As our working example for this article, let's use a window coverings business that opened some 10 years ago. The owners decided where they wanted the store to be, and what type of products they wanted to carry. Those were good first steps, but they stopped there.
During the last decade, this store has seen customers (and product lines) come and go. There is an old belief in retailing that one out of five customers moves each year. Actually, the most current information indicates it is a little slower than that. With the aging Baby Boomers, instead of 20 percent moving each year it is now 16 percent. We are, however, still dealing with a store that was designed for customers and a community that existed some 10 years ago. The point is that it all has since changed and many stores like our example are still aiming at a target that has moved.
Our effort today is to identify our customers; a statement that prompts the question, "Do we want to sell to the customer we have, or is there a different customer out there that we want?"
MAP IT OUT
Asking this question is necessary, for without information on the customer we are targeting we don't know what products to sell. Look carefully and all too often you will find a store that is selling a broad variety of items. Unfortunately, the product range is an odd combination: high-quality window treatments, inexpensive interior paint and middle-of-the-road accessories. In reality, each product line is aimed at a different target customer. Few stores can sell this variety and manage to get each of the various target customers to come into their businesses or invite their sales representatives into their homes.
If you want to cater to the customers you have you first have to know who they are. One of the best ways to gather information about your customers is by using a pin map. This research tool is a street map of your business area on which you ask each of your customers to place a pin indicating where their homes or offices are located.
The key to using the pin map method is that you use pins with different color plastic heads coded for the products your customers buy. You may give the blue headed pin to the customer buying the inexpensive interior paint, and the red headed pin to the customer buying a high-quality window treatment. You even can subdivide these categories according to price. For example, a green pin is a window treatment job with an average window being over a set a price, and a yellow pin indicating a less expensive window treatment job.
Coupling this information with similar answers from customers regarding home furnishings, carpet, or any other product or service area and you begin to get a customer profile. This information also tells you where your customers are coming from. You probably will want to contact a real estate agent to gather information on specific areas, as well as drive through neighborhoods to get a personal perspective of the homes.
We should be able to see trends from our pin map quite easily. Using our example store with the varied, mismatched product lines, we likely will see customers coming from a certain area to buy the inexpensive paint and from another area to purchase high-quality window treatments. The tough decision is deciding to aim for only one customer, as well as deciding which customer that will be.
The idea of adding complimentary product lines to a store's mix also can be complex. For example, if you were to decide to go with only the high-ticket items, you probably will want to hedge your bet by adding a new, upper-end paint line before you completely get rid of the old, inexpensive one. Then again, you may decide to keep the inexpensive paint line. These decisions can be made only by you, and by your gathering as much information as possible.
As with most businesses, you probably are not going to hire a consultant; you just have to gather the information, experiment, observe, and then make any adjustments necessary. Again, continuing to use the pin map allows you to accurately track the type of customer currently doing business with you.
As you get to the question of which product lines to add, you will find three of your best sources of information to be consumer magazines, sales representatives and other window treatment retailers.
In looking at the consumer magazines, take a close look at the ads for home interior products. Look in the fine print to see if the manufacturer of the product being advertised has identified the brand name of the other household items and wall paints in the ad. If the information is not there, give the manufacturer a call to ask them.
When you talk to sales representative, you are speaking to individuals who probably see more stores in a week than you could see in several months. Ask them who is doing the best job of packaging the complete sale. And as they name the retailers, visit these folks and see how they assembled the various brands they are selling. (For ideas on what to look for when evaluating a store, yours or a competitor's, see D&WC, March 2000.)
You also will want to take the time to size up your competition. Create a chart, first listing your store and your brands in each category. Then, list each of your competitors' and the brands they carry. One concern you should have, however, is that you are not turning your store into a clone of another store in your trade area.
With this information, you should see how each retailer is servicing a certain type of customer, as well as which customers are poorly serviced or not being serviced by anyone.
Does this sound to you like a complex issue? Of course it is. But, retailing continues to be a changing business. And the business that fails to survey the land and make the necessary changes is looking to service customers who last shopped in 1990. And that customer has moved!
Tom Shay is president of Profits+Plus Seminars, St. Petersburg, FL; (727) 898-7205; e-mail: TomShay@profitsplus.org; www.profitsplus.org