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How to Win Business and Influence People Part 2: Be A Better Merchandiser

Featured on Inside Indiana Business

Read Parts 1 & 3 of this series by following these links:

If your goal is to show a positive return on your invested marketing dollars, there are three key elements of your strategy that must work in harmony — the math, the merchandising, and the messaging.  

In part one I emphasized how important it is to create a unique selling point or compelling offer so you can generate immediate response and track your advertising.  In part two I’ll focus on how important it is to maximize opportunities created by your advertising — also known as merchandising.     

Imagine this scenario: you operate a successful grocery store in a thriving neighborhood. Through a partnership with a local dairy farm, you have an exclusive opportunity to sell a very popular brand of organic milk for half the price of your competitors. A truly compelling and unique offer.

You capitalize on the opportunity and double your usual advertising budget for the month. You also quadruple your order with the dairy farm and create more space near the entrance of the store to display the milk.

The response is tremendous. Sales of organic milk triple, and your average sale per customer reflects this, but the increase in sales is exclusive to the milk. You also attract hundreds of new customers who are not regular shoppers, but you find a lot of them purchase only the milk. It appears your regular customers are doing their usual shopping and adding just the milk, and new customers are also cherry-picking your store for this one item. 

This is an example of a failure to merchandise. The failure occurred in a few areas. Although you were smart to increase advertising and the amount of product you ordered, you failed to capitalize on the surge in store traffic. 

Maximizing sales opportunities from customers ready to buy your merchandise or service is one of the least expensive tactics to grow your sales. 

By displaying the milk at the front of the store, you didn’t invite customers to experience the rest of your store and other merchandising efforts. If the milk had been placed at the rear of the store— you’ll notice that all dairy products are as far from the door as possible—you would have forced customers to walk the entirety of your store and be exposed to other selling opportunities. Who knows, half of the customers might have picked up two or three other items on their way to get milk! 

In addition to placing the milk in the wrong part of the store, you didn’t surround it with displays for complementary items such as eggs, cereal, and bacon, to increase your basket size or overall sale.

What if you own home service business, and whenever your coupon runs in the local newspaper you receive 10–20 calls — which is great and means you took the time to develop a compelling offer!  

However, the person answering your phone is not trained or prepared to handle leads, they think their job is to just to be a receptionist. In fact they are juggling several other duties as well as answering the phone.

They have no script, no process to follow, and no customer relationship software to record the caller’s information for future marketing opportunities. Half of the time, the calls go to voicemail.  This is a failure to merchandise by not creating a process to manage in-bound calls.  

In another example, let’s say you operate a furniture store, and from a pure merchandising standpoint the store is physically arranged to maximize sales in every possible way.  The hottest sale items are in the back of the store, there are multiple displays of entire furniture sets so customer can visualize what their new bedroom, family room or kitchen will look like.  

But, compared to some of the newer national chains who sell the same type of furniture, your store is dated.  The carpet is old, the lights are dim, the ceiling is low, and the parking lot has potholes.  This is a failure to merchandise by keeping your infrastructure up to date.  

Investments made into your physical and digital infrastructure are often expensive and difficult to commit to, but often pay dividends for many years.  So the cost essentially can be spread out over 5 or 10 years depending on the type of improvement.