The Retail Sales Bible

Okay, so today's post is self-serving, I admit. But we are excited that the day is fast approaching for the release of our next book - The Retail Sales Bible. This book is co-authored with a retail great, Rick Segal, who has published several books already including Retail for Dummies. It has long been my desire to take the basic concepts of the retail sales model I have worked with over the last 26 years and put it into a book.

If you are in retail, you know how complicated people can make the sales process. Too many times, people try and bring B2B models into retail. Rick and I both have a retail background, in fact, I am still in retail with a footwear business. (But that is another post) This has been an interesting project because I play the role of the book smart guy and Rick plays the part of the street smarts guy. Together, we form one very large smart guy. (Maybe I should say wise guy!)

In this book, we will introduce you to some sales techniques that have have been proven to work time and time again in building lasting relationships - which is the purpose of selling anyway! Most sales books are about "closing the deal." This one is about "making a customer for life."

If you are interested in being one of the first to receive this book, simply email me and I will make sure you are on the list for an autographed first edition.

I would also like to highlight a service we are both involved in called The Retailer's Advantage. This online community features advice and tips for retailers and is a terrific resource - especially for the independent. Check it out. You will find us on there as well.

Okay enough selling, back to culture and design....

Culture Sells

Our last post featured a video interview with a friend of mine, Tony Hsieh of Zappos.com. This is a name and company you will start to hear a lot about. They passed over the magic $1B threshold in sales.

But that is not why you should pay attention to them. In all our years of work, we have rarely seen companies take the principles of corporate culture and drive them as well as Tony does.

I first met Tony back in 1999, their first year in business. We spoke many times about how to sell shoes online. My advice to Tony then is the same to you today - do not try to sell online, try to be online. Okay confusing yes, But let me explain. If Zappos wanted to be successful at selling shoes online, they needed to take the experience of buying shoes in a upscale, independent shoe store - not some department store who has forgotten the true art of fit and service.

My example was Barnes and Noble. Amazon.com was first to the web with books right? Well, Barnes and Noble wanted to compete so they put up their own website. Only who is still the best at book sales? Amazon.com - the one who does not even own a book store. Simply put, they missed the most important rule - the one I shared above.

If Barnes and Noble had focused on bringing their store experience online instead of processing sales of books, then, I believe it would be a different story today. You know what I mean. The warm embrace of the store when you enter. the escape from the outside world you get when lounging in a chair in the back corner reading. Imagine if they had brought this online?

But the lesson for today is this - your culture is your culture. When you try to be something you are not, you will FAIL! People who interact with you in a store, need to get the same vibe and experience from you online. Otherwise, you are not only schizophrenic, but your employees start to lose focus on the true you - and your culture suffers.

That's how it happens. Slowly, over time. And then its gone.

Corporate Culture at Zappos.com

Here what our friend Tony Hsieh has to say about corporate culture.

Experience is the best teacher

It will never cease to maze me the number of people who worry about and fret over customer satisfaction int heir business. Do you know that a satisfied customer is simply one whom you have met their expectations? Did you also know that studies have shown that if you meet their expectations (i.e. have a satisfied customer) that they are only likely to come again and do business with you 50% of the time!

Hello! why do we care about customer satisfaction? What we need to be worried about is the customer experience. There is a huge difference. Why? simple. Even if you have the best policies int he world and the best prices and the best this and the best that, it is still dependant on people to deliver on those programs.

Walt Disney said it best, "You can dream, design, create and build the most wonderful place in the world, but it requires to people to make that dream a reality." Truer words have never been spoken.

When we spend time with a company its about how to improve the "experience" of the customer (or employee depending on the case) when interacting or doing business with the business. And what is the determinant of that? You guessed it - the corporate culture of the organization.

We need to build organisations that are more concerned with experiences than they are with numbers on a survey. If you have a strong corporate culture with the values of delivering remarkable experiences woven into the fabric of your culture, then you have a chance. But if you are like 90% of organizations our there who do not.... well then we thank you. You provide us job security.

Provide an experience and you will win. Just say that word over in your head and then let the thought sink in. Have you ever been satisfied at retail for example without an experience? Of course. All the time. But are you loyal to that place? no way. They have to exceed your expectations before you become loyal. and they exceed them by providing an experience.

Microsoft is in the planning stages of opening stores. They need to do this to push back against Apple. However, will they open a retail store or an experience store? Or will they open a retail store and call it an experience store like AT&T only its just an experience store in name only. My guess is Microsoft will be more like AT&T than Apple. But that's just me.

Did you know?

Thanks to those who put this on You Tube. Thought it would be a great entry to our blog.

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Harvard Business School Working Knowledge: 10 Reasons to Design a Better Corporate Culture

Q&A with: James Heskett and W. Earl Sasser

Every now and then, we find a great article and want to pass it along. This is from HBR.

Organizations with strong, adaptive cultures enjoy labor cost advantages, great employee and customer loyalty, and a smoother on-ramp in leadership succession. A book excerpt from The Ownership Quotient: Putting the Service Profit Chain to Work for Unbeatable Competitive Advantage by HBS professors Jim Heskett and W. Earl Sasser and coauthor Joe Wheeler. Key concepts include:

* Organizations with clearly codified cultures often become better places to work.
* An operating strategy based on a sturdy, effective culture is selective of prospective customers.
* High-performing organizations periodically revisit and reaffirm their core values and associated behaviors.

Organizations with strong, adaptive cultures enjoy labor cost advantages, great employee and customer loyalty, and a smoother on-ramp in leadership succession.

Editor's Note: Why is it that many of the same companies appear repeatedly on lists of the best places to work, the best providers of customer service, and the most profitable in their industries? In their new book, The Ownership Quotient, HBS professors Jim Heskett and Earl Sasser and coauthor Joe Wheeler assert the answer lies in recognizing that strong, adaptive cultures can foster innovation, productivity, and a sense of ownership among employees and customers. They also outlast any individual charismatic leader.

But how can you as a manager create and nurture that special culture? In the following excerpt, the authors outline the top 10 lessons of the best practitioners, from ING Direct to Build-A-Bear Workshop to Harrah's Entertainment.

We can learn a great deal from organizations whose strong and adaptive ownership cultures give them a powerful competitive edge. Here are our top 10 lessons.

1. Leadership is critical in codifying and maintaining an organizational purpose, values, and vision. Leaders must set the example by living the elements of culture: values, behaviors, measures, and actions. Values are meaningless without the other elements.

2. Like anything worthwhile, culture is something in which you invest. An organization's norms and values aren't formed through speeches but through actions and team learning. Strong cultures have teeth. They are much more than slogans and empty promises. Some organizations choose to part ways with those who do not manage according to the values and behaviors that other employees embrace. Others accomplish the same objective more positively. At Baptist Health Care, for example, managers constantly reinforce the culture by recognizing those whose actions exemplify its values, its behaviors, and its standards. Team successes are cause for frequent celebrations. In addition, BHC rewards individual accomplishments through such things as "WOW (Workers becoming Owners and Winners) Super Service Certificates," appreciation cards for 90-day employees that list their contributions to their team, one-year appreciation awards, multiyear service awards, employee of the month awards, and recognition of workers as "Champions" or "Legends" for extraordinary achievements or service. Managers at all levels offer frequent informal recognition and send handwritten thank-you notes (which stand out in the age of e-mail). Those who aren't living up to BHC's values soon get the point.

3. Employees at all levels in an organization notice and validate the elements of culture. As owners, they judge every management decision to hire, reward, promote, and fire colleagues. Their reactions often come through in comments about subjects such as the "fairness of my boss." The underlying theme in such conversations, though, is the strength and appropriateness of the organization's culture.

4. Organizations with clearly codified cultures enjoy labor cost advantages for the following reasons:

-- They often become better places to work.
-- They become well known among prospective employees.
-- The level of ownership—referral rates and ideas for improving the business of existing employees—is often high.
-- The screening process is simplified, because employees tend to refer acquaintances who behave like them.
-- The pool of prospective employees grows.
-- The cost of selecting among many applicants is offset by cost savings as prospective employees sort themselves into and out of consideration for jobs.
-- This self-selection process reduces the number of mismatches among new hires.

5. Organizations with clearly codified and enforced cultures enjoy great employee and customer loyalty, in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely manner.

6. An operating strategy based on a strong, effective culture is selective of prospective customers. It also requires the periodic "firing" of customers, as pointed out in our examples of companies like ING Direct, where thousands are fired every month. This strategy is especially important when customers "abuse" employees or make unreasonable demands on them.

7. The result of all this is "the best serving the best," or as Ritz-Carlton's mission states, "Ladies and gentlemen serving ladies and gentlemen."

8. This self-reinforcing source of operating leverage must be managed carefully to make sure that it does not result in the development of dogmatic cults with little capacity for change. High-performing organizations periodically revisit and reaffirm their core values and associated behaviors. Further, they often subscribe to some kind of initiative that requires constant benchmarking and searching for best practices both inside and outside the organization. For example, at Baptist Health Care, all employees are expected and encouraged "to search until they find 'the best of the best' in their area of expertise and benchmark against them (and possibly emulate them)." 1

9. Organizations with strong and adaptive cultures foster effective succession in the leadership ranks. In large part, the culture both prepares successors and eases the transition.

10. Cultures can sour. Among the reasons for this are success itself, the loss of curiosity and interest in change, the triumph of culture over performance, the failure of leaders to reinforce desired behaviors, the breakdown of consistent communication, and leaders who are overcome by their own sense of importance.

We have learned repeatedly that there is a pattern in the actions and activities involved in developing strong and adaptive ownership cultures. When an organization consistently builds and reinforces such a culture, it creates a competitive edge that is hard to replicate.

Corporate Culture in a down economy

okay, so we are not supposed to use the recession word, but it my father always had a saying, "it is what it is." So the question I just got asked today was, "can a high performing culture help a company maintain during the tough economic times?"

Simple answer - YES!!!! In fact, Tom Peters and Jim Collins have made millions of the study of this very topic. Built to Last (one of my favorite books and one I recommend everyone who reads this blog pick up) surveyed the companies that were able to handle tough situations including wars and economic depressions. Overwhelmingly, they found that the companies who had strong cultures rooted in solid values were able to stand the test of time. It was the weak cultures who practiced the "program of the month" mentality of business that failed. 

Many times, we have shared in this blog that a solid culture will sustain. Why? Because people within that culture do not act on their own gut or instinct; they act on the unified "gut" of the culture which is based in years of history and steeped in a rich tradition of contemplative decision-making. 

Its hard not to be reactive. I find myself fighting that battle all the time. And if your corporate culture is the collective values of its people, then you can only imagine why this is so hard. but today, I see too many people making decisions not based on the cultural value system, but on what they see their contemporaries doing. A CFO sees that a company has frozen all travel, so they think this must be good CFO practice, so they do the same in their company. However, their company culture is based face to face contact. And now the entire sales force does not know how to react because they know the new policy is in violation of their culture. 

Here is the rub. It only takes one decision like this made outside of the culture to start the ball rolling. And before you know it, the people start to revolt and the company starts to unravel. What's the moral of the story for today? Never, never, never make decisions outside of your culture. You may save a little today, but ti will cost more in the end.