recent Summer Trade Show in Columbus, OH, the
Retailers Luncheon featured Bob Negen, WhizBang!
, as its keynote speaker (pictured at right). Negen, who also led two business classes
during the Show, gave an entertaining, heartfelt and informative presentation.
He started off by explaining his business roots. In 1981,
the recent sociology grad decided "I shop, therefore I can run a store.” He
liked to fly kites, and decided to turn his hobby into a retail venture.
His Mackinaw City, MI-based show did a pitiful (even by
1980s standards!) $17,000 its first year. The second year wasn’t much better,
and when he was down to just $200 in his checking account, Negen decided to
take action. He began with an informal poll.
"I went up and down the streets, asking all the longstanding
shop owners in Mackinaw, ‘What do I need to do?’” he recalls. "They told me I
needed to advertise.”
Negen decided to put an ad on the radio. He credits 106.7
WKPK (now known as WDTW-FM,
Farmington Hills, MI), as taking a chance and working with the fledgling kite
shop, even with just a $200 budget. "I still have the cassette of it,” he adds.
Negen and his youngest brother, Steve, decided to do air all
the ads their budget would allow on one Saturday: "Mention WKPK and get a free Flippy
Flyer” flexible flying disk. They figured it couldn’t miss.
"We open the doors, and we wait. And we wait,” he says. "We
gave away two. We spent $200 for $40 in sales.”
On the other hand, Negen says, "it was the best $200 I ever
spent in my life. It forced me to do things differently. I learned right then,
I couldn’t spend my way out of it. Instead, I had to keep trying, keep
learning, keep growing. I learned how to become a successful marketer.”
By 1999, the Mackinaw Kite
Co. was worth $3.5 million. Negen and his wife, Susan, decided to start
WhizBang! Training and sold the kite shop to Steve.
Negen points out that there are three ways to grow your
Get new customers.
Increase your average sale.
Increase the number of transactions per customer.
He is also a big believer in the Rule of Reciprocity (gone
over in detail in the book Influence: Science and Practice, by
Robert Cialdini). In short, the rule says that "GIVERS GET.”
"Ever go through a set of double doors, and notice how if
someone opens the first set, you’re compelled to open the second set for them?”
asks Negen. "It’s the rule in action. Social anthropologists contend it’s what
separates us from other species.”
To parlay the rule to your business, Negen says, "Start by
giving. What can I give my staff to make them want an amazing experience with
customers? To get people in the door, to the community? Then we lead with the
value proposition: What can you give to make people feel like they want to give
money to you?”
It’s what makes us sign up for a two-year contract on a cell
phone, join a Book of the Month Club or do other things where we have to give a
little first to receive in return. "You may barely break even on the first
sale, but you’ll break the bank on the back end,” he says.
Rather than focusing on a margin for every sale, Negen
advises, step back at the bigger picture. What is the lifetime value of the
customer? If they are happy with the experience a $30 sale brings them, won’t
they come back again and again?
"Say that customer who averages $30 per transaction comes in
six times a year, with a lifespan of 10 years,” he proposes. "That adds up to
an average lifetime value of $1,800. Does it change the way you do business
that everyone walking into the store is worth $1,800, provided you do your job
With the needlearts, Negen reminded attendees, relationship
is king. "You’re not only competing with the big box stores and the Internet,
but with the quilt shops, the cookware shops,” he says. "Your job is to create
passionate hobbyists. Longevity equals profit.”
Other gems from Negen’s presentation included:
• Throw away your coupons, and give away gift certificates
instead. "They treat coupons like trash. They treat gift certificates like
• Give out gift certificates at networking and social
events. "Hate going to the Chamber of Commerce meetings? Next time, walk in and
instead of just talking to someone about what you do, ask them ‘Do you know
anyone who needlepoints?’” Negen offers. "If they say ‘Oh yeah, my sister
does,’ for example, give them a certificate to give to her. The most likely to
buy are more likely to buy.”
• Not knowing your shop’s neighbors is a big mistake. Negen
advises walking your business district. "Ask people what they do. Put the rule
of recipcrocity in play. I can send people to you — and they can do the same. ‘Do
you know anyone who knits? Yes? Here’s a gift certificate to give to them.’”
• Instead of a cash donation for a cause, give a group $5
gift certificates to distribute and pledge 20% of their redeemed total sales.
Bonus: media coverage through a photo and press release adds to the success for
• Try an endorsed mailing, where another local business (quilt
store, jewelry shop, garden center, etc.) endorses your business in a VIP
letter to their customers — with a gift certificate to your store. "What’s in
it for them? Their customers are going to think they bought them as a special
‘thank-you,” Negen says.
• Keep competitive store hours. "My wife, Susan, buys yarn
at a shop in Minnesota because she works till 6 and the two shops near us close
at 5:30. You have to earn the business,
stay open late to let people who work late come and spend money,” he says. "If
you don’t meet your customers where they live, so to speak, you have that
right... but you also forfeit the right to complain.”
WhizBang! offers the "Retail Mastery System” of DVDs with
more tips, training, ideas and even template kits to garner more sales for
small businesses. For more information, visit WhizBangTraining.com.