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Being proactive about a mass merchant competitor

Remember the children's story about Chicken Little? She felt something fall on her head, and thought the sky was falling. She ran all through the town telling all what she thought was going to happen, only to be proven wrong; the sky was not going to fall.

As for the retailers in the music industry, the sky is not falling here either. In spite of the fact that everything you have sold for the past twenty years is now being sold by someone on the Internet, somebody else with a mail order catalog which is as thick as the New York phone book, and the new music super stores which are showing up all around the country, the end of the traditional music retailer is nowhere in sight. (And no, it is not true that 7-11 stores are going to add a music selection, other than the tapes and CD's they already sell.) The traditional music retailer will continue to not only exist, but thrive, as long as a tremendous amount of attention is given to several areas: extreme customer service, knowing how to variable price, and continual reevaluation of the product selection. Let's take a look at all three of these ingredients.

Extreme customer service - Ask a group of music retailers how they can distinguish themselves from their competition, and the first answer is usually, "We give great customer service". Are you really sure about this? As the owner, manager, or salesperson, when was the last time you shook a customer's hand and told them you appreciated their business? Or, when did the customer who had bought an instrument from your store receive a call to see how they were doing?

Think about where you personally shop; if either of these two situations were to occur, would you be apt to return to shop again with this business? As the owner or manager, the opportunity, and responsibility is on your shoulders for the education of your staff. From the experiences of this writer, a fourth generation retailer, a bi-weekly one-hour staff meeting is a sure way to provide the exceptional customer service.

There are also several sharp merchants who have taken this idea one step further by having a ten-minute meeting each morning just before the business opens. It is a chance to tell the staff of what new inventory has arrived, the new items you have ordered and when they will be in stock, as well as a reminder of what your advertising is. Extreme customer service is one of three advantages you can have. However, if all you can say is, "My customer service is as good as my competition", then your chances of distinguishing your business from the competition is greatly reduced.

Variable pricing - "My competition is selling it for what I pay for it. I can't afford to do that." Actually, you cannot afford to not do it. When the customer comes into your business, there are less than 100 items to which they have an idea about the price. However, if the first item they see in your store is the keyboard that the electronic big box is advertising, you had better be priced right.

If you are $100, or even $20, higher, the customer makes the assumption about your entire store that you are high priced. Is this fair? Maybe not, but it becomes the customer's perception. You can determine what these price sensitive items are by having someone shop the competition and by getting on their mailing list.

The bold store can even go a step further by posting the competition's advertisement in their own store and promoting the fact that your prices are the same.

You are not giving away your business, but are eliminating the opportunity for the customer to walk away. Remember, there are less than 100 items which customers know the prices of, and the rest of your store allows you the opportunity to make your necessary profit with the add on sale.

Product selection - What if you find your competition has too many items that you have to match prices on? You can, and should, change the selection you stock. You should also make a point to stock items that increase your chances of "selling up" or making an add on sale. Remember we are basing our strategy of competing upon our extreme customer service. Think about this scenario: A customer walks in looking for the keyboard we discussed earlier. The customer may even mention the flyer they received in the mail from the big box store.

The salesperson tells the customer he has the very same model, at the same price, and then asks why the customer selected that model. Listening attentively, he takes notes, and responds with, "I can see why you like that model. That's why we stock it. Have you looked at any other models?"

From this exchange, the salesperson earns the invitation to show other models to the customer explaining how they still have everything the customer asked for, but how they differ; perhaps with features the customer is not aware of, or features the customer may want as they increase their skill level.

As we move through this exercise, we have demonstrated all three skills necessary for competing in a competitive market. We are demonstrating extreme customer service by asking the questions of the customer to make sure they are purchasing the correct model. We have shown to the customer our ability to be priced competitively, and we have concluded by exposing the customer to models and makes that the competition does not stock.

The sky is falling? I don't think so. Why, I have right here, the forecast for the music retailer. The paper says, "Blue skies, with highs dependent upon the creativity of the store management. Little chance of rain, with the clouds which appear on the horizon staying right where they are."

The competition will continue to exist; it will probably even strengthen. But, the music retailer can and will survive, and even thrive, if he does not watch the sky to see if it is falling; but instead is busy watching over his business to take care of customers, price competitively, and stock the items that he knows he can sell.

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