'The Perils of Discounting' Article by Tina Zawila

In typical January style, the year seems to have started slowly for most retailers, as customers recover from their Christmas blow-out, try to repay credit cards and stick to their new year budget.

Therefore, we have fielded a few enquiries from business owners about ‘having a sale’ and ‘offering discounts’, in a bid to drum up business.   Whilst I fully understand their motivation, most business owners do not fully realise the dangers of discounting.  

Without going into lots of detail with the numbers, as an example, a business that operates on 30% gross profit margin, who offers just a small 10% price reduction, would need to increase sales by a massive 50% just to achieve the same profit levels!   Frightening isn’t it.

So what can you do to drive business instead?

·         Improve customer service – when customers are amazed by your service, price is usually the last thing on their minds.  Did you know that 68% of customers who leave a business do so because they believe the business owner and/or team feel indifferent towards them – that they couldn’t care less about their needs or about whether they purchased or not.  Make your customers feel loved!

·         Add value – Instead of discounting can you bonus in another product or service?  For example instead of offering a $30 discount, can you bonus in a product that has a perceived value of $30 but a hard cost of just $5?  That way, you have only shaved $5 off your profit instead of $30.

·         Educate your customers on the value of your product – One of the reasons why people shop on price is that price is the only thing they have that will enable them to compare products and services – but that’s because you haven’t told them the benefits that your product or service provides! 

For more information, advice and tips on how to stop discounting and increase your profits, call the professional team at Sothertons Gladstone on 07 4972 1300.

 

'Time for Action' Article by Tina Zawila

Happy New Year and welcome to 2015!  At this time of the year we are flooded with messages about new year’s resolutions, goal setting, and that this is “the start of a new 365 page chapter in your book of life – make sure it’s a good one!”. 

Lots of talk, now it’s time for action…

So how do you set yourself up for success in 2015?

1.       Review where you are now.  This first step is often overlooked, but sometimes you need to face where you are now to know where you want to be in the future. 

2.       Set goals – yes, an oldie but a goodie.  Stretch yourself!  Set at least one goal that will really challenge you.  Remember, unless your goals are written down they are just wishes.  They also need to be specific and with a deadline. 

3.       Motivation will get you going, but discipline keeps you growing.  Your new year’s resolution to “get fit” might get you to the gym in January, but it is discipline that keeps you going in April and it is discipline and consistency that will reap rewards.

4.       Monitor your progress – results don’t lie.  The road from point A to point B is rarely a straight line, so make changes or try something  different, if you are veering off track.

5.       Be accountable to someone.  Identify someone who has done what you want to do and find out how they did it.  Find someone who will make sure you do what you say you will do.  It’s sometimes easy to let your self down, but most of us don’t want to let someone else down.

These simple principles apply to any goals – personal or business.

At Sothertons we are passionate about helping you achieve your goals in business and in life.  Call us today on 4972 1300 to discuss your goals and how we can monitor your progress and hold you accountable to ensure your success in 2015.

 

'Which bills are companies least likely to pay….' Article by Steve Marsten

When you are a small business owner, having your invoices go unfulfilled is a real challenge and can jeopardise your long-term cash flow and business success.

This is the reason that many companies turn to alternative income streams like debtor finance. These can give businesses a much greater level of certainty in their operations.

For organisations that are concerned about their invoices being paid, a recent survey from Dun and Bradstreet (D&B) has given some insight into which bills are being ignored by companies.

The top invoice that companies are choosing not to meet is from trade suppliers – 37 per cent indicated that these were the bills that would most likely go unfulfilled if they were experiencing a shortage of cash.

Credit cards and phone bills also ranked highly (29 per cent and 10 per cent respectively), while internet, utilities, rent and loan payments all recorded between 5 and 7 per cent.

What’s more, these latest figures from D&B found that cash flow is the biggest concern that companies have, mirroring earlier statistics released in September on business expectations. This most recent study found that cash flow would remain an issue for 31 per cent of businesses.

Although there are clearly concerns for companies around cash flow and filling invoices, there was also some good news to come out of the survey. Among the biggest movements in these recent figures, D&B reported their sales index has risen to 36 points, up from 32 the quarter before and a lowly seven points this time last year.

The index for employment and profit estimates have also expanded, compared to recent quarters.

While businesses are clearly confident about the coming months, these concerns over cash flow and the possibility of missing bills will certainly be a concern for small business owners.

At Sothertons we believe in planning and assessing cashflows. Looking at alternatives to improve cashflows and identifying shortfalls that may require bank support. Call us on 4972 1300 so we can assist you. The earlier you identify the problem usually means the quicker it can be solved.

 

'The Silly Season Shopper' Article by Tina Zawila

By the time you read this our office will be closed for the year and our team will be enjoying  a well-deserved break with their family and friends.

Some of us (yes me!), who haven’t been very organised over the last few months will be using these first few days of leave before Christmas to frantically get their Christmas shopping done. 

Braving the shopping centre crowds and car parks. 

If you are a retailer, you should love the last minute shoppers.  We are usually in a rush, desperately looking for inspiration and will rarely shop around for a better deal.  All we really want is good old fashioned customer service!

If your frontline team are still smiling (despite being extremely busy), if they are willing to help and show compassion to the silly season shopper, you will win the sale.  It really is an opportunity for your team to shine and your business to stand out from the crowd. 

How your sales team engages with customers at this time of the year can make or break your Christmas sales and potentially sales in the new year.  Engagement starts from the moment the customer steps into the store. Team members who smile, say “hi” or “how is your day going?” immediately place the customer at ease.   If possible, don’t always lead with the traditional “can I help you” but instead mix it up with something more personal, direct and less rehearsed.  Such as “Is there something specific you are looking for today?” or “Have you seen our {stock item} they make great stocking fillers?”

And as for those of us who are doing the shopping…be patient, take a moment to consider others, including busy sales staff, and wear your best Christmas smile.

From all of us at Sothertons Gladstone, we wish you a very merry Christmas.  Our office will be closed from 4pm Friday 19^th December 2014, reopening on Monday 5^th January 2015.  We look forward to helping  you make 2015 your best year ever.  Call us on 4972 1300 to share your Christmas retail stories.