels did. (There’s that George Lucas rule again.)

But here’s the concluding paragraph of the piece, which brought it home for me:

“Business seminars could use the Ford implosion as a case study to show the need to remain agile and change with the times. And it is possible that when the actor passes out of this period, he could have an On Golden Pond moment, and, like Henry Fonda was then, be rewarded for his longevity. His fans yearn for that next phase to come. Because in the end, when Hollywood Homicide has long been forgotten, Han Solo and Indiana Jones will live on, along with “Blade Runner” and “The Fugitive.” He leaves us with the Harrison Ford we once loved moderately intact.

“Which these days in a celebrity, is far more than we’ve come to expect.”

Let’s rerun that phrase one more time, for good measure:

Business seminars could use the Ford implosion as a case study to show the need to remain agile and change with the times.

Whether you are an actor, a CPG company or a retailer, it is critical to continue to innovate, to play different notes, to move forward in terms of both vision and execution.

Or the curtain will inevitably fall.

After watching the announcement of the new iPad this week by Steve Jobs, Mrs. Content Guy asked me if I planned on getting one.

My response: “I just can’t imagine why I’d want one.”

But I quickly amended that statement, to: “Actually, I just can’t imagine why I’d need one right now. But I know I want one. A lot.”

That’s the real genius of Jobs and Apple. They make products so innovative that even if we don’t need them, we want them.

Immediately.

“Content Guy” Kevin Coupe is the co-author, with Michael Sansolo, of the new book, “The Big Picture: Essential Business Lessons From The Movies,” available by clicking here .

Also be sure to check out Kevin Coupe’s website at www.morningnewsbeat.com.

The basic plot of the movie is that Murray, an obnoxious and vain Pittsburgh weather man, gets perpetually stuck in Punxsutawney, PA, and daily relives the celebration of America’s best known rodent. But the metaphor is more important. Murray’s character is stuck in his nasty habits and simply never progresses. It isn’t until he tries to change, to learn and to grow that he escapes Groundhog Day.

There’s another way of saying it much more bluntly: Insanity is doing the same thing over and over again and expecting different outcomes. In the best of times that’s an awful strategy. In days like these it’s beyond tolerable for any business.

Against that background, three speeches from last week’s FMI Midwinter Executive Conference bear consideration well beyond the folks who heard it live.

First, let’s visit the Coca-Cola Retailing Research Project. The topic – winning back meal time – has been discussed for decades in this industry and probably many of you wondered why it was raised again. The problem is that minus a few exceptions the industry is stuck in the same place, losing sales and meal occasions to restaurants.

Against that backdrop, this becomes a study you have to read to understand the special opportunities presented by the current economic conditions and the perils looming in the nation’s shifting demographics. The suggestions in the study might help you avoid waking up in the same place again and again. (Visit http://www.ccrrc.org and click on “Eating In.”)

Likewise, many of the topics covered by IRI’s Thom Blishock have been discussed at length before, but also aren’t near completion. It’s easy to argue that the push toward frugality will end as soon as the economy turns around and that shoppers who have spent years enjoying an ever-expanding universe of products choice will never tolerate a reduction. However, if the trends toward frugality and simplicity are for real they play right into the strengths of operators like Trader Joe’s, Aldi and Costco. It’s not like the industry hasn’t seen tectonic shifts in shopping habits before in the wake of economic struggles. Why relive Groundhog Day again?

Lastly, consider the lessons from political strategist David Plouffe no matter how you feel about his best-known client, President Obama. His point was very simple again: focus on your inner circle to build advocates for your business.

Here too is a lesson that we’d think everyone would know. Engaged employees form the foundation for great sales. They become advocates with everyone they touch. Yet too often, especially in tough times, employees’ needs are downplayed, their enthusiasm wanes and problems ensue. And after them there is no one more valuable than a loyal customer, yet how often are product deals and specials are geared at new customers, ignoring and possibly insulting long-time loyalists? As Plouffe said, focus on the base and build from there. It works in politics and it can work for you.

The bottom line is you need to watch “Groundhog Day.” You need to ask yourself how often you are like Murray’s character, repeating the same day and the same mistakes over and over again and wondering what it takes to end this nightmare. Ask yourself how you could change and grow so that each day takes on great value, meaning and purpose.

And whether or not you see your shadow, get out of that hole.

Michael Sansolo is the co-author, with “Content Guy” Kevin Coupe, of the new book, “The Big Picture: Essential Business Lessons From The Movies,” available by clicking here .

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .

“But here’s the catch: I had never received the bill that they said I didn’t pay. And the reason I knew it was a trick was that this was the second time they did this. A couple of months earlier, after I had made a different purchase at Brooks Brothers, they also did not send me a bill until it was already overdue, adding a big fee to the balance. That time I paid it. This time I got mad.

“The credit card company for Brooks Brothers is GE Money Bank (sometimes you’ll see it on your bill as “GEMB”).  If you Google it, you’ll find many discussion boards where people are ranting about their problems with this credit company – all worse than mine.

“I called GEMB, which took several tries through an automated system to finally talk to a live person. She told me she couldn’t help and referred me to Brooks Brothers’ customer service number. Once I got that person on the phone, I let her have my full wrath. She finally removed all the charges and at my request cancelled the card.

“I’ve since discovered that my new JC Penney card was also through GEMB. They did the exact same thing – sent me my first bill saying I had already missed a payment. Like a dope, I paid that late charge, too. But once I saw this happen with my Brooks Brothers card, I got wise and cancelled the JC Penney account, too.

“So now I have resolved not to shop at JC Penney (no big sacrifice for me, but they are one of the few retailers near my very remote location) or Brooks Brothers, which is much sadder because my husband and son love their no-iron shirts. But I’ll find a similar product elsewhere, I’m sure.

“I called Brooks Brothers’ customer service to report my dissatisfaction with GEMB, but the representative seemed totally unconcerned. She would not let me talk to a supervisor and was dismissive.”

THE CUSTOMER SERVICE LESSON: Companies need to understand that everything done in their name reflects on the company, and you need to know how your customers are treated in all encounters. Whether it’s with floor salespeople, an Internet order taker, or your store credit card company, every transaction relating to your company reflects on you. Neglect any part of that long enough and you lose customers.

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Don Gallegos is the author of “Win the Customer, Not the Argument.” His customer service philosophy is, “The customer is not always right, but she is always your customer.” For more information about Don’s book, visit www.brigantinemedia.com.

Click here to read an excerpt from Don’s book.

One of the biggest mistakes still being made by companies contemplating a loyalty program is that they consider it a clip-on – a fifth wheel – rather than an integral part of the business. The primary benefit of a loyalty card program, for many companies, is gathering customer information that is then used throughout the business to improve corporate results. It is not just a targeted mailing tool.

A crucial – yet usually overlooked – question that management should ask when considering a loyalty card program is: How can we use customer information to help us achieve our strategic goals?

Asking that question is one of the seven essential steps required in setting up and running a successful loyalty program. These steps are drawn from my observation of the leading loyalty programs around the world. Why don’t you take a few minutes and see how many of the Seven Steps your company practices? Then, either pat yourself on the back or start effecting some change.

Seven Steps to Build Your Sales and Profits

1. Company Goals: Spell out what your company’s 3-year goals are for customers, sales, and profits. (They are all inter-related!)
2. Customer Information: Set out all the ways you can think of how customer information, if used effectively throughout the business, could help in the achievement of these three company goals. Examples might include: identifying your customers’ behavior so you can set up a recording system to measure their loyalty; increase the number of higher spending customers per outlet through a program of targeted offers, rewards and recognition; improve customer retention rates by establishing tripwires that trigger appropriate targeted actions; and reducing advertising costs by overlaying advertising distribution over a plot-map of where your Best Customers live and eliminating the wasted advertising.
3. Loyalty Program: Decide whether you want to capture the customer behavior of most of your customers or just of your higher spenders. Then introduce an appropriate low-cost loyalty program that gathers such data, keeping in mind that the best programs are simple and flexible.
4. Action: From the data gathered, understand your customers and their behavior. For example, how often they visit, how much they spend on each visit, how much each has spent in the last six months, and how distance (from their preferred outlet) affects the previous three results. Then apply these customer insights to set up programs aimed at achieving your corporate goals (as spelt out above).
5. Rewards: Ensure complete employee commitment (from top to bottom of the organization) by establishing recognition and rewards for the accomplishments of these new customer goals.
6. Review and Improve: Review the results of these new customer-oriented programs and think how your results can be improved even further by deciding which programs should be jettisoned and which should be refined and improved. Act upon this review. Keep repeating this process.
7. Benchmark: After your program has settled down (after 1-2 years), benchmark your results with the world’s best programs, both in your industry and in others. Learn from them, adapt others’ best ideas to your situation, and move your company to a higher level. Repeat continually.

Copyright © 2002 Brian Woolf (www.brianwoolf.com)

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Brian Woolf is a global leader in loyalty marketing. In addition to writing three definitive works on the subject, “Measured Marketing: A Tool to Shape Food Store Strategy,” “Customer Specific Marketing,” and “Loyalty Marketing: The Second Act,” he spends his time helping retailers develop and strengthen their loyalty programs. For more information about Brian and his books, visit www.brigantinemedia.com.

Janice (my wife) was stunned. “Why do they even bother? Do you even remember the last time you used the Yellow Pages?”

I had to admit she was right. I have nothing against the companies that produce the Yellow Pages or all its competitors, but why exactly do they still produce it in the day and age of Google? It reminded me immediately of a scene from “Ocean’s 13,” and I promise this isn’t a gratuitous way to reference the new book Kevin and I have co-authored: “The Big Picture: Essential Business Lessons from the Movies.”

In the scene, master thieves Danny and Rusty (played so wonderfully by George Clooney and Brad Pitt, respectively) admit they are stumped. They have countless ideas to beat the new security device at the hotel they hope to rob, but their British consultant Roman Nagel (Eddie Izzard) keeps explaining why none of their ideas will work. In short, they just don’t get it because, as Nagel says, their thinking is antiquated.

“Basically, you are analog thieves in a digital age.” (Of course, this being the movies, the gang figures out a way to beat the amazing digital security device named the Greco by its inventor of the same name.)

Analog in a digital age. I can freely admit that there are times I am an analog guy in a digital age. For instance, while I own and frequently wear a digital watch, I know I’m much quicker at picking up the time by simply looking at a watch face. And I still find it off-putting somehow that my car tells me my speed in a digital read out, which allows my wife or kids to tell me with specificity just how much I am over the speed limit. Somehow, the old dial seemed friendlier.

But in business, we can’t afford to be analog people in a digital age. Again, I know nothing about phone books, but I have to believe that if Yellow Pages wants to defend its franchise they had better figure out a way to deliver the information to my computer in a format that somehow blows Google away. Use geography, use creative search terms or use something, but don’t drop a seven pound book on my doorstep. (And, as my wife pointed out, the only people who might actually use the book can hardly read it anyhow because the type is always too small!)

Retail must do the same. I find it fascinating that people who look up my book on Amazon are also visiting What Would Keith Richards Do?: Daily Affirmations from a Rock and Roll Survivor. But that’s how Amazon creates creative sales and positive linking of shoppers to information. How can brick and mortar retailers do the same?

More importantly, how can brick and mortar retailers afford not to?

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Michael Sansolo is the co-author, with “Content Guy” Kevin Coupe, of the new book, “The Big Picture: Essential Business Lessons From The Movies,” available by clicking here .

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .

“That’s the way we’ve always done it!”

You know you have heard the phrase and it is possible that you have even said it. The cumulative impact of the phrase is a non-stop assault on creativity, innovation, and rule breaking – the very activities virtually every company should encourage.

There is a cure for this unbridled corporate conservatism in the form of the delightful movie “Babe.” Every time the phrase “That’s the way we’ve always done it!” is uttered, force that person to watch “Babe.” In fact, watch it yourself. It’s worth it.

On the surface, “Babe” appears to be a child’s movie. It isn’t, although it is great for children, too. It’s the story of a pig, Babe, who is the runt of the litter destined for the slaughterhouse. Babe is saved from this fate when he is given to a local fair to be handed out as a prize, which is won by taciturn farmer Arthur Hoggett, wonderfully played by James Cromwell.

Once at Hoggett’s farm, Babe does something unusual: he stops behaving like a pig, for the simple reason that he doesn’t know he’s a pig. He consorts with all manner of animals like Ma the old sheep, Ferdinand the duck, and the litter of sheepdogs living in the barn. With his polite manners and naïve ways, Babe becomes a friend to all the animals, many of whom do not get along and clearly do not respect each other. (Hmmm, sounds more like an office with each passing moment.)

Farmer Hoggett begins to notice Babe’s social abilities when Babe divides all the chickens in the yard into groups of similar colors. Soon, Farmer Hoggett gives Babe a chance to show his stuff at the most important animal job on the farm, herding the sheep.

That’s where Babe the pig and “Babe” the movie shine. By breaking all the rules – “the way things are,” as the animals remind him – Babe becomes an outstanding herder. Although the dogs consider the sheep too dumb to understand anything other than a nasty approach and the sheep consider the dogs too stupid to talk with, Babe bridges the divide with friendship and manners. Slowly but surely, even the most reluctant animals begin to understand the wisdom of Babe.

“Babe” is a simple story, but it contains an important lesson. Think of how many businesses have stuck to the way things always are and completely missed the opportunity to become something entirely new, bigger, and better. Some have taken those opportunities:

• MTV didn’t invent video or records, but pulled them together into an entirely new cable channel. CBS, in contrast, owned a television network and a record company, but missed the chance.

• Google wasn’t the first company to offer a search engine for the Internet, but its speed and efficiency helped create a cyberspace dynamo that dwarfs AltaVista, Yahoo, or even Microsoft.

MTV and Google all had their “Babe” moments. They ignored “the way things are always done” and built astounding success by identifying possibilities and filling them with a value proposition that viewers, listeners, and shoppers learned to love.

“Babe” connects on many levels. The parallel of animal and human behavior has been shown often in the movies, from Charlotte’s Web to Animal Farm. But “Babe” delivered a winning story told in a creative style and with a lesson that could stand the test of time. In fact, the movie was nominated for the Academy Award for Best Picture, an uncommon honor for a “children’s” movie.

Be on the lookout for those seven deadly words of business, those seven words that limit your horizons and suck the creativity and spirit out of your people. When someone says, “That’s the way we’ve always done it!” launch a counter-attack with the story of a pig that refused to accept things the way they were.

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .

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Michael Sansolo is the co-author, with “Content Guy” Kevin Coupe, of the new book, “The Big Picture: Essential Business Lessons From The Movies,” available by clicking here .

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .

“Jaws” is one of the best thrillers ever made, but it also serves up an example of business behavior that is egregiously bad and almost inevitably fatal: denial.

“I don’t think either one of you are aware of our problems,” Mayor Vaughn (Murray Hamilton) says to Chief of Police Martin Brody (Roy Scheider) and Matt Hooper (Richard Dreyfuss) at one point in the movie. “I’m only trying to say that Amity is a summer town. We need summer dollars. Now, if the people can’t swim here, they’ll be glad to swim at the beaches of Cape Cod, the Hamptons, Long Island…”

Sure, Amity needed summer dollars. But what Vaughn ignored was the fact that the town also needed tourists that weren’t worried about being torn limb from limb.

Vaughn’s reluctance to close the beach is an example of the type of short-term thinking that should be avoided in the business world. Vaughn is working under the premise that if the town of Amity closes the beaches because of concerns about shark attacks, it will scare away the tourists on which the town depends. Which is true. But Vaughn ignores the cold reality that if tourists find out that there is a shark in the water and the town allowed people to go swimming, not only will they stay away in droves, they’ll also lose trust in the town’s management and never come back.

Businesses have to engender trust in their customers. Violate that sense of trust by ignoring the obvious facts – or even just the likely trends – and the repercussions can be both serious and long lasting.

Mayor Vaughn obviously never learned from the management at Johnson & Johnson, who, when faced with evidence that Tylenol had been tampered with in 1982, immediately pulled the product off the shelves. The Tylenol executives figured that they could survive the short-term hit, but would never survive the backlash if they denied the seriousness of the problem. When a new tamper-proof version of Tylenol came back to store shelves, there remained a sense of trust on the part of the consumers because Johnson & Johnson played it straight.

To be fair, although Mayor Vaughn generally is painted as the bad guy in Jaws because he ignores the sharp-toothed reality swimming just off shore, almost everybody is in some sort of denial. While this denial drives the plot forward, it also offers a primer on how to not deal with serious or even not-so-serious business situations.

Think about it. Quint, the great shark hunter played to crusty perfection by Robert Shaw, continues to chase the enormous great white shark with a small boat and just two crewmen. That’s world-class denial.

Hooper, the oceanic expert with a passion for sharks, shows a sense of denial several times when he gets into the water with the shark. Sure, he’s getting into an anti-shark cage, but the evidence is pretty strong that it isn’t going to be nearly “anti” enough.

About the only main character who doesn’t seem to be in denial is Chief Brody, and even he has a moment of self-delusion when he’s asked why, if he is scared of the water, he lives on an island. “It’s only an island when you look at it from the water,” he says.

Yeah, right.

But it also is Brody who has the movie’s primal moment of clarity. It’s when he’s shoveling bait into the water and gets his first close-up look at the shark’s massive body, black eyes, and very, very sharp teeth.

“I think we’re going to need a bigger boat,” he says.

Truer words never have been spoken.

In business, as in “Jaws,” denial can get you eaten for lunch.

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“Content Guy” Kevin Coupe is the co-author, with Michael Sansolo, of the new book, “The Big Picture: Essential Business Lessons From The Movies,” available by clicking here .

Also be sure to check out Kevin Coupe’s website at www.morningnewsbeat.com.

Macy’s has guts – they give you 180 days to return and then charge a 10% restocking fee on furniture and mattresses? Now, knowing that, would you buy from them?

Sears has a 15% restocking fee on electronics with missing items. How stupid.

At least Target “gets it” – no receipt needed up to 90 days.

Pottery Barn will only give you a merchandise credit if you don’t have the receipt. They also won’t accept returns on final sale items which are identified by a price which ends in .97. My goodness, who thinks up all this garbage? Obviously, they are people who don’t understand superior service. The president of every company ought to look into these return policies. A difficult return policy lets a clerk tell the customer “No.” Shouldn’t a store try to tell a customer, “Yes.”

Do you know there are companies that charge you a fee if you come into the store to pay your bill – Cricket cell phone company does that. Imagine, making you pay a fee for trying to pay your bill at the store instead of mailing a check. What horrible service!

Here is another beauty on how to systematically go out of business. It happened at Blockbuster, you remember them don’t you? I couldn’t rent a movie at Blockbuster without talking with surely employees

Then along came netflix – truly a great customer service company – no late charges, movies mailed on time, etc.

Blockbuster, in their infinite wisdom, decided to spend millions of dollars telling everyone no more late fees. Signs at the stores trumpeted the end of late fees.

A couple of problems with the new policy: First you needed your credit card to rent a movie, and, second, if you brought the movie back after 7 days you were billed the full price of the movies. But if you balked and wanted a refund, they gave it to you, but charged you a re-stocking fee of $1.25.

A lawsuit was filed in 47 states and Blockbuster finally agreed to give back $630,000 to customers who complained. Blockbuster also agreed to have their signs in the store clearly state what they meant by “the end of late fees.” In other words they lied. What moron thought up this marketing plan?

Now Blockbuster is closing a large percentage of their 4,600 stores. They earned it.

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Don Gallegos is the author of “Win the Customer, Not the Argument.” His customer service philosophy is, “The customer is not always right, but she is always your customer.” For more information about Don’s book, visit www.brigantinemedia.com.

Click here to read an excerpt from Don’s book.

Today a powerful fourth way, Access Pricing, is making its appearance. Its unique feature is to significantly differentiate prices on basic items between regular customers and occasional shoppers in an open, transparent way. We are all used to paying full price (and sometimes more!) for convenience at convenience stores, sports stadiums, etc. In retailing, it has been very difficult to offer convenience pricing alongside lower prices for regular customers within the same store. But technology and a points-based loyalty card program now make it possible. An excellent example of how it works in practice can be seen at Spokane, WA-based Tidyman’s. (See the article “Crazy Prices.”)

Here’s a recap of the Tidyman’s Crazy Prices program. Each customer receives 10 points for every dollar spent, plus bonus points on selected offers around the store. These points are the currency for customers to gain access to year-long crazy prices on a range of key items, eg, Huggies at $3.99 (along with 900 points) vs $9.99, the regular supermarket price, and $6.99 in a Big Box Discount store. This pricing strategy is called Access Pricing because it provides customers access to the undisputed lowest prices in the marketplace on selected items – all year long.

In the PUF (Warehouse Club) model, a customer gains entry to the warehouse’s offering by paying an up-front, annual fee. In Access Pricing, a customer gains access to low, crazy prices according to her total spending at the retailer and on the number of items with bonus points that she buys. In other words, she determines, with her shopping behavior, how many ultra-low priced items she wants throughout the year.

Why is Access Pricing a powerful new path for pricing strategists?

1. It gives companies who compete against Big Box discounters an opportunity to successfully neutralize or minimize its price gap perception. It’s all very well to offer better quality and service than the Big Boxes but, if the price gap (real and perceived) keeps getting wider, your “better benefits” mantra rings hollow. Access Pricing, in its various forms, gives your regular customers distinct, real, tangible, and memorable value which, in turn, changes the price gap perception between you and the Big Box.
2. It puts golden handcuffs on your best customers and provides an attractive incentive to your lower spending customers to aggregate their spending with you. Currently, most retail and service companies do not provide an in-your-face incentive for customers to stop cherry-picking for specials or fragmenting their shopping in other ways. Access Pricing does.
3. It provides rewards based upon your customer spending, with a skewed bias in favor of regular customers as opposed to the convenience shoppers. This is done by giving disproportionate value to the heavier spenders, those who provide the bulk of your profits. How so? Consider a typical HI-LO food retailer, whose weekly markdowns from full retail pricing is 10-12%. Those lower prices are offered to all who walk into the store, be they regular customers or convenience shoppers. With Access Pricing the lower prices available will depend upon the customers’ spending history. As a popular slogan goes, Loyalty has its rewards – and rightly so! The question then becomes what share of that markdown percentage should be based upon a customer’s spending history? The answer depends on much you value repeat business (ie, loyalty).
4. It is a differentiator. Companies who cannot be the price leader know they must differentiate if they wish to survive. Therefore, most finish up trying to be the best in quality, service and cleanliness. Unfortunately, most of the non-Big Box retailers finish up in the same camp, all singing the same song. The result? They are all different from the Big Box but not too much different from their fellow non-Big Box peers! So it’s not just a matter of being different, but doubly different – from both the Big Box and your peers. One way this can be accomplished is by owning the Access Prices space in your marketplace.

The Future of Access Pricing

Results to date indicate that Access Pricing does indelibly differentiate the retailer in the marketplace. Given this, retailers can strengthen this differentiation further by cutting back or eliminating their weekly advertising and applying the savings (both from the ads and from the hours permanently saved at headquarters) towards greater rewards for regular customers. This can be done, for example, by introducing more Access (Crazy Price) items and/or by introducing three market days a month that act as a value reminder to customers to shop with you.

A-Coop, a Japanese food retailer, does this best. A-Coop completely eliminated its three-ads per week and applied the savings to three quintuple-point days (on total spending) on the 5th, 15th, and 25th of each month. Customers find it very easy to remember that they receive 5x the number of points on those days of the month that end in “5”. This simple form of differentiation has been highly successful for A-Coop, with solid same-store sales ever since this program was introduced in 1996. Incidentally, it’s no surprise that customers have very large orders on these three reward-rich days.
The three market days need not, of course, offer extra points. Extra value could be offered instead. For example, on market days your stores could be full of while supplies last specials at crazy prices (accessed only with points, of course). To take maximum advantage of these special offers, customers would have had to build up their point balances in between the market days.

Companies who are not the low cost leader (by definition the vast majority) in their industry sector have no choice but to differentiate if they wish to survive and thrive. Such companies must answer two questions: (1) how can I minimize or fuzzy the price gap perception with the low-cost leader and (2) how can I stand out from all the other differentiators (ie, all competitors apart from the low-cost leader)? Being the first in the marketplace with Access Pricing is a viable option.

Who Can Benefit From Access Pricing?

Obviously, food retailers can, as we have seen. Most other sectors of business can, too. For example, consider two disparate sectors: airlines and office supply stores.

Currently, many airline frequent flyer programs are losing their luster. Why? They offer more regional jets, meaning no first-class seats (ie, upgrades); the ability to redeem miles for the free trip you want is getting more and more difficult; and the cost of access to their lounges keeps escalating.

Now, consider just one aspect. Many airlines offer a free domestic trip (on some distant date in the future!) for 25,000 miles. What if the airlines also offered a ticket on any domestic trip for (say) $100 plus 10,000 miles? That would inject much-needed cash into an airline’s purse while providing a meaningful reason for travelers to fly that airline, even if individual flights are always the lowest priced. For maximum results, an airline would break its points (miles) into two categories: points earned from flying the airline, and other points. Only points earned from flying the airline would be the basis for the lower-priced tickets – it does want to fill its planes, right? Such a move would also allow an airline to cut most of its advertising costs because of its new clearly-differentiated position.

There are three major office supply chains in the US. Prices don’t vary much among them. Two have loyalty cards which are, in effect, very low percentage (1-3%) rebate cards. Despite this, warehouse clubs, in my experience, offer lower prices on the office items they carry, causing office supply customers to split their shopping. Office supply chains could neutralize, indeed trump, their warehouse club competitors with Access Pricing. For example, instead of offering a thin discount on everything bought, an office supply chain could offer crazy prices on key items that the warehouse club competitor carried. Such would neutralize the need for its customers to split their purchases between its stores and the warehouse clubs.

Closing Comments

The above cuts to the essence of rewards. Ideal rewards are those that change people’s behavior. We know, from programs such as Discover’s credit card with its 1% annual refund, that a low-percentage rebate doesn’t light the marketplace on fire. The key is in offering noticeable, meaningful rewards, even if there are fewer of them. One incendiary device that does, and which we’ll see a great deal of in the coming years, is this fourth way of pricing: Access Pricing.

Copyright © Brian Woolf

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Brian Woolf is a global leader in loyalty marketing. In addition to writing three definitive works on the subject, “Measured Marketing: A Tool to Shape Food Store Strategy,” “Customer Specific Marketing,” and “Loyalty Marketing: The Second Act,” he spends his time helping retailers develop and strengthen their loyalty programs. For more information about Brian and his books, visit www.brigantinemedia.com.

News Flash: The Spouting Whale Gets Harpooned. (Translation: Don’t dare to be different. Don’t make waves. Don’t stand out in a crowd.) Corollary: The whale that doesn’t spout, drowns. Many experts and articles have espoused the importance of having a uniquely competitive edge to succeed in business. I’d offer a more specific observation: that all successful businesses dominate their marketplace in four or five distinct ways, not one.

The fact is, domination in only one or two strategies can be catastrophic. Ask Peoples Express Airlines, which focused only on Price (No. 3) as its point of difference. Or Sears, which has struggled for years to be known for something besides its Signature Brand (No. 23) — Kenmore.

Here is an array of 25 alternative strategic points of difference (SPODs):

Our mission is to…

Have the Freshest Products Have the Greatest Variety of Products Be the Low-Price Leader Be Price Competitive Be the Easiest to shop Be the Most Community-Involved Be the Cleanest, Most Sanitary Have the Highest-Quality Products Have the Most Knowledgeable Staff Be the Best Place to Work Be the Most Kid-Friendly Be the Most Savvy Niche Marketer Have the Fastest, Most Efficient Checkout Be the Most Fun (i.e., Treasure Hunts) Be the Friendliest Place in Town Have the Most Convenient Location Have the Greatest Selection of Services Be the Most Cost-Conscious Be the Most Technologically Advanced Be the Most Unique and Creative Operator Be the Best Meal Marketer (Foodservice) Have the Most Personalized Service Have the Strongest Controlled Label/Signature Items Be the Most Socially Responsible/Environmentally Friendly Be the Most Promotionally Exciting

Think of a business you and your family love to patronize. Now, ask yourself, “What does this company do better than all of its competitors?” Watch how the points of difference (or points of greatness) begin to flow from your mind. I guarantee you won’t only think of just one difference. More likely, you’ll come up with three or four.

Now, think of a business that you frequent only because of habit or its convenient location (No. 16). Try to identify its unique points of difference besides being conveniently located. You’ll be lucky to come up with two reasons for that business’ being.

Finally, think about your store. Can you make a case for market dominance in three, four or five of these 25 SPODs? Being as honest and objective as you possibly can, try listing your unique points of difference. If you’re like many, you’ll be quick to write down that you are undoubtedly the “Friendliest” store (No. 14). Then, you’ll write down “Freshest” (No. 1). After that, you struggle. How about the “Cleanest”? And, oh yeah, “Community”?  Torn between your pride and your objectivity, you sit looking at a very short list of dubious advantages. Are you really the best at cleanliness (No. 2)? If your store is 10 years older than the newest place on the block, that’s a hard image to win. Are you really the best at community relations? Just because you dole out money to every needy cause doesn’t make you an active community participant. Your toughest competitor up the street rewards all of its managers with time off and company-paid membership dues for joining and participating in any local civic organization. So, who’s really committed to the community?

Bottom line: You might have one convincing SPOD and two “maybes.”  But all of the evidence suggests you must have three fully developed SPODs to survive, and four or five to thrive.

Of course, selecting your five strategies is relatively easy. Effectively executing them to market dominance is an entirely different matter.

The selection process can take anywhere from five minutes, if you do it by yourself (the wrong way), up to two days (the right way).

The right way involves inviting 15 to 30 of your most involved, dedicated and wisest folks from all levels to a strategy meeting. The process of choosing your five SPODs should occur right after the group has reviewed and signed off on your mission statement as one that is inspiring and provides clear direction. (See www.progressivegrocer.com/haroldlloyd for more information on crafting an effective mission statement.) The next step is for each person in the group to take the list of 25 SPODs and ask themselves these three questions about each strategy:

Is being the “________-est” something you truly want to achieve? Yes? No?

Is being the “________-est” something the customers in your marketing area really want? Yes?   No?

Is your company physically, financially and intellectually capable of achieving the “_________-est”? Yes?  No?

If the strategy being tested receives three “yeses,” it qualifies as a legitimate option for your company’s five SPODs.

The next step is to invite all participants to compare their top five selections. Then, get the group’s consensus as to the top five most relevant SPODs. This empowering experience will reward the participants with the feeling that they helped determine the company’s direction and future.

Looking at a few recent issues of Progressive Grocer, I spotted five companies that were mentioned in high regard. If you know these markets or have ever shopped in these stores, you’d agree how easy it is to pick their unique sets of SPODs:

Publix’s five SPODs (No. 6,  No. 7, No. 8, No.10, No. 22) Wegmans’ five SPODs (No. 1, No. 8, No. 9, No. 10, No. 21) Costco’s five SPODs (No. 3, No. 8, No. 14, No.18, No. 23) HEB’s five SPODs (No. 3, No. 6, No. 8, No. 9, No. 20) Dorothy Lane Markets’ five SPODs (No. 1, No. 8, No. 9, No. 21, No. 22)

Now, pick a company that you know has fallen on tough times or was recently merged with or purchased. Look for what you might guess their SPODs to be. Odds are, you’ll come up with only one or, at most, two, but no more. This realization supports my hypothesis that if you develop five SPODs, you’re relatively impervious to competitive incursions and economic downturns. With only one or two legitimate SPODs, your months are numbered.

Lesser leaders might be discouraged to learn that earning the distinction of being the best at anything takes time. The companies mentioned above didn’t earn their five SPODs in a couple of periods. But with an unwavering commitment, you can count on achieving market supremacy with regard to your three to five SPODs a few years after you get started, and long before it’s too late.

Finally, in order to get noticed, you must stand out. A church marquee said it best: “Stand for something or you’ll fall prey to anything.”

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Harold Lloyd is a retail specialist, author, teacher and presenter. He is the author of “Am I the Leader I Need to Be?”  For more information about Harold and his book, visit www.brigantinemedia.com.

Also visit Progressive Grocer.

As the clerk was writing the charge slip I noticed a sign behind the counter that read: “Returns will only receive a store credit.”

I said to the clerk, “You mean if my wife doesn’t want these clothes, she can only get a store credit to buy more of what she doesn’t want?” How silly. I told the clerk to tear up the slip and left the store.

Why do some stores act as though customers go shopping to bring it back? Who has that kind of time? The clothing store not only lost my large sale, but I’m never going back

Some companies are so concerned about returns, they are losing business and don’t even realize why. Think about it, how many customers bring everything they buy back?

Let’s assume you have a store that has 1,000 customers a week – how many of the 1,000 return items? Let’s assume it’s 5 percent. And those customers don’t return all the items they bought. So that’s 95 percent of your customers who don’t return any items.

Nordstrom’s, the most successful department store in the country, takes anything back…  period. Why? Because they “get it.” Other stores don’t.

There is a great story about a lady that bought a cocktail dress at Nordstrom’s, apparently wore it over the weekend, and returned it to Nordstrom’s on Monday the following week. She got her money back – but the customer inadvertently left a dressed up handkerchief in the pocket. You know what Nordstrom’s did – they laundered the handkerchief and mailed it back to her with a note that said she had inadvertently left it in the dress. Classy isn’t it. But you know what my bet is, the next time that lady has more money she will be spending it at Nordstrom’s.

Sears has receipts that read: “Refund will be issued in the form of a gift card” and people wonder why Sears is in trouble.

Don’t you hate it when you return something and the company wants you to fill out a form with your name, address, phone number (which is none of their business), and sign before you get the refund. Why make the customer feel like a “crook”?

Another great Nordstrom’s story is about a customer walking down the street with a friend and happened to be going by a Nordstrom’s store. He said to his friend, “I bought these shoes I’m wearing from Nordstrom’s in another city, and they have never felt right, but I don’t like the style. I’m going to see if they have another pair.” He’d had the shoes he was wearing for 6 months. He asked the shoe salesman if they had that shoe in his size, and the salesman replied that they did. So the customer tried on the new one, and they felt 100 percent better. He said to the salesman, “These are great how much do I owe you?” The salesman replied, Let’s just trade you for the old ones. Wow, wow, wow! Try that at Dillard’s – it would never happen.

Another pet peeve of mine is when you see a sign in a store that reads “restrooms for customers only.” Why? You’ll never see that sign in a McDonald’s – you know why? Ray Croc who founded McDonald’s a long time ago figured it out: If the customer comes in just to use the restroom, my bet is they are going to buy something before they leave. And if they don’t, so what? They leave with a great feeling about McDonald’s don’t they?

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Don Gallegos is the author of “Win the Customer, Not the Argument.” His customer service philosophy is, “The customer is not always right, but she is always your customer.” For more information about Don’s book, visit www.brigantinemedia.com.

Click here to read an excerpt from Don’s book.

After 22 years of my traveling, learning and teaching, Progressive Grocer has taken a leap of faith and asked me to write a recurring column about the business I’ve loved since I was 14 years old.

Upon agreeing to the invitation, I immediately set out to write my mission statement for this column: “To make a difference by offering practical solutions to the myriad issues that challenge all of us in retailing today. Additionally, I pledge to Deliver (D) more than the reader would ever Expect (E) from a one-page presentation. Algebraically, my mission for this column could be written as D>E.”

Every meaningful initiative, both in business and personally, should begin with a mission statement or statement of purpose. The 48 words above will keep me focused on the task at hand. They will help me avoid straying into areas that may be less relevant to my target audience.

Your business should also have a mission statement to keep you focused. And this statement should be shared with every human being in your organization. Every meeting at every level should begin with the recitation of your mission statement … in unison or solo with a volunteer. If we say it often enough, not only will we begin to take it to heart but our folks will, too.

I smile now as I reflect on the early days of Wal-Mart. To think of how many of us used to pooh-pooh the Wal-Mart chant (mission) they used to kick off each day with at every Wal-Mart store. “How corny!” I heard many a skeptical retailer retort. And now, look at us and look at them. Their daily recitals weren’t corny. Rather, they were the seeds of a unified focus taking root.

“Where there is no vision, the people perish,” it says in Proverbs 29:18. Stated more positively, we can express this idea as “Where there is a shared vision, there is power.”

How do you share your vision? Whether you’re a company president, a department manager or a parent, you are a leader. And if you expect to develop a following, you had better have a vision and be aggressive about sharing it with your followers, to give them a clear path to follow.

A mission statement is the vehicle that helps us share our vision and unify our focus, much like how a magnifying glass can collect daylight and focus it into a bead of powerful energy. Because many businesses have not committed to documenting and sharing their vision and mission, their associates are symptomatically unclear as to the true meaning of
their efforts. They end up feeling directionless, and that turns boring and unfulfiling really fast.

Drafting a Mission Statement

Done right, a mission statement can become a beacon of light, a rallying point, a benchmark, a guidepost, or all of the above. In the long run, you’ll undoubtedly save time and money, and get “there,” wherever that may be, faster than you ever would have before.

If you don’t have a mission statement, or the one you have is essentially “wallpaper,” here’s my recommendation to you: Recruit a group of 15 to 30 dedicated associates from all levels in your organization and draft a mission statement together. It can take around four hours if they conscientiously do some homework (their individual attempt at a company mission statement), or eight or more hours if they show up less prepared. Then pass the first draft around to more people in the organization for feedback. Is it inspirational? Does it generate “goose bumps”? Does it evoke pride and sense of purpose? If not, reconvene for a few hours and make the necessary refinements, then hoist it up the company’s flagpole for all to salute.

Here’s a personal offer: I have budgeted some time to review the first 20 mission statements sent to me. I’ll be candid and frank with my evaluations, and will provide a push in the right direction if your statement needs one. Send your mission statement to Harold@hlloydpresents.com.

Postscript

After each article, I will invite you to evaluate the value of my message by e-mailing me a rating from 1 to 10, along with any constructive/complimentary remarks. I’ll need your feedback to help me to continually improve this column. Although I’ve written
two books and conducted 35 seminars over the last two decades, this is a new endeavor for me and I do want to Deliver (D) more than you’ll Expect (E) from a one-page column, (D>E).

Thank you for the time you have invested in reading these thoughts. I hope you feel we’re off to a productive start.

Harold Lloyd is a retail specialist, author, teacher and presenter. He is the author of “Am I the Leader I Need to Be?” For more information about Harold and his book, visit www.brigantinemedia.com.

Also visit Progressive Grocer.

As we all know, loyalty is a very simple concept: does the customer keep buying from us in an environment where she has so many choices? Yet isn’t it curious that only a few companies are known for their customers’ loyalty? Looking around the world, we see part of the explanation lies within what are called loyalty marketing programmes. Some truly are loyalty marketing programmes; but many are loyalty selling programmes. Let me explain.When I was at business school, I was introduced to the difference between marketing and selling. Marketing is the understanding of your customers’ wants and needs and then satisfying them. Selling is getting the customer to buy what you have bought. Drucker once made the wise observation that if you market effectively, you don’t have to sell!

Companies practicing loyalty marketing are recognized by their primary focus on gathering customer data to better understand and satisfy their customers’ needs and measuring, through their customer retention rates, how effective their efforts have been. Companies who practice loyalty selling are recognized by their primary focus on using their customer data to sell more to them.

Costco and Tesco are two companies that exemplify outstanding loyalty marketing. US-based Costco, operating 433 mega-sized wholesale clubs in 8 countries, considers loyalty to be its scoreboard, not its kick-off. Costco measures its success by its membership card renewal rates. [To shop at Costco, a customer must have either its basic card (fee: $50 year) or its benefits-enriched card ($100 year)]. Costco achieves a remarkable annual renewal rate of 86%! That’s better than the retention rate of almost every free card programme. What does Costco focus on to achieve that stellar score? It’s what the company is all about; the company is driven to give great value to its customers. To do that it must gain a great understanding of what its customers want – and then give it to them at the best value. It’s a simple virtuous exchange: understanding and satisfying customers better than competitors – in turn, customers reward them with their loyalty.

Tesco achieves its renowned growth walking a parallel path. (UK-based Tesco operates 2,380 supermarkets in 13 countries.) The company’s stated fundamental purpose for existence is “to create value for customers to earn their lifetime loyalty”. It is no surprise that Tesco’s CEO, Sir Terry Leahy, describes its loyalty card programme this way: “The goal of the Clubcard is to earn and grow the lifetime loyalty of the customer.” Tesco is all about its customers – not just this week’s sales figures but its customers’ lifetime loyalty: a daunting, but highly motivating, goal.

Focusing on giving superior value to your customers by using your loyalty card to understand and satisfy your customers’ needs and then measuring how well you are satisfying them (through their retention and spending levels) is what excellence in business and marketing is all about. In other words, to be outstanding at loyalty marketing you must be obsessed with the customer; you must have a customer-centric culture.

One of Tesco’s core values, for example, is “to understand customers better than anyone.” And it goes to great lengths asking customers what they think (and comparing that feedback with what they actually do); listening to their views; and acting on all of this. As a customer, wouldn’t your loyalty to a company increase if it sought your opinion, adapted its offering accordingly, and gave you the best value to top it off? No wonder Tesco has doubled its market share, to 30%, in the UK over the past 10 years.

So why aren’t more companies great at the art (and science) of loyalty marketing? One major reason is explained by the Progress Paradox:

Everyone loves progress.
Change is necessary for progress.
Everyone resists change.

Change conjures up thoughts of pain, fear, work, and uncertainty which, as human beings, we all subconsciously avoid. Yes, we love the end result; we just don’t want to go through the pain of getting there. (Yes, we’d love to lose 5 kg; we just don’t want to go through the pain of eating less and exercising more.)

It’s my opinion that businesses who wish to survive in the coming decade have no choice but to change. They must find ways to offer greater value and they must develop a greater understanding of their customers. Our part of the world has become a mature marketplace. Rare are opportunities where there is a sales gold rush due to unfulfilled demand. Sales gains will predominantly be made through delivering greater value. Greater value comes from lower prices which come from lower costs. That involves change – and pain. Greater value will also come from better customer comprehension – and acting on that knowledge. Again, more change and pain.

Based upon my observations in different countries, having a superlative loyalty programme alone will not be enough for continued business success in the coming decade. Yes, it’s critical to have one, but it must be complemented by a movement to lower prices/greater value in a world where pricing value will increasingly be dominated by value-driven global giants such as Wal-Mart, Tesco, Costco, Carrefour, Aldi, Ikea, and Home Depot. We live in a Western world where our real wages (and real spending power) are declining due to the active addition to the free-market, global stage of a third of the world’s population (China, India and Russia). It’s inevitable that value will be vital.

The challenge in the coming decade will be as exciting as the first, but different – putting customers truly at the core of our businesses, pushing ourselves to really understand them, thereby allowing us to provide them with the greatest value.

Copyright © Brian Woolf

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Brian Woolf is a global leader in loyalty marketing. In addition to writing three definitive works on the subject, “Measured Marketing: A Tool to Shape Food Store Strategy,” “Customer Specific Marketing,” and “Loyalty Marketing: The Second Act,” he spends his time helping retailers develop and strengthen their loyalty programs. For more information about Brian and his books, visit www.brigantinemedia.com.

KC’s View:

To be honest, I find that this prompts several reactions on my part.

First, the Times correctly notes that this trend isn’t just bad for workers. It also is bad for companies. It means that employers are not taking seriously one of the components of their jobs – to create a workplace that is satisfying and happy. Granted, there are places where this is more difficult than others…but is there any workplace out there that wouldn’t be more productive if the employees felt better about being there? And isn’t productivity the ultimate goal of every employer?

I’m not arguing for some utopian view of the workplace here. But I would suggest that the retailers, for example, who say that their first priority is their employees, because they understand that happy employees make for happy customers, are among the ones who get it. And I’m saying that the employers that have made a point of not laying off anyone during the recession – because they understand that creating stability and a “we’re all in this together” environment is one of the best ways to make sure that a company survives the tough times and is prosperous in the good times.

Besides, if the survey is correct and 20 percent of the people polled actually are not in the same jobs a year from now, think about the costs in terms of things like training, hiring and unemployment insurance.

One other tangential note: If I were an employer, it seems to me that this would be a perfect time to identify the right people who could help me raise my game … and then, having hired them, do everything possible to make them happy and fulfilled.

However…I have to admit to a little bit of impatience with all these folks who are complaining about not being happy at work. At least you have jobs!!!!!

Now, I’m lucky. I love my job. It may be one of the best jobs in the world. It certainly is the best gig I’ve ever had. So I’m spoiled.

But I also think that to some extent, we all have a responsibility for our own happiness. (For some reason, I keep thinking of the scene in “Moonstruck” when Cher slaps Nicolas Cage and says, ‘Snap out of it!’” But I digress…for some reason I have movies on the brain these days.)

Here’s a thought. If just half the people who say they are unhappy in their work actually decided to be happy – to take responsibility for finding joy in their work – I’d be willing to bet that it would have at least some impact on the other half. because unhappiness – like happiness – can be contagious.

Again, I realize we are living in tough times. It is hard to be too happy when one reads the newspapers, watches cable news, pays for gasoline, stands on security lines at airports, etc…

But to refer to another movie – somewhat obliquely, for reasons that will immediately become apparent – I think that maybe we ought to adopt as a mantra the most famous line from the Tom Cruise movie, Risky Business.

Know what I mean?

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“Content Guy” Kevin Coupe is the co-author, with Michael Sansolo, of the new book, “The Big Picture: Essential Business Lessons From The Movies,” available by clicking here .

Also be sure to check out Kevin Coupe’s website at www.morningnewsbeat.com.

OR: Write four emails a day. One idea: Thank customers for their recent purchase from you.

OR: Give out four calling cards a day. You meet new people every day. A waiter or waitress. A fellow Rotarian. The person next to you on the plane. We believe calling cards are “miniature billboards.” They tell who you are and what you do and if you give enough away you’re practicing the Fuller Brush theory of knocking on enough doors and one will open.

OR: AFTO four times a day. Which is shorthand for Ask For The Order. Too many salespeople present their case and wait for the customer to say “OK, I’ll buy it.” Rarely happens. Ask For The Order.

Do one of each or four of one of these techniques every day! That’s more than 1,200 contacts a year. If only 10% respond, you have more than 100 extra sales you would not have had.

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Murray Raphel travels the world speaking about marketing for retailing, direct marketing, financial/insurance groups and the food industry. He is the author of several books including “Selling Rules!”, “Speaking Rules!”, and “Tough Selling for Tough Times.”

For more information about Murray and his books, visit www.brigantinemedia.com.

I usually pay the monthly lease payment for my wife’s car on the Internet, even though I still receive a monthly bill, but  I never received a bill from U. S.  Bank for this September’s payment, and I missed the deadline. It was the first time in four years I had missed a payment.  The bank called me and reminded me about the missed payment. I asked if I could pay over the phone.

The bank representative said I could pay over the phone, but that the bank would also charge a $10 fee, which I assumed was the late fee. I was wrong. The $10 fee was just for the “convenience” of banking by telephone. There was an additional $15 late fee, which the customer service representative failed to tell me. So I had to pay $25 in fees because I was late on the payment for the first time ever.

Now, $25 is not a tremendous amount of money. But let’s look at this in context.

• I never received a bill from the bank for September. I think the bank failed to send me a notice about the payment, but they are charging me a fee for paying late. That is unfair. U. S. Bank should have forgiven the late charge.

• I’ve been a great customer, not missing one payment in four years. It seems like the bank is playing a game of “gotcha!” – waiting for me to make a mistake so they can add on a lot of charges.

• What are they thinking by adding a telephone penalty? They’re getting their money right away. Why are they charging me extra when I’m willing to pay?

• I’m so mad I’m paying off the car loan and I’m done with U.S. Bank.

What has been your experience with banks? Am I the only one who thinks that a lot of banks give lousy customer service?

Customer Service Lessons:

- Loyal, reliable customers occasionally make mistakes. A blanket policy of extra fees should be waived the first time an otherwise good customer pays late.

- Customer service people need to be trained and have the authority to make the judgment call on behalf of loyal customers.

- Banks and other companies will lose their best customers if they try to earn back profits by piling on punitive fees.

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Don Gallegos is the author of “Win the Customer, Not the Argument.” His customer service philosophy is, “The customer is not always right, but she is always your customer.” For more information about Don’s book, visit www.brigantinemedia.com.

Click here to read an excerpt from Don’s book.

“Up In The Air,” starring George Clooney and co-written and directed by Jason Reitman, is easily one of the best movies of the year, and will end up being considered one of the best movies of the last decade.

The basics of the plot are fairly simple. Clooney plays Ryan Bingham, a consultant who flies around the country firing people at companies run by people who do not have the stones to do it themselves. It is a heartless job, but Bingham copes with it by keeping his own life as uncluttered as possible – his apartment is less homey than the average hotel room, and he is pretty much disconnected emotionally from friends and family. Bingham’s great consolation is frequent flyer miles – he’s got travel down to a science, and he’s well on his way to having ten million miles on American Airlines.

But two things happen to Bingham. First, he meets a woman, played by Vera Farmiga, who seems to share his priorities, travels as much as he does…and therefore, is someone who can get past his emotional roadblocks. And, he finds his whole way of life threatened when another woman (Anna Kendrick) joins his company and begins to implement a plan that will have all the layoffs done via online conferencing.

The ad slogan for “Up In The Air” is an apt one: “The story of a man ready to make a connection.” But this doesn’t just go for Bingham. in fact, the entire movie is about the importance of human connections. While Clooney’s character may seem like has has a heartless job, the fact is that he understands the importance of being present – really present – at an emotional moment that will be one of the most important in many of these people’s lives.

These kinds of connections often are underestimated by businesses, especially today, that are obsessed with cutting costs, with being efficient, with making the numbers. We can see them everywhere we look. In voice mail systems that give us buttons to touch but seem to delay until the last possible moment giving us a human being with whom to speak. In self-checkout systems in supermarkets that eliminate the last human touch point – sometimes the only human touch point – that exists in that retail environment. In e-commerce businesses that are almost completely automated, and in which the only customer service personnel are located in a faraway land with only a passing familiarity with English. In self-service gas pumps. In the town where I live, there will no longer be a guy selling train tickets at the commuter station, and all tickets will have to be bought from the kiosk. The list goes on and on…

Now, a perfectly legitimate argument can be made for all of these changes, and I must admit that in some ways, these shifts make our lives easier and more convenient. But there is a level of depersonalization going on, and we have to wonder what the long-term impact will be. The risk of not considering it, I’m afraid, is that our culture morphs into something less than it should be before we even know it has happened.

It should be noted that when they started working on the script for “Up In The Air,” it was designed to be something of a farce. But the recession intervened, and the filmmakers were smart enough to change course – even to the point that they used real people in the beginning and end of the movie, talking about their experiences being laid off. It gives the film an anchor in reality, a compelling reality that is hard to shake.

“Up In The Air” is a serious movie for serious people, done with a light touch. Clooney is a the top of his game, cementing his position as someone with both move star glamour and rare good taste in the projects he chooses. (Think about a career that includes “Out of Sight,” “Three Kings,” “Ocean’s Eleven,” “Confessions of a Dangerous Mind,” “O Brother, Where Art Thou?”, “Good Night, and Good Luck,” and “Michael Clayton.” All pretty much in a single decade. Be hard to point to many other actors with that kind of creative track record.) But he also shows a thoughtful vulnerability in “Up In The Air,” a side that he hasn’t much shown before.

“Up In The Air” is a terrific movie. It almost certainly is going to get a bunch of Oscar nominations. But more importantly, it is that rarity these days – a movie that makes you think about serious issues.

Slainte!

“Content Guy” Kevin Coupe is the co-author, with Michael Sansolo, of the new book, “The Big Picture: Essential Business Lessons From The Movies,” available by clicking here .

Also be sure to check out Kevin Coupe’s website at www.morningnewsbeat.com.

As I was checking in, I asked, “This room has a king-sized bed, right?”

The clerk said, “Oh, we don’t have any king-sized.

“What do you mean?” I asked.

She said, “Well, we’re booked up.”

“When I made the reservation 3 months ago, you should have told me I might not get a king-sized bed,” I said. “If you had told me that, I would have reserved at another hotel.”

She offered a queen-size bed in a parlor room so I took a look. The bed was in the wall and you could hardly walk around it when it was pulled down.

At this point I was steaming. But the U.S. Open was on in New York that week and all of the hotels in Manhattan were booked solid.

The desk clerk said, “We can give you two twin beds tonight and move you to a king-sized bed tomorrow.” So I agreed, and the next day they put me in a king-sized room. Then the clerk told me, “As a courtesy, we’re going to give you a free breakfast tomorrow.”

This is what Sheraton allows their desk clerks to do if they make a mistake with a room reservation and the customer is unhappy: a free breakfast. How cheap is that? This is NOT good customer service. If they couldn’t get me a king-sized bed the first night, they should have comped the first night. Period. I paid $300 that night for a room I didn’t want.

I’ve been going to New York every year for 24 years and I’ve always stayed at the Sheraton. But I’m not going back there.

The people at Sheraton just don’t get it. They act like they did me a favor. They got me a king-sized bed for my second night. That’s not a favor. I know there are people who don’t check out on time. I realize that. But I’ll bet you earlier in the day somebody got that king-sized room and he didn’t make the reservation three months in advance.

Sheraton has a customer service and a systems problem. And because of that, they’ve lost a customer. For life.

Customer Service Lesson: When you take reservations, you’re making a promise. If you have to break the promise, you owe your customer something just as good or better than what you promised. Not something worse. And if all you have to offer is something worse, your customer shouldn’t have to pay for your mistake. (And if your reservation system is so bad that mistakes happen all the time, you’d better get your system fixed – right away.

Don Gallegos is the author of “Win the Customer, Not the Argument.” His customer service philosophy is, “The customer is not always right, but she is always your customer.” For more information about Don’s book, visit www.brigantinemedia.com.

Click here to read an excerpt from Don’s book.

This paraphrasing of McDonald’s jingle (of almost four decades ago!) rang the doorbell to my memory while on a recent trip to Europe. As a perpetual student of how to use differentiation to strengthen a retailer’s brand, I was delighted to discover a creative loyalty builder, one that has been working successfully since the start of the century.The concept is simple: a retailer offers qualified customers the opportunity to Take a Break Away at an Every Day Low Price (one lower than those offered by the well-known web hotel price discounters). It’s a classic example of Access Pricing, one of the most cost-effective tools in a loyalty marketer’s toolkit – offering a benefit only to selected (ie, profitable, loyal) customers.

In fact, the only cost to the retailer, I discovered, is promoting the Break Away. The behind-the-scenes, low-key program provider, Loyaltybuild, negotiates the volume supply of rooms from hotels and motels and operates the room-booking platform. The booking fee it charges the hotels and motels covers its costs and profit requirements.

It struck me as the Triangle of Win because:

1. The customer wins by taking a Break Away at a lower-than-regularly-available price,
2. The retailer wins because this sector-exclusive offering in its own name builds both customer and brand loyalty, and
3. The hotels and motels win by increasing their occupancy rates and contribution to profits.

From a customer’s perspective, what impressed me most were the program’s simplicity and ease of operation. Room bookings (offered as 2-people, 2-night Break Aways) are made in an unbelievably simple 1-2-3 step process. The 3-4 star accommodation range offered is all at the same EDLP rate, regardless of star rating (with one fixed price for summer, another for winter.) The Break Away accommodation offering is within driving distance of the retailer’s market area, although most of the European retailers offering this program featured additional Break Aways in favorite cities like Paris.

And the program is not just for retailers. An insurance company offers the program as a nice thank you reward to its customers. I could imagine banks seeking to strengthen customer ties doing likewise.

Like Tesco’s clever but accurate understatement, Every little bit helps, this program, too, serves as yet another arrow in a smart retailer’s quiver of differentiated loyalty builders. As we all know, it’s not just one differentiated benefit that builds customer loyalty, it’s the combination of benefits, all easy-to-understand and executed well. You deserve a break away captured my imagination and fills that requirement.

Copyright © Brian Woolf

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Brian Woolf is a global leader in loyalty marketing. In addition to writing three definitive works on the subject, “Measured Marketing: A Tool to Shape Food Store Strategy,” “Customer Specific Marketing,” and “Loyalty Marketing: The Second Act,” he spends his time helping retailers develop and strengthen their loyalty programs. For more information about Brian Woolf’s books, visit www.brigantinemedia.com.

You can learn more about Brian Woolf at his website www.brianwoolf.com.

I’m betting I’m not the only one who makes mistakes like that. Especially in business, we all too often forget one of the great lessons from the Bible: that Noah built the ark before it started raining. No doubt, I would have missed out on that too, but then again Noah didn’t have the NFL on HDTV.

So as I moped my way through the snow it got me thinking about the small things that trip us up. I could reflect on the great experiences I had in the past year because of a small kindness provided by a single individual or, sadly in greater number, the headaches caused by those who found a way to make things harder.

And that got me thinking about George Bailey. You no doubt know by now that Kevin Coupe and I just released a new book on the lessons easily gleaned from movies. (If you haven’t, trust me: there’s an ad for “The Big Picture: Essential Business Lessons from the Movies” below.) The reason those lessons strike us as working so well is that stories or narratives simply help us say things better. Consider how easy it was to relate to the point on Noah up above.

George Bailey tells us a great story. If you don’t get the reference, George is the main character of “It’s a Wonderful Life,” the timeless Christmas classic, directed by Frank Capra, about a man who discovers the value of his own life by seeing what the world would have been like without him. (To be honest, this isn’t my favorite seasonal movie. I can watch hours of Ralphie trying to get his BB gun in “A Christmas Story,” but one viewing of George Bailey is more than enough for me every few years.)

But the scene from “It’s a Wonderful Life” that gets me is this: It’s when George sees his brother’s tombstone in a cemetery and says that just can’t be. His brother, Harry, has to live because he wins the Congressional Medal of Honor in World War II for a daring aerial attack that saves troops on a transport ship. But because George wasn’t there to save Harry from drowning in childhood, Harry wasn’t in that plane and all the men on the transport died. One life impacts many, many others.

In short, everything we do – good and bad – has consequence; it’s just that often times we don’t know it and unlike George Bailey, we won’t ever get the chance.

So as we close the door on 2009, a year destined to be remembered for tough times, slow sales and dwindling profits, keep George Bailey in mind. Keep in mind that small steps and small gestures may be even more important this year to associates, customers, family and whoever else. Those small steps, especially taken proactively, could mean the difference between success and failure next year.

So let’s hope the New Year brings improvement in everything we do.

Oh, and if you know how to fix a snow thrower … Give me a shout. Quick!

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Michael Sansolo is the co-author, with “Content Guy” Kevin Coupe, of the new book, “The Big Picture: Essential Business Lessons From The Movies,” available by clicking here .

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .

Take, for example, the movie “2010,” which was released in 1984 as a much-anticipated sequel to the legendary “2001: A Space Odyssey.” “2010″ wasn’t an enormous success, owing in part to the fact that is was a sequel to one of the iconic science fiction movies of all time that was directed by Peter Hyams instead of Stanley Kubrick; the film “2010″ also had a more literal narrative than the original film, looking to answer the seemingly unanswerable questions posed by the Kubrick film that was by turns metaphorical and allegorical.

(To be fair, novelist Arthur C. Clarke, who wrote the original novels “2001”and “2010,” was involved with both productions. But that didn’t stop the two movies from appearing not just to have had different parentage, but have been produced on different planets.)

Sure, they had to look a quarter century into the future, so there was no reason for the folks behind 2010 to guess that the Houston Astrodome would no longer be the home of the Houston Astros, as is mentioned in one aside by an astronaut played by John Lithgow.

But it is interesting to note that in the film’s view of the year 2010, mankind is embarking on a second manned space flight to Jupiter. Not only have we largely stopped reaching out to other planets, but our version of a space station is a lot more modest than the one envisioned by the screenwriters. One could argue that the filmmakers had too much imagination, or that humanity has too little; either way, they got it wrong.

While “2010″ correctly guessed that the world would be facing enormous political pressures and international crises, the film believed that they would be between the US and Russia and focused in Central America; terrorism isn’t mentioned, radical Islam isn’t a plot point, and an old fashioned naval blockade seems to be the military tactic of choice. (Oh, for the good old days!)

One correct prediction by the film was the ubiquity of laptop computers. I vividly remember, when I saw the film’s original release, being jazzed by the depiction of Roy Scheider’s character as sitting on a beach working on a Mac laptop; they may have gotten the shape of the laptop wrong (and used the old multicolored Apple logo), but the essence of the projection was right on. (They didn’t get the sophistication of operating systems and graphics right, however – all the computers in the film have clunky interfaces that are about as modern as an Atari Pong game.)

So, what do we learn from this dissection of a 26-year-old movie?

For one thing, nobody knows – really knows – anything. Even the very best predictions by the most esteemed futurists are, at their core, guesses. Informed guesses, perhaps. Lucky guesses, sometimes. But guesses nonetheless.

But it doesn’t matter. You have to prepare for what can happen, not what you think might happen. “Readiness is all,” as Shakespeare wrote in “Hamlet.”

The coming year will be replete with enormous challenges. Retailers and manufacturers will be working to gauge the speed and extent to which the economy will recover from the free fall of just 14 months ago. This will impact not just the kinds of products and services that they offer, but their inventory levels and the extent to which they invest in people, in training, in infrastructure and innovation.

It is likely that during the next 12 months, some companies will change ownership, some executives will change companies or be dismissed outright, and some brands (both national and private) will surge while others will fade. There will be persistent food safety challenges, and the possibility that consumer confidence in the integrity of the food supply will continue to erode, a little bit at a time. It is even possible that some new competitor will come on the scene with a game-changing innovation that catches everybody by surprise…everybody, that is, but the consumers who have been yearning for such an innovation without even realizing it.

You have to prepare for what can happen, not what you think might happen.

Some of it we will get right. Some of it we will get wrong. There will be times that the strategies will be right and the tactics will be wrong, and other times when people and companies will confuse strategic and tactical thinking, and then wonder why progress is elusive.

But the most important thing, it seems to me, is to continue to focus on innovation, to not be afraid of making mistakes, to not be timid. We all know who the industry innovators are, and who they have been for the past years and decades…but for the industry to continue to be successful – to be relevant – that list must grow.

In 2010, we have to strike the word “conventional” from our vocabularies. We cannot just be reactive, but have to find ways to peer around the corner and see what may and could happen.

“2010″ imagined a man using a laptop computer on a beach, and it ended up being just a a fraction of the actual progress made by the actual 2010.

That is some of what I thought about while watching a 26-year-old movie. The challenge is this – to look not 26 years into the future, but two years, six years, 12 years…and to use our imaginations as much as our calculators.

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“Content Guy” Kevin Coupe is the co-author, with Michael Sansolo, of the new book, “The Big Picture: Essential Business Lessons From The Movies,” available by clicking here .

Also be sure to check out Kevin Coupe’s website at www.morningnewsbeat.com.

I like the idea of gift cards. You give a present, and the recipient can choose something that will make him or her happy. Good idea, but…

Sometimes buying a gift card is a real pain in the neck. I went to the service desk at the Cherry Creek shopping center in Denver the other day to purchase a gift card. The clerk at the service desk said there would be a $2.50 charge to buy the gift card.

I almost fainted! A service charge because I was willing to spend $100 in the mall? That’s crazy. They should be offering me a discount to buy the card!

I gave the clerk my VISA card and the clerk asked me for my driver’s license.  After I protested, the clerk explained that the driver’s license was needed because the VISA card could be a stolen card. Wait a second. Is the shopping center now the police department for Visa?

After I complied with the request, the clerk ran the card and asked me to sign and provide my phone number.

At this point, I’m fed up. I told the clerk my phone number is none of the shopping mall’s business and I refused to give it. Reluctantly, the clerk gave me my gift card.

To me, this was miserable customer service. Why?

For one: The shopping center should love having customers buy gift cards. The mall is getting an interest free loan from the customer. Instead, I had to pay a 2.5% fee for the privilege of giving them $100.

Secondly: A significant percentage of gift cards are never used, resulting in even more income to the shopping center.

And third: They wanted information they didn’t need – my phone number – which made the transaction take longer and made me feel my privacy was being violated.

It amazes me that people put up with such poor service. Maybe it’s because poor service is the norm.

That’s it for me. No more gift cards from Cherry Creek shopping center.

Customer Service Lesson: If the customer is making a purchase, don’t make it so difficult to complete the transaction, asking for unnecessary information. And don’t try to squeeze out extra money from the customer. You may discourage the customer from ever shopping with you again.

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Don Gallegos is the author of “Win the Customer, Not the Argument.” His customer service philosophy is, “The customer is not always right, but she is always your customer.” For more information about Don’s book, visit www.brigantinemedia.com.

Click here to read an excerpt from Don’s book.

I called Avis and told them to pick up the car because the battery was dead. Avis said, “Well, Mr. Gallegos, we’ll bring you another car.” I didn’t have time for that, so I told them no and that I was leaving the keys at the hotel’s front desk.

So I left, went to my board meeting, and at the end of the day I got to the airport. I did not expect to be billed anything, because my car wouldn’t start, but, to my surprise, at the Avis desk they gave me a bill. Because my plane was leaving in 15 minutes, I didn’t have time to argue.

I called the Avis customer service 800 line when I got back home. The customer service person said to me, “Well, Mr. Gallegos, you had that car overnight.”

I responded, “Sure, I had it overnight. I had to go to bed. I drove that car exactly six miles and the battery died.”

She said, “You drove it and you had it overnight.”

I asked, “That’s why you’re charging me?”

And she said, “Of course.”

I asked for the president’s number.

I knew there was no way I would actually get the president. As expected, I got his secretary who proceeded to tell me I needed to call customer service. I said I already did that. The secretary told me that is where this type of complaint is handled.

So I decided to send an email to the president of Avis to express my concerns. I wrote that I couldn’t understand why Avis was charging me for renting a car with a dead battery that I wasn’t able to drive. Of course, the person who opened the email (not the president) has instructions to take care of such complaints. How stupid.

When I was president of a large supermarket chain and a customer ONLY wanted to talk to me, I took the call. You know why? Because if I got on the phone with an irate customer, I’ve already won because the customer is surprised to be actually talking to the president of the company.

The Avis customer service office eventually responded. It took about six weeks. The email said, “I apologize for the time it took to get back to your email regarding the condition of the vehicle. Providing good service is a major factor separating Avis from the competition. To learn that you were not provided the level of service you should expect from Avis was perhaps as disappointing to us as it was to you.”

The last paragraph said they were sending my letter to the Quality Assurance Department. The letter concluded, “We thank you for taking the time to bring this to our attention, but also to provide us an opportunity to show you the quality of our service. As a gesture of good will, we are enclosing two $50 gift certificates, which we hope you will use on a forthcoming Avis rental.”

How arrogant! What makes them think I will rent from them again? I wrote them a letter back and enclosed their two $50 gift certificates and told them I never wanted to rent from them again.

In my opinion, Avis made at least three major customer service mistakes:

Strike 1: The first person who took care of me at the airport should have had the power to say, “Mr. Gallegos, we apologize that your car didn’t start, and there is no charge for the car.” And that person should also have given me a gift certificate. It would have been over and I would have been satisfied.

Strike 2: The Avis 800 number. Instead of insisting the charge was correct because I had the car overnight, they should have credited me the amount of the charge. And they should have given me a gift certificate. Wasn’t it obvious that I couldn’t drive a car with a dead battery?

Strike 3: The third mistake was the way Avis handled my email to the president – six weeks to respond?! They offered two gift certificates to bribe me to come back. But by then they had lost me as a customer.

Customer Service Lesson: This problem could have been averted if Avis employees at the counter and in customer service had more training in how to treat customers properly. In this case they had a customer who was upset because a car wasn’t working properly. Instead of trying to make me happy, they insisted I had to pay for a car that didn’t start. And that’s why I am now renting cars from Hertz.

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Don Gallegos is the author of “Win the Customer, Not the Argument.” His customer service philosophy is, “The customer is not always right, but she is always your customer.” For more information about Don’s book, visit www.brigantinemedia.com.

Click here to read an excerpt from Don’s book.