Q The majority of my business involves selling to trade customers with a small direct consumer element. I sell one product range at the higher price end of the market, which used to represent 30pc of my sales.
While the other 70pc of my business is performing well, this product range has collapsed completely.
I have tried everything and recently, through customer research, I have discovered that the end consumers view this as a luxury product they can do without.
Answer: Thank you for your email and the detailed information you sent. I have come across this several times recently. There are some product ranges and categories that customers have simply taken off their shopping list.
I note that the majority of your customers are trade customers, but no doubt they have changed their pattern because their end consumer has voted with their purse strings.
I was talking with a hardware/DIY businessman recently who had suffered badly since the economy has weakened. The owner was able to give me examples of some categories where he hadn't sold a single unit in weeks.
This had been a sustained pattern for three years. Regardless of what he tried, there were no sales. He even got a cheaper range of the same product, but even the new lower price was not enough to stimulate sales.
His solution was interesting. He looked at every possible replacement that would bring excitement to his shop and, indeed, that would be new to his town. He completely exited the old category and replaced it with two new product ranges he had never sold before in a brand new category.
It worked well from day one. His existing customer base embraced this new category. The message I took from this is that, unfortunately, customers have made decisions based on household budgets etc, to stop buying certain products.
As a business you have to continually analyse what is selling and what is not. Far too many businesses hold on to product ranges/categories well beyond the point when the consumer has decided they have moved on.
You must never stop analysing and you must never stop looking for the new "cash cow".
If a category shows signs of fatigue then try all usual promotional tactics to try and stimulate activity, but if there is still no response you must move on, and do so quickly so you don't miss a new opportunity.
View this as an opportunity to find a new sales growth and not bad news.
Question: I run a hotel in the west of Ireland, but I am struggling to compete with some of the aggressive pricing within the market place. We run a quality establishment. Can you advise on how we might react?
Answer: Start by identifying why you are truly unique and how you can differentiate yourself from others. Will it be through genuine customer service, a great food offer or even by running themed weekends and events?
The places we all like to stay in are those places that excel at what they are doing. All too often I visit hotels that are pretty average in what they offer. They are not bad, but they are not great.
If you are to attract customers in sufficient numbers and get a premium to reflect the effort you have put in, then you will have to clearly excel on one or more elements of your business.
A colleague told me a story recently about an experience they had in an Irish hotel. Having engaged in a brief conversation with the receptionist and told her they were on a relaxing hill walking weekend, he returned to their room after dinner to find a set of hill walking maps, the phone number for a local hill walking club and an offer from the hotel to make packed lunches if required. Now that is great service and a reason for guests to return again and again.
It would be a great idea to do some research with some of your customers and find out exactly why they visit you. Once you have identified why people are coming, build a robust communication and marketing plan based on this.
In your business, a lot of the point of difference would be created through your staff and whether it is the chef from the kitchen who regularly comes out and talks to diners or the room service staff who greet every guest in the corridor, then you are on the right road.
You just need to make sure you are doing an excellent job at communicating these messages by reminding your existing guests who have stayed with you previously what you are doing and encouraging new people to visit.
I was impressed at a hotel with a 10-foot rule. Every staff member greeted anybody who came within 10 feet with a smile and a word of welcome.
As a result, I introduced the same concept in Superquinn with what we called the three- metre rule – it's just a question of getting into the habit!
Question: I am finding it hard to motivate my staff since the recession took hold, what should I be doing to tackle this issue?
Answer: Happy staff equals happy customers. Typically where staff lose motivation, customer service levels and productivity tend to collapse in parallel.
As a business owner it puts you in a highly vulnerable position and could seriously damage your business. You must react quickly and the first solution to solving this may lie with yourself.
You seem to have accepted this over a prolonged period of time, and while I understand how this might have happened, it is a mistake. It is the responsibility of the owner to set the standard and ensure everybody else meets it.
Several years ago, I visited one of America's key large retailers Meijer's. When I visited them they had over 170,000 employees. Fred Meijer, the founder of the business, accompanied me on the store tours.
Even though he was well into his eighties, he was still active in the business. I couldn't help noticing that as we walked around he would stoop down and pick up bits of rubbish, he would never walk from his car to the shop without gathering trolleys and he would always spend time talking with both customers and staff.
All his surrounding competitors had equally fine stores but there was a "magic spark" that his staff had that all of the others lacked.
Fred explained to me that he had other people to run the business now and saw his role as that of setting the tone of the company and being the inspiration for others to follow.
Your role needs to change and then you should follow it up with practical steps like sitting down with staff to identify their frustrations, setting targets for them to achieve, running the odd fun event for staff and most importantly putting it on top of your own agenda.