Keeping your market small

I brewed another batch of beer on Sunday. This time I decided to do a stout for the winter. I love the process of brewing beer, but the experience of buying the supplies was yet again very, very annoying.

First off, I do not care for the homebrew stores that are closest to me. I do not care for them at all. They are dirty, have terrible customer service, and are difficult to navigate. So, my expectations going into the experience were low. Very low, actually, because I called ahead to find out that they did not have everything I needed. The only store that had everything was over an hour drive away. I decided not to make the drive and set out for the store closest to me prepared for disappointment.

I my expectations were actually exceeded. Here's what I don't get:

• I don't get why they can't just simply sweep the floor. Buying grains means there are grains on the floor. Simply sweeping a few times a day would do wonders. Perhaps this is too much to ask, but I don't think so, since the guy behind the counter was watching videos online at the counter until I interrupted him with a question.
• I don't get why staff can't be (even mildly) helpful. I have been brewing for about 10 years, but I'm still learning. I asked what I thought was a simple question about brewing with fruit (which I've only done once with no success) and got a response so convoluted and filled with brewer's jargon that I was in worse shape than before I asked. When I asked for further clarification, I got a big sigh and referred to a book.
  
• I don't get why product can't get replaced in a timely fashion. The grains sit in big tubs in this particular shop. When the grains are gone, in theory, these get replaced from the sacks of grains in stacks on the floor behind the tubs. Of the 5 types of grains I needed, I found 2 were out. When I asked for these grains, I was told that they'd restock them "soon". Their "soon" must have a different reference point than my "soon" since there was no activity in that particular direction. I found the bag for one, opened it and took what I needed, but couldn't find the other.
  

On top of all that, I went home without everything I needed, because I already knew they were out of one of the hop varieties I needed, and as mentioned I couldn't find all the grain I needed.

And that was all just from one visit.

Ok, so I recognize that this particular shop is probably particularly bad. But having been to 5 different shops around the Detroit area, I can tell you that this is the norm, not the exception. Most people will say something like "Oh, its because homebrewers are such a small market" or "its just not viable as a standalone business in this market."

Sure that may be, but with "service" like this, is there really any question why?

Surviving the holidays

If you watch or read the news or generally have see any business news at all, you will see that the economic outlook for the holidays as we know them is not so good (particularly in the D). How will your business fare in this environment? I've got three ideas that will help you answer that question positively:

• CRM - Yep, those three magic little letters that are often hard to define. For the purposes of this holiday season (and beyond), I'd think of CRM as a tool for holding on to your current customers. To me, this seems of key importance right now. Doesn't now seem like a great time to launch a loyalty program? What about website revisions that make it more interactive? What about becoming more connected via facebook, myspace, or other web 2.0 sites? Do you currently have a system for customer feedback? Basically, the goal is a two way conversation that allows current customers to interact and feel like they are a part of your success.
  
• New Incentives - why do you have loyal customers now? (If you don't know, see Research below.) How can you tap into their loyalty to spread the word? Maybe a "bring a friend" incentive. Perhaps its time to do some impromtu sweepstakes, party, or other creative event to bring in new traffic. What companies are around you? What about a special incentive for their employees or a new supplier and family discount?
  
• Research - it may seem counterintuitive to be spending money on something right now that may not have a direct ROI calculation. These items are often the first to cut. However, I would argue that now is the PERFECT time for this. You have to better understand what consumers are willing to spend money on, why they spend their money with you vs. competitors, and what they "can't" live without. This doesn't have to be complicated. You could offer a gift certificate to get folks to come into the shop and sit down with you to talk. You could set up a short online survey using one of the many online survey tools (I personally like surveymonkey.com) or set up a new topic for improvements on your forum. I see this as an excellent the start to a conversation with your customers (see CRM above).

Any of these will give you something positive to present to customers, employees, and investors, rather than just the doom and gloom that all of them are getting anyway.

Bike Sales Skyrocketing

I recently read on M-bike.org that bike sales are skyrocketing. This is good news being related from a survey from Bikes Belong. Additionally, there are some very interesting details in the survey results that certainly would help with the service department at bike shop.

First, the survey highlights from Bikes Belong:

The majority of retailers who responded said their sales of transportation-related bicycles, accessories, and service have increased in 2008 compared to 2007:

• 73% said they are selling more bikes.
• 84% said they are selling more accessories.
• 88% said they are selling more service.

Is this increase in sales because of high gas prices? Most retailers who we surveyed think so:

• 95% of shops said customers cited high gas prices as a reason for their transportation-related purchases.
• 80% of retailers said gas prices were helping them sell more bikes for transportation.
• 86% thought accessory sales were getting a boost.
• 89% said they were selling more service because of high gas prices.

Sounds like good news? Well, it is, but the most interesting tidbit from this survey I think comes from the service side. The survey also found that a vast majority of surveyed shops believed that 75% of summer business was from people bringing in old bikes to be repaired, vs. 25% who shopping for a new bike. One shop is quoted as saying this is up from 50% in 2007.

As a shop finds their service sales increasing because of increased use of older bikes for transportation, the customer service in the service department may have to adapt to a new type of customer. Specialized shops that are used to the lycra crowd will have to make sure that their service folks are ready to respectfully and profitably serve those who don't know a sprocket from a spoke and just want a bike that goes.

Here are three key customer service items that shops need to make sure they're addressing:

• Match recommendations to the rider - If your shop specializes in tri-bikes, but you are starting to see older single or three speed bikes, make sure your techs know what sort of parts are going to give the best value (cost vs. performance) to these types of riders (or partner with another shop that you can endorse for these folks).
• Watch your mouth - Most techs are ARDENT cycling fans (this is great - they wouldn't be very good at their jobs if they weren't!). They tend to be able to talk very specifically about which parts are better for bikes. But customers who are switching to bikes for transportation are unlikely to be able identify specific Shimano shifters, and may not even understand some basics (like the difference between one-piece cranks and higher quality three-piece cranks). Make sure that all techs are assessing and talking with customers at their level, not the tech's level. If you don't think they can, have someone else talk to the customers.
  
• Service follow-up - it astounds me how almost no bike shops do follow-up to make sure the service experience was satisfactory. I've only ever had one shop follow-up with me after service. Yes, this can take some substantial time in the high volume months, but even if you just follow up with new customers, it gives you a chance to make a real connection with customers.

How does your shop service rate? Don't know? Try having one of your friends mystery shop your service department.

Reference:
"Bikes Belong Survey Report: Impact of Gas Prices on Bike Sales" - August 2008 - Bikesbelong.org (pdf)