Google, Yahoo Expand Local Search: Ignore This And Your Business Profits Will Suffer

Business Development Consultant, Steve Pohlit, advises all companies to have a website with local search information now. The trends are clear. Conduct this experiment on your own. Simply ask 10 people how they would locate an apparel store, car wash, CPA, shoe repair shop, dry cleaner, attorney, etc. Even if they know the name of the business but do not know the address, ask them how they would find the address. There is a good chance 70% or more of the people you ask will say they search on-line.

The Wall Street Journal reports that Google and Yahoo are making major investments in local search “rushing to add more consumer information about local businesses”. Yahoo has and Google recently changed from Local to Maps which can be found at

Yahoo is building local town squares where users share information about local businesses. Google is accumulating local business information that is already posted elsewhere on line.

If you have a business, you must have domain name and at least one page that provides information on the type of business, products and services offered, location and contact information. Information about your business is going to be available on-line soon, if it is not already there. It is better for you to be in the driver seat as to what is published.

The cost of having an on line presence is no longer an excuse. The entire process can be accomplished for much less than the cost of a yellow page listing. In fact, I am registering domain names for $8.00 a year and hosting a web site can be done for $100 a year or less plus most hosting packages include an email and the ability to set up a blog. Essential design can be done less than $100 assuming the business owner gives the designer basic information. If you need additional information on setting up websites or hosting websites, email me and I will help you.

I have discussed the major opportunity for most companies is previous articles, but here it is again: use your website to provide detailed information about your business, offer visitors a reason to register with your business and then develop a communication strategy with your subscribers. This process will increase revenue and profits. It will dramatically increase revenue and profits when you also capture the contact information of people physically visiting your business and people buying from you. That is the entire basis for the business model presented at The principle applies to national companies as most market to their customers in local communities.

Here is one example of a national restaurant business headquartered in Tampa, Florida. Most people are familiar with the name Outback Steakhouse. You may not know the names of their other divisions which include: Carrabba’s Italian Grill, Bonefish Grill, Roy’s and more. The St. Petersburg Times reported that Outback was concerned about the performance trends of their flagship business, Outback Steakhouse. To further understand the basis for these trends, the company hired a consulting firm to study trends and evaluate customer perception of the business. It was not reported how long this study took or cost. It simply said it was conducted in 2005 and the results are being reported in 2006.

You can monitor customer reaction to your business daily without any special studies when you have a communication program in place. For example, in the restaurant business you could offer an incentive to come in and eat. That incentive can be tracked. When the customer who received the incentive in their email, redeems it you can link it to a survey. The survey can be conducted while they are in the restaurant or afterwards with a follow-up message that includes a big, warm thank you for your visit. This is not hard to do. What must be in place is a culture that reacts to what the your customers are telling you. They will spend money with you when they know you care.

Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue and profits by at least 30% in the next 90 days, please visit All articles published by Steve unless specifically restricted may be freely published with this resource information.

The A, B, C’s of Inventory Management

The A,B,C’s of Inventory Management

One might think the books have not been written, the software not developed and the knowledge base empty when reading some of the recent headlines. When the largest retailer in the world announces they are reducing the amount of inventory in their stores because they have too much, it crowds the isles, confuses the customer and delivers the wrong message, one might wonder why they have this problem. After all the best and brightest work there and they has not held back on investments in technology. So how does the largest retailer in the world get themselves in a position where inventory levels are excessive?

Inventory management is an art not a science. The levels of inventory are a judgment call based on the available information. Let’s review how it is supposed to work. Before we start, this brief lesson applies to every company that has inventory no matter what industry and no matter what size the company. If you think this does not apply to you then I submit you are exactly the person I was thinking of when I wrote this article.

The primary reason for any inventory is to use it or sell it to make money. If you have an inventory of spare parts for a machine that is 20 years old, you are carrying that inventory to make sure you can repair the machine if it fails. If you dispose of the machine you no longer need the spare parts inventory. If you are a restaurant that specializes in prime cut steaks, you need the inventory to match the projected customers for today and maybe tomorrow. If your projections are wrong, then you either run out of steaks or have an excess. In the restaurant business, there rarely is any need to carry more than a couple days supply of inventory. Restaurant suppliers generally deliver more than once a week. In the fashion apparel industry, inventory is seasonal. In the early Spring merchandise is already in the pipeline for Fall and Winter. If apparel merchants misjudge the style, color, or fashion trend of their customer, they will be left with merchandise taking up valuable retail space. Blowout sales are then used to get rid of it.

Good systems will tell you the quantities on hand, on order, days of supply, gross profit in inventory, inventory turnover in total, by category, by vendor, by item and a lot more. Good systems will automatically process replenishment orders for item that are considered basic or staples. However, people makes policy decisions. Policy decisions are ones like inventory turnover will be at least 4 or we will now carry a higher mix of higher priced items to attract a more upscale customer. Inventory policy decisions drive the organization to action to achieve the goals of those policies.

In my experience, effective inventory policies are a result of business strategy linked to business financial performance and liquidity goals. When there is no clear definition of the goals then how do you evaluate actual results? Actual performance is always relative to the targeted goal.

The following is a brief summary of the impact of less than optimal inventory management:

Sales goals can not be met if you have nothing to sell. Forecasted demand along with replenishment modeling are key.

Gross margin goals cannot be achieved if your actual inventory mix does not match your gross margin goal or your customer demand patterns do not match what you have to offer.

Liquidity goals cannot be achieved if inventory turnover is less than target.

A,B,C Inventory Management Plan

1.Establish clear sales and gross margin goals.
2.Develop the same goals by line of business, product category
3.Identify the A items in each category. A items are the ones that make up 80% of the sales volume for that category.
4.Calculate the gross margin for the A items by category. Calculate the variance of actual gross margin for the A items vs. goal. If the result is the same, your goals are likely too low.
5. Repeat steps 1-4 for inventory turnover. Be sure the turnover goals tie into you liquidity forecast.
6. Develop detailed action plans to improve the performance of the A items. Assign a time line to those action plans along with specific accountability for implementation.
7. Extend steps 1-7 to the B items. Include in your action plan a goal of identifying which B items should move into the A category. This is normally done based on buying trends and gross margin opportunity.
8. Calculate the total investment for each level of inventory (A, B, and C’s) Evaluate the actual return on investment vs. target. You do have a targeted ROI, correct?

Project Manager: Make inventory a priority. Many people can be involved but one person should be accountable. If you have concerns about status or progress, hire an outside professional.

Complexities usually flow into the picture when people begin to spend a lot of their time on what they view are needed support tools. Those can include staff, systems and procedures. While tools are necessary to achieve your goals, a consistent focus on actual vs. targeted performance of A items should yield enormous benefits.

Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue and profits by at least 30% in the next 90 days, please visit All articles published by Steve unless specifically restricted may be freely published with this resource information.

Practical Business Plans

Recommending a business plans is often a starting point for many advisors and consultants. The challenge is that there are nearly as many recommendations on how to do a plan as their are advisors and consultants.

The single biggest issue with planning is the horizon. Many suggest a 3-5 year plan. If and when that gets done, the plan sits on the shelf in most cases.

I developed The Profit System specifically for the purpose of guiding companies on how to achieve extraordinary revenue and profit growth in a short period of time. Clients are advised to think in 12 month chunks and then roll that back to what has to be done this week to achieve it.

In the process of doing this, a company must address what could derail the results. So the point of considering disasters is addressed, but you get there from a different direction.

Finally when you bring your targets, to what has to happen today, this week, this month that are required to achieve the 12 month goal and hold people accountable for achieving those interim results, amazing things happen.

This entire process is outlined in a mini course I developed that is offered at no charge. Register at

The follow was reported in another on-line business blog and is presented to offer the reader a balance in terms of business plan recommendations:

Business Plans

(begin article found on another blog)

Business plans are a must for any entrepreneurial venture. Every new and existing company should have one. They are the roadmap to future business success. They can also keep a business on course in the event of a change in the business fortunes.

There are many aspects to the creation of a good business plan, including finances, marketing, sales forecasts, expected expenses, and so on. By carefully assessing all of the details, a strong business plan can be formulated.

A business plan is a requirement for everyone from bankers to venture capitalists. They are also a useful exercise for you, as developing the business plan forces you to look long and hard at your ideas and projections.

Even with a good solid business plan in hand, many potentially successful business people still don’t live their dream of entrepreneurship. Held back by many factors ranging from being unable to secure financing to staffing and production problems, many companies simply don’t get off the ground.

While these difficulties are common to many businesses in general, some barriers are specific to the business person alone. One of these barricades to entrepreneurial success is fear of failure. Thoughts of marketing and sales problems, staffing issues, and changes in financial status and the economy pale in comparison to that trepidation. Fear can stop a new business before it ever gets started into the marketplace.

The business plan can go far to preventing self doubt by providing a guide to the business that is both direct, yet adaptable to changing conditions. Shortages of funds can be worked around through free media publicity, creative promotional ideas, and business blogging. Alternative financing can be used to bring need cash flow into the company. Hiring only the essential personnel and subcontracting the balance of the work to outside contractors, consultants, and virtual assistants can lower labor and wage costs.

The biggest stumbling block for most failed business owners is a lack of confidence in one’s own abilities. That lack of confidence in oneself, and the potential of the organization, can be overcome. While many techniques can be employed to get past the feelings of self doubt, we will consider one method here.

We will ask one question.

What’s the worst that can happen to the business?

Think about that question for a time. Consider what could be the very worst thing that could befall your business, and subsequently, your future. While some of the worst case possibilities are enough to drive anyone away from even attempting entrepreneurship, many if not most, are not. In fact, many potential disasters can be prevented through careful planning. Contingency plans can be put into place for implementation should the nightmares become real.

Simply looking objectively at the worst case scenario can help with the overall business plan. The worst that can happen to a business may not even be that disastrous at all. In fact, many worst case scenarios can be reduced in impact, or even negotiated into workable situations. Every business problem is not the end of the world or the company.

Once you know what is the deepest depth to which your company could sink, the issues involved don’t even look so bad. It’s much easier to work with a known factor than a completely unknown possibility. After all, the worst that can happen to your business, might not be so terrible after all. The fear of disaster is worse than the potential problem itself. Keep in mind that just because a problem could arise in theory, does not mean it will ever appear in practice.

Don’t let fear of failure stand in your way to business success. Let a strong viable business plan, that makes allowances for major problems, guide you and your company, to achieving all of your business goals.
(end article not authored by Steve Pohlit)

Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue and profits by at least 30% in the next 90 days, please visit All articles published by Steve unless specifically restricted may be freely published with this resource information.

Consumers Vote With Their Wallet

Your business will not learn you have lost the election until you realize the money is no longer being spent. Most of this attrition is preventable by following a few basics.

Consumer Marketing 101.2: Listen to your customer and ask them how you are doing meeting their needs and fix what is broken.

It is likely I am not a typical customer since I tell companies when I am happy or not with their products or services. It has been my experience that most companies DO NOT CARE or at least the people serving the customer do not care.

Not too long ago I had a problem with my laptop. Over the years I have purchased at least 10 laptops from one company. The last one is the last one. They accused me of a liquid spill and did not honor the platinum warranty for which I had been charged a premium. I will not bore you with all the details. Their customer service department didn’t care. End result – business lost. Lifetime value of this customer (me) is about $3,000 a year.

There is a service station close to my home with a car wash. I was working with a client near but not that close so I was driving a lot. I would spend about $100 per week at that particular station. 2 out of 4 times that I used the car wash – it didn’t wash. I have asked them repeatedly to fix the car wash. Each time they have given me free car washes or my car wash money back. I DON’T WANT A FREE CAR WASH …I NEED A CAR WASH THAT WORKS. Today was the end – I will not return. End result they lose $100.00 of revenue per week. I estimate their average customer spends $80.00 a month. If I owned that station I would consider me a valuable customer. They don’t care. When you see stores closing or changing ownership, just give the departing owner a sticker that says “I don’t care.”

Consumer Marketing…It is not about the headline, the copy, the web site, the direct mail piece or media ad. First and foremost,It is about how you treat the customers you have.

Author: Steve Pohlit, a business consultant who has helped companies in many industries including: retail, manufacturing, wholesale distribution, restaurant, real estate and trucking achieve increased profits. All information published by Steve, unless otherwise noted, may be republished without restriction with this resource box intact. For more information please visit

Search Marketing: You Must Be On The Top Three Pages

(This article was published by eMarkets and is very important information. More on search engine optimiztion in upcoming articles.)

Search Marketing: Coming Out On Top

APRIL 17, 2006

First page or bust!

According to iProspect‘s “Search Engine User Behavior Study,” search marketers should strive to get their natural results as high as possible on search return pages; 62% of search engine users click on links returned within the first page of search hits. A full 90% of users click on hits within the first three pages of search results.

Searchers seldom wander deep into results.

“The message to marketers should be clear, and the implications obvious,” said Robert Murray, President, iProspect. “If your site is not found on the first page — or within the first three pages of search results — you might as well be putting up a billboard in the woods.”

Search placement not only affects click-through behavior, it seems to have an affect on attitudes as well. Among search engine users, 36% believe that the companies whose websites are listed at the top of the search results are also the leading brands.

“[Many] search engine users ascribe industry leadership to those brands within top results, and believe them to be leaders in their fields,” said Mr. Murray. “Cleary, this brand lift is a critical element for brand marketers. It not only reinforces the importance of being found in the top results, but also underscores the need for collaboration between online marketers and their colleagues in brand management, as search is clearly no longer just for direct marketers.”

The study also found out what happens when users don’t find what they are searching for:

  • 41% change search engines or search terms if they do not find what they seek on the first page of search results.
  • 88% change engines or search terms if they do not find what they seek on the first three pages of search results.
  • 82% re-launch an unsuccessful search using the same search engine but with more keywords.

“Marketers make six figure investments in websites without any consideration for how that site will attract an audience,” said Mr. Murray. “It’s time that companies that are refreshing, re-designing, or launching a new website start with the end in mind. If no one can find it, no one will use it. It will be a wasted investment without a clear search strategy.”

For more information read the two new eMarketer reports, Search Marketing: Spending and Metrics and Search Marketing: Players and Problems.

Build Business Revenue by Answering Email

Mark Albright reported in the St Petersburg Times on statistics from Jupiter Research showing the length of time companies are taking to respond to email sent to customer service has increased significantly and 55% of companies with on line customer service take longer than 24 hours to respond. Even more alarming, nearly 40% of all such emails take three days or more for a response or are never answered at all.

In several previous articles I have detailed the opportunities for companies to grow revenue and profits by capturing and using the contact information of their customers and visitors. Now, we learn just how poorly companies are doing responding to customers who need help.

There is a major revenue building opportunity by just responding to the customers with questions and by using the customer contact information to develop a positive communication campaign. These two actions are the foundation of my Local Retail Marketing program which is a component of the Revenue module of The Profit System. But forget all those titles, this is just common business sense. All you have to do is not repeat the mistakes obviously being made by many companies out there and the biggest problem you will have is where do you want to park your yacht.

P.S. When you combine emails not being answered with first the long wait times customers experience when calling customer service and second with how poorly many of the calls are handled when once the phone is answered, the roadmap that you should follow is very clear.

Dunkin Donuts vs. Starbucks

Dunkin Donuts wanted to know. To find out they offered to send their customers to Starbucks and paid them to go there and drink and eat. But they also paid Starbuck customers to come to Dunkin Donuts to eat and drink. In exchange, the people involved agreed to answer Dunkin Donut’s questions.

This test was reported by the WSJ and what Dunkin Donuts discovered was that there are very loyal people to both businesses and they are not interested in the competitor. The Starbucks Tribe will continue to go to Starbucks and the Dunkin Donuts tribe will continue to go to Dunkin Donuts. That was the conclusion.

Why did Dunkin Donuts conduct this test? The business of Dunkin Donuts has a strategy of growing and attracting more customers. So they want to know more about what appeals to people. Of course they could have their customers in a data base and communicate with them regularly and offer them incentives for answering surveys but that is all the subject of my rant in other articles at

Duncan Donuts used a traditional focus group approach. Duncan Donuts is to be commended on testing. They are to be commended on wanting to know what changes, upgrades, new product offerings will appeal to their customer. When you review their history, you may conclude they should have done this more often. The facts are most companies fall into the trap of not reinventing themselves. Why is this important to do? Well, look at Kmart. Do you recall when they were in Chapter 11? How about Delta airlines and General Motors? Do you think Microsoft can be in trouble? Interesting to look at history and then ask the hard questions?

There are lessons to be learned from the work done by Duncan Donuts. I remember working with the leaders of The Limited when they were the premier retailer in America. The culture was amazing. New fashion ideas, new store formats, new promotions were always being tested. Merchandise managers were expected to bring their insights of what the competition was doing to the famous weekly Monday meetings where performance was scrutinized.

The point is every company has a development history and at a point in time if you become a champion, a challenger emerges. This is the like playing the game king of the hill kid as a kid. Whenever you are winning someone will be out to take your place.

How do you sustain revenue and profit growth long term? How do you do that when as soon as you are on top there is a challenger? In The Profit System I teach how to track information that tells you how you are doing. Initially, the information is developed for you to track actual vs. plan and the plan is your own performance improvement plan. This evolves to where you are confident in your ability to achieve internal targets, then you set your site on local, regional, national or international champions. At that point your goal is to be the champion. The Profit System is free.

Why is that? Why do I offer something that I promote as being so valuable for FREE when I should be selling it for a million dollars or 10 million dollars or more? Simple, I know this works, and as Joel Bauer says ( my life does not change at all if you use what I teach. But yours is likely to change a lot. If I can be a catalyst of positive change for you and your company, I am delighted to offer these principles and The Profit System to you at no charge.

Wait there is one more thing. There is a major price to pay for using this system. This price is your time, attention and action to implement. My material is FREE. Even if I were to charge $50,000 for the this material and I am considering that, it is a small sum in comparison to the time you and your company will invest to apply the principles of The Profit System. Return on investment is off the charts. So if you want to make a lot more money go to The Profit System and register for the FREE course.

Will Ducan Donuts™ latest testing mean new store formats will be hugely successful? I don’t know. I do know this if they keep monitoring and keep testing they will figure it out. You can also solve the issues facing your business with a rational management system. I have given you one source for a management system roadmap.

Sending you energy of health, happiness, prosperity

Steve Pohlit

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About: Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies.  Steve is a business owner and an expert business consultant focused on building profits and net asset value. He is very experienced with Internet marketing and social media marketing.  All articles published by Steve unless specifically restricted may be freely published with this resource information.

How To Diffuse A Competing Ad Campaign

Calculating return on investment of brand advertising is an art. When a commercial is run on electronic media, whether it is TV or radio, the methods used to calculate return on investment include ratings that measure viewers or listeners vs. sales in the relevant period following the promotion. Since I work with companies on more objective ROI calculations based on direct response marketing techniques, you might imagine I question the effectiveness of brand marketing.

An ad agency executive would probably give me a dissertation on what I am missing and it is doubtful we would ever reconcile. I remember the discussion with the Vice Chairman of a major international retailer on the topic of decentralized organized structure vs. a centralized one for administrative services common to multiple companies operating under the same corporate umbrella. It is an issue that is never reconciled. You either have one point of view or the other. There is no middle ground on some issues. I think brand advertising vs. direct response marketing falls into the category of irreconcilable differences between marketers. Back to Coke.

I must admit the most recent ad campaign is awesome. The scenes make me want to go out and buy the product. Correction, they make me want to go out and live the scenes. This is particularly amazing, since I watch very little TV and rarely react to an ad in terms of thinking of making a purchase. One of the current ads being run by Coke is where a senior citizen is shown experiencing Coke for what is supposed to be the first time. The experience of drinking Coke for the first time motivated him to call a childhood idol for the first time and tell her he has always loved her. It also motivated him to run with the bulls for the first time. All first time acts for him. Very well done.

Congratulations to Coke. This is a campaign that links the emotional response to the product. If others have similar reaction to this as me, then the sales numbers should being increasing for Coke during the running of the ad campaign. On the other hand, if I am a competitor I would quickly mass out an end cap displays in my A category stores in A category markets, with pricing at about $1.00 less per 12 pack of Coke and diffuse their entire campaign. Of course I would also attach a bounce back coupon on that same display and link it to a customer contact page on line. When the contact information is filled out, the customer receives additional promotions and gifts on line. Once I have that contact information, I then know I have a person who bought my product and that is a customer whose loyalty I can now nurture and strengthen. This is a strategy that capitalizes on the media ad campaign of a competitor and turns it to your advantage.

Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue and profits by at least 30% in the next 90 days, please visit All articles published by Steve unless specifically restricted may be freely published with this resource information.

Retailers Can Win Customers Without Struggle

Mark Albright, staff writer for the St. Petersburg Times published an article in the Sunday paper on retailers struggling to win back customers. He does an excellent job at identifying the key issues customers face when shopping in many stores. In summary, customers know what they want from their shopping experience and they don’t get what they want most of the time.

Two charts were provided in the article. One showed that 68.4% of those responding to a recent poll said knowledgeable, helpful, friendly staff was the most important criteria for a positive shopping experience. The other chart reported that 50% of the people surveyed reported retail service has gotten worse.

Shoppers have always wanted a friendly environment with knowledgeable staff. What is most alarming is how poorly retailers continue to meet the expectations of their customers. With almost 70% of the customers ranking knowledgeable, friendly staff as most important, why is it that so many retailers continue to be obsessed with having compelling price? Studies have consistently shown and Mark points this out in his article as well, that less than 10% of the shoppers name price as the most important reason they shop a store.

Let’s examine pricing and promotion a bit deeper. The paper that Mark Albright writes for has a daily circulation of 1.2 million. On Sunday, like all large metropolitan areas, the paper is thick. Most of it is advertising circulars. Most have between 4 – 20 or more color glossy pages and this format is used by most of the major retail chains. Stores attempt to show items attractive to the largest number of people and offer special buys or sale pricing. The goal is to drive traffic to the stores.

Normally on a store by store basis, retailers are able to tell how effective a particular circular was by measuring customer count (customers that actually buy), average sale and items sold. Most retailers have these statistics, but there is one critical piece of information they do not have. They do not know who it was that purchased something. They do not know their physical address, they do not know their email address and do not know their customer’s phone number. There are exceptions and I will address those shortly. However, in general, large and small retailers spend huge amounts of money on print advertising to drive customers into their stores and they don’t even know who their customer is. Consequently, they are unable to thank the buyers, hear their comments and suggestions and they are not able to personally invite them back.

Here is a brief summary of the issues so far: consumers want knowledgeable and friendly sales staff and over 90% of them place importance on knowledge and friendliness over price. On the other hand, retailers spend a lot of resources developing promotions based on price to drive traffic to their stores. When the customer gets there, not just the price shopper but the loyal customers as well, the retailer is not properly staffed and the staff that is working is not properly trained and managed. I call this a mismatch in expectations and delivery. The result of that formula is a high rate of retail business failure with stores that fail being replaced by new ones that operate the same way. You know what you get when you keep doing things the same way. What is the solution? Keep reading.

When the subject of price in retailing is mentioned, Wal-Mart’s name always comes up. Here are just a couple of things I noticed about Wal-Mart recently. First they are increasing the number of more upscale items offered. Why are they doing this? It is because they understand that appealing just to the low price crowd long term is a risky business model. No retail chain founded on the low price model has ever survived long term. None. What else have I noticed? The other day I noticed a Wal-Mart banner on the front page of This particular ad was what is known in the Internet Marketing circles and Direct Response Marketing circles as a lead generation ad. I followed it through and noticed interesting “bribes” to get you to register for on line information. You could even categorize the information you were interested in receiving. Wal-Mart promised to give you advance notice of their best deals for the store closest to you. Notice I said store closest to you. When you entered your information they asked for your zip code so they could match you with relevant regional promotion.

Wal-Mart is taking the lead again in building their customer data base. I don’t think they have taken this to the store level, which where it really needs to be implemented. But they are headed in the right direction.

Do you need to have Wal-Mart’s system to implement a similar program? Last September I was testing the implementation of program with a small retailer in a small market. You can review more of the detail of this program at We used incentives as a motivator to provide their contact information. This program was hugely successful in a short period of time and confirmed the value of capturing the contact information of your customers and communicating with them. That is the first step in bridging the gap between what customers want and what retailers deliver. Note: if you are a grocery store, restaurant, nightclub, shoe repair store, dry cleaner or any business that has customers, this applies to you.

If you are a local or regional chain of stores, outsourcing this customer contact program is the most cost effective approach. If you are not sure that is a true statement Email Me and I will prove it to you. National Chains should outsource this program in the test phase and then it is likely that in-house technology will be needed long term. Regardless, it is easy to build your customer list, easy to communicate with them and this communication builds loyalty and value. This communication process is the critical link that breaks down when this process is managed internally. In summary, outsource this entire program initially; bring the technology piece in house if and when that makes sense but keep the communication program outsourced.

Does all of this solve the problem of bridging the gap of what the customer wants and what the retailer delivers? Absolutely not! All of the fundamentals retailers are paying attention to today must continue. Having the right product in the right place at the right time is a good goal. Having staff properly trained and managed is a great goal. But this is the planet earth folks. When all the best logistical systems and human resource development processes fail .. and they will from time to time, a strong binding relationship with your customer will overcome any isolated execution failures.

Are there any examples of anyone doing this more right than wrong? I remember in 1996 when I was in my second year of operating an Internet Service Provider company that I founded. I was focusing on industries likely to benefit a lot quickly from using the tools of the Internet. One of them was mail order. I knew there would be huge benefits to catalogue retailers from using the internet. Of course when I contacted many of them and they had no idea in 1996 what I was talking about. So I let it slide instead of pursuing that idea along with a number of other billion dollar ideas I had in the early days of the commercial Internet.

Today there are numerous examples of catalogue retailers doing a great job of communicating with their customer base. Now the big gains are coming from the “brick and mortar” companies who are communicating like catalog retailers. Who are they? Well Circuit City gets my number one vote. Circuit City sends me wonderful emails in addition to their weekly print advertising circulars. Wal-Mart is doing a good job now that I am on their list. In the catalog retail business, the best is Fredericks of Hollywood. Don’t even ask me why I am on their list but they do a great job. There are other catalogue retailers that have an effective communication program in place. In fact if you order on line from any catalogue company and give them your email address, I would bet you start getting information from them. Even if you don’t order, sign up for some of these lists to see what they send you.

The biggest mistake made by companies that have you in their data base, is dropping your contact information when you have not purchased for awhile. I know of one very popular retailer with a huge mail order division that sends me tons of catalogues but not one email. When asked about this I was told I no longer receive emails because I am not a current buyer. But they continue sending me expensive to print and mail catalogues. Go figure! Recently I was talking about this issue with an author and speaker on retail industry issues and discovered the huge successes several companies are having by aggressively pursuing customers who have become inactive. However, you need to know your customer and have their contact information in your data base to execute any program including this one.

In summary, study the companies that are doing this well. Look at your own business. If you are not sure what I am advising you to do will work, call or email me and let’s “kick it around”. Click to email or go to Retail Profit System for phone contact information. I am so convinced that there is a great need for help in this area I have recently partnered with several business development experts and we have formed a new company that will provide the Internet marketing services retailers and others need. Look for a major announcement soon on this advanced service for helping your business dramatically improve revenue and profits.

Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue and profits by at least 30% in the next 90 days, please visit All articles published by Steve unless specifically restricted may be freely published with this resource information.

Problems Managing Corporate Sales Solved

The WSJ recently reported on the challenges Mike Hurd, the new CEO of HP, faced when he joined the company in 2005. In summary, there were 11 layers of management between him and a customer. In addition to slowing the sales development process, less than 60% of the 17,000 people in corporate sales were actually selling.

Candidly I was amazed to read this information. I always think that companies like Hewlitt Packard have the best and brightest in place along with a management system that results in maximum productivity. I often find such management controls lacking or missing all together in smaller companies but without having direct involvement in a business the size of HP, I just assumed they knew what to do.

Mark Hurd knew what to do. He restructured the organization, eliminated non performing staff and cut the buerocracy so that not only were people accountable for selling, they had the time to do it. He also selected one software product to track the sales pipeline. Is all well now? Changing culture the size of HP is not done on a dime. From experience, the fastest timeline occurs when information is used to motivate behavior. An international accounting and consulting firm that I was with for quite a while developed a complete product line named “Information for Motivation”. People do respond to what you inspect not what you expect.

Using the principles from Information for Motivation plus other resources, I developed The Profit System. The revenue module of The Profit System shows a company how to set up the sales management system for their company. Mark Hurd is using these principles with the software product he selected to track the sales process for HP. However, you don’t need a specific software product for most companies. I have successfully helped a number of large and smaller companies using Excel spreadsheets.

People have a tendency to spend a lot of time on which tools they should be using. This is a mistake in most cases. It is important to know when “good is good enough”. The goal of all of this meaning the sales management process is to drive revenue and profit. Compensation should be tied to the goal. When sales force compensation is tied to revenue you can expect higher revenue. But that does not mean you will book higher profits. For higher profits in the revenue model gross margin targets are what are key and don’t forget to account for the selling expense in the gross margin calculation.

ABC Management..I was fortunate to be trained in my first CFO position by a powerful business leader who taught simple but effective prioritization principles. To this day I think of most things in terms of A,B or C. Let’s apply that to sales force management. Who are your A customers and what are your A products? Now the goal that I have found to work the best is to have people spending 80% of their time on the A items and the rest their time moving B’s to A’s and C’s to B’s. In the C category if it doesn’t have the potential for being a B in a reasonable amount of time, often the best action is to drop the resources devoted to it.

Like many things in life this process is easy to write about and discuss, but harder to implement. But it is not that hard. With some effort on the front end there are big payoffs. In every case where I have helped a company install this process the benefits to revenue, gross margin and profit have been huge. There is more detail on this subject in my course which is free. Visit The Profit System if you want you company to make more money.

You know it the instant you see the person. It is apparent they have achieved an extraordinary measure of success and have the time to enjoy it. Steve Pohlit is an expert business consultant who developed The Profit System shows business owners how to achieve an extraordinary level of profit and the time to enjoy it. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue in profits by at least 30% in the next 90 days, please visit All articles published by Steve unless specifically restricted may be freely published with this resource box.