Friday 30 September 2016

Problem solver: My wife and I work long hours but are just getting by

Feargal Quinn

Published 04/06/2015 | 02:30

Feargal Quinn
Feargal Quinn

Q: I am running a small retail operation and my wife and I are able to take a salary out of it by working pretty long hours and the business breaks even. We are beginning to tire and are looking for some inspiration.

  • Go To

A: I meet people in your situation quite a lot who have got their shop to a sales level which makes it barely viable for them to take a salary out of it but leaves nothing left over. Usually, as you describe, long hours go hand in hand with this model.

I can give you lots of recommendations, however, a lot depends on your point of view and how willing you are to re-energise the business and yourselves. I could, for example suggest that you embark on a programme of promotional activity, improving the look and feel of your shop and generally stimulating your customers to a higher level of activity, however that is going to require some funding and certainly more energy.

It sounds like the business has got a little stagnant and you both are stuck in a slight rut. That is not going to change unless you do something. It would be worthwhile putting in some energy in the short term to allow you to drive sales and profitability upwards and possibly reach a point where you could employ someone so at least you could work more reasonable hours. I understand it is tiresome after such a long time, but allowing yourself and the business to stagnate will only worsen the situation.

Q: What is your view on rewarding loyal customers in some way?

A: Most modern loyalty schemes work on the basis of the more the customer spends with that business, the greater the reward they get. They are designed to encourage the customer to give as much loyalty as possible to that particular business and in return the customer gets a designated reward or benefit.

What you do have to be careful about is that customers who are not capable of a bigger spend are not discriminated against. For example, one customer buys a trolley of groceries every week and spends €120. A second customer on a pension shops three times a week and spends €20 each time. Both are loyal to that business and are spending the maximum amount that they need to on food with that retailer. The danger is that if the retailer only looks at total spend as the loyalty reward measure, then the customer on the pension is discriminated against.

A good loyalty system should take into account RFS: Recently, Frequency and Spend, ie how recently was the customer in the shop, how frequently do they come and what do they spend per visit? That is a far more balanced approach. There are also some negatives with loyalty schemes. Recently someone expressed their frustration to me about a local coffee shop who has a stamped card scheme every time you get a coffee. The customer keeps losing the cards, yet shops there every day of the week, each week of the year. Never once has the shop owner handed them a free cup of coffee even though they may well be more loyal than many other customers. In summary loyalty schemes are excellent but they need to be fair.

Send your small business questions to himself@feargalquinn.ie

Indo Business

Read More

Promoted articles

Editors Choice

Also in Business