Retailers Facing Cashflow Problems
This article is a reprint of a training I did, responding to a friend in crisis in her business (and therefore in her personal life).
It's evergreen... it works no matter the season, the product, and it works for most types of businesses.
I got a message today from a friend.
Apparently she's has had some really bad financial problems and is barely hanging on. She has a small amount of cash on hand from a business loan that she can’t use for personal expenses.
I had no idea… I’d have reached out sooner. I did reach out today.
She has a business. She has a small amount of working capital. Her business is somewhat expensive to run, but I think I understand that she’s got a good markup on her products.
Of course I wanted to share here the pointers I had for her because there are others here who may be going through similar circumstances. Quite frankly, this could be anyone (and I can think of a few more people I could share this with directly… so I’ve got more outreach to do today).
I can't think of anyone that this business exercise doesn't apply to -- there are a bunch of solutions in here for most businesses.
So here are the facts of the business -- adjust for your own circumstances :
+ Cash on hand: $2k
+ Recent shout-out from an influencer in her space: free (that’s about relationships!) and resulted in a large number of orders (so her immediate problem was solved... if only temporarily)
+ Trouble: the traffic and sales generated by the influencer will fade over time, unless the mention goes viral (not likely in this case)
+ Product: low average order value (estimated at $15 per order) but loved by all who purchase
+ Reviews: these are an asset -- we need to find out if there are reviews and / or user generated content we can tap into for marketing purposes
+ Email list: I assume that if there is an email list it is small or under-utilized
+ Facebook page: same as email list
+ Facebook group: I don’t think there is one
+ List of micro-influencers in the niche: need to make this list
First we need answers to some questions:
Audience: who are the avatars to target in marketing?
Exercise: make a list of the typical people who buy the product.
+ Why do they buy? (list at least 20 reasons why)
+ What do they like about the product?
+ Why buy from you and not “x” (name brand, competitor, something else instead of your product)
+ What are the benefits of doing business with you? (list at least 20)
There are probably 365 reasons to talk about your product… there might even be 730 reasons.
Make a list of as many different reasons for people to buy from you.
Here are some examples…
+ There is at least one holiday per month
+ Every living person you know has a birthday
+ Pets are people, too. When are their birthdays?
+ There are four season changes each year
You get the idea. Build that list, and talk with your audiences each day (or twice a day for 730 touches per year about why they need your stuff).
BUT (and as Pee Wee Herman said, everyone has a big BUT)...
Don’t make it about you.
How many times have I posted here, there, and everywhere about how weak the “Shop Now” or “Buy Now” words.
Everyone’s favorite word is “me”.
When you shift your thinking to using your audiences members’ favorite topic (them), you will never want for anything, ever again.
There are numerous ways this business problem can be solved once and for all by increasing the business’s average order value, plus a few more tweaks.
A single purchase in this case is about $15.
Business is located in a large city (at least 1 million people).
Here are seven ideas just fired off the top on increasing average order value. And these will work assuming the business numbers are correct -- in profit. Remember “we’ll make it up in volume” doesn’t work if you’re only making a 50¢ profit per item. There’s no room to breathe when margins are too slim.
1. Delivery (within a certain number of miles): free when you order 5 or more
2. Shipping: free when you order 6 or more (in this case the item is a food item that can be frozen -- make sure to include the cost of dry ice packs and insulated packing into the costs of this type of order)
3. Upsell on the order page or by phone: ALWAYS ask “would you like “x” with that order?” (another of the same, or another similar item that goes with it). Side note: when shampoo bottles started including the instructions “rinse and repeat”, sales nearly doubled with no extra advertising expenses. Google that -- true story).
4. Marketing must be a daily activity. The simplest way to do this is to talk about your products in niche-relevant ways, daily, many places
5. Reach out to people who have the capacity to purchase multiples of the item, regularly.
6. Offer a subscription option -- auto-order, monthly
7. Business, at its very core, is about relationships. Who else do you know, or could meet, who sells something that inherently goes with what you sell? How can you work together (not a legal partnership -- just a marketing project) to both sell more of your stuff to each others’ markets -- either a one-time thing, or on a regular basis?
I'll be posting this (or something like it) other places this week. Notice how I didn't even go into paid ads. Most of what I list here is just time, thought-effort, and a little elbow grease.
Do this stuff, AND do paid ads and you can set the foundation and then turn up the volume.
There are probably more items I could flesh out -- mostly about using social media and email to build a complete marketing strategy across the next quarter to five years.
Business owners: do not suffer alone.
Marketing is a pathway out of nearly any hole you're in (at least, any hole that money fixes). Money doesn't fix everything -- far from it. But it sure makes a ton of stuff easier to work on if the money is handled.