An Open Letter from a Michigan Management One® Affiliate to his Clients

The following is an open letter that affiliate Ed Cloeter sent to his clients to thank them for their many recommendations.

I thank you retailers who recommend my services, almost as if, “You gotta have Ed Cloeter.” Well, it’s not all about me! I paint pictures of what your numbers say. I paint pictures as if each store is a “Paint By Numbers” set; brush red here, green there and yellow over there until a pretty picture or not so pretty picture emerges. You Plan is my guide. But -- who tells me what color to paint?

MANAGEMENT ONE® provides me with a palette showing me where to set my brush. In the arena of strategic planning, MANAGEMENT ONE® is very much in the forefront. Yet, it’s not all about MANAGEMENT ONE®! Admirably, in creating the “Paint By Number” picture for each store, they use the information that you, the store, has gathered from your customers. From that store, one of 27, had the highest profit percentage to sales. However, in this age of computers, its accuracy and expediency in forecasting your customers’ insatiable wants and desires can be gained within a day or two. Those outside of my “little covey” may wish to ask yourselves, “Do you Plan?” or do you just look at last year? Some of you once were on Planning. Did you trust and listen to its recommendations?

I mentioned that you, the store, provide information that creates your plans. But, it’s not all about you either! You are important. You have to be a good “picker”. You can’t just throw a lot of merchandise on the wall and hope it sticks. Those who use this method end up bringing out the scoop shovel, cleaning up the floor and throwing all the residue on the markdown tables. But who gives the store the fine bristles of the brush?

By now, you should have guessed it. IT’S ALL ABOUT THE CUSTOMER! In planning, the customers tell you what they buy, when they bought, what induced them to buy etc. etc. The customers record this on the sales slip or the POS system: the date, if marked down, whether it be a blouse, a 10-speed, a shoe, a putter or a gift including the amount they paid. When all this information is given to MANAGEMENT ONE®, it is scrutinized to draw the outline of the picture for us to follow. No emotional paint on their palette. You and I listen as to where the red goes, the yellow goes etc. and act accordingly so that your bank account is green.

More on Your Revenue (A Continuation from the June Informer)

Managing revenue is so important to success yet many owners fail to give it nearly as much emphasis as they do their costs. That is because costs are easier to get your arms around. Revenue gets broad “excuses” like weather, market conditions or a “we lost a key sales person” etc. There is no follow-up analysis to measure whether the impact of the weather or the other excuses was relevant, let alone a meaningful part of the revenue change.

One of the challenges in managing revenue is that it depends on so many things that happened months ago. The decision to add a product or buy according to a new strategy happened in the distant past. Managing revenue requires looking into the future and making good predictions which requires analytical skills many businesses don’t possess. That is where the value of Winning@Retail™ provides that glimpse into the future that allows the team to make better decisions now that will increase revenue in the future.

Another aspect of figuring out what another 10% in revenue would cost is the law of diminishing returns. Say, for instance, that you develop a marketing approach and spend an added 2% of revenue on marketing and get a 4% increase in revenue. Doing more of the same thing probably won’t have as large an impact. That is why Winning@Marketing is about driving a constantly changing marketing approach. You must constantly be reinventing your business to stay fresh and meaningful to the customers.

To be continued next month!

Management One® Client Stars

Affiliate Cathy Wagner (Chicago, IL) had 2 client stars last month. The Rhode Island Monthly named Elsa Arms the “Best Women’s Store” and ModMama was awarded “Best Children’s Store”. Congratulations to Cathy and her client stars!

Quote of the Day

"When you are through changing, you are through." - Bruce Barton