It probably feels like yesterday when you were slammed with summer business — the phone ringing off the hook, your techs’ schedules filled with maintenance requests and repairs. Now that you made it through, you’ve probably been enjoying some hard-earned time off. Maybe you’re even going on one of those supplier vacations, right?
While you entirely deserve a chance to breathe, don’t make the mistake of cutting out work entirely. Even though it’s the slow season, there’s still much you can do to improve your store and get yourself positioned to leap into the coming pool season with full force.
With that in mind, here are my suggestions for the top 10 things you should do in the off-season to get your business ready for next season and beyond:
1. Create a Budget and Sales Goals
The slow season is a great opportunity to sit down with all the key people who help you and your business become successful. Get your accountant to run a cash flow analysis and build a budget. Plan for expenditures such as marketing and advertising and work with your manager on putting together sales goals. This will give you a road map of where your business should be monthly, quarterly and year-to-date. Create sales goals per month, week and even per day, and share them with your staff. Look back on your past year of sales — when did spas, pools, grills and patio furniture do especially well? Target these approximate dates for sales pushes among your staff. Be sure to reward those whose goals are met and exceeded. Employees love to be a part of a successful organization, especially one that shares that success with them.
2. Style and Flow
How well does your store flow with the consumer? Is it shoppable? Are your customers really shopping or are they standing at the counter waiting for you to help them? If you answered no to any of those questions, you need to do an analysis of your business. Pretend you’re the consumer and ask yourself: Does the layout make sense? Does it “departmentalize” by transitioning well from department to department? No matter how small or large a store you have, the flow is important. It has to make sense in order for your customers to feel comfortable to browse, shop and buy.
An important note here: You do not always need to remodel or re-rack your store. Many times, all you need to do is reposition a few shelves and create “road blocks,” which prevent customers from walking in a straight line. In other cases, you just need to add “castle” items, which are items that grab customers' attention.
3. 12-Month Marketing Plan
Every retailer needs a well thought-out plan on how, when, where and how much you will spend on marketing. This is crucial to the success of your business. Don’t wait for the weather to change to start thinking about spending on marketing. I suggest starting off by planning in-store events. Think of these differently than sales — they’re fun events that get your customers to your store. I would start with five events, a theme for each and a loose idea of when they may happen (you don’t need an exact day, but a month is helpful). For example:
a. VIP or customer appreciation event (preseason event)
b. “Kickoff to Summer Savings” event (start of summer)
c. “Summer Saleabration” (in-season event)
d. “Fall into Savings” (end of the season event)
e. End-of-the-season selloff (clearance event to make room for new items next year)
Put together a marketing sheet that outlines what the event is and what products will be promoted. Be sure to budget for signage, balloons and other in-store POP.
Finally, make sure your suppliers are aware what products you are promoting and if you need their help for the event. They may pitch in with manufacturer coupons, which you can offer as “deals,” or suggestions for ways you can use your co-op dollars to increase the success of your events. (And don’t forget, some manufacturers have their own events or “dealer days,” which you can use as cornerstones for your own sales events.) By keeping everyone on the same page, you have more people in your corner helping you make your events successful.
4. Merchandising Strategy
Now that you have smoothed the flow through your store and developed a marketing plan, start on a merchandising strategy that highlights the items that you are promoting, or the items you want to sell. In other words, use those endcaps to highlight the monthly specials, new items or the items being promoted at that time. This is what some of the best retailers, even grocery stores, do in an ongoing basis. (You see those big displays of soda, chips and other snacks at the supermarket around the Super Bowl? Or pumpkin pie ingredient displays around Thanksgiving? It’s the same concept.)
Use your floor space for stacks of buckets or tabs to promote chemical specials. Make sure the items you are promoting for the month are displayed prominently, and then stock an “upgrade” item in an adjacent position. “Upgrade” items could be larger sizes, better quality items with more features, etc. Positioning the deal item and the upgrade option side by side makes it easy for consumers to compare and decide what they want to buy. In addition, make sure that your profitable items are at eye level. Seventy-five percent of consumers buy product based on shelf location more than any other factor.
5. Retail Pricing and Profitability
Every retailer should evaluate their retail pricing strategy on an ongoing basis, but at the very least, it should be reviewed annually. There’s a lot to consider here, but here are a few notes:
a. When doing your review, you should base your pricing structure on profit margin, not markup.
b. Every item needs to be considered, especially the commodity-based items that are advertised by the big box stores and online retailers. Other items like parts, one-of-a-kind and impulse items should demand a higher profit margin.
c. Understand that there are consumer thresholds in pricing such as $1.99, $4.99, $9.99, $14.99 and $19.99. These are typical retail selling prices that are not shopped heavily and are considered impulse buys.
d. Make sure you have new, unique and entertaining impulse items in these pricing groups. This makes your store seem fun and affordable.
6. New Product Lines and Products
New products are one thing, but don’t forget to look into new product lines that complement your business. If you are a pool builder, items such as outdoor kitchens, grills, firepits and casual furniture are in your wheelhouse. If you are already doing those, look into landscape lighting, outdoor electronics or even ponds and other water features. As for new products, think cool, new and unique. Consumers love to see what is new and different; they may not always buy these items, but they make great talking points in your store. Lastly, don’t forget fun! Look for items that help dress up your retail showroom and make your store an exciting destination.
7. Employee or Ongoing Training
Spend time creating a new employee training program. Don’t let your new hires be baptized by fire by throwing them onto the floor to learn as they go. Put together a daily schedule of what each new employee is expected to do and learn. I’d suggest making it a two-week schedule that lists day by day what they’ll learn, from water chemistry and chemical handling to managing difficult customers. (And perhaps the most important lesson: how to tell a customer, “I don’t know, but will find out.”) At the end of the two weeks, have them take a test by role-playing customer scenarios with you. Do the same with repeat or seasoned employees, but make it more advanced. Speaking of your veteran employees, don’t forget to keep things interesting for them. Give them new responsibilities in the store, and if you can afford to, consider sending them to industry trade shows or distributor shows, like POOLCORP’s Retail Summit. If you can, get your tenured employees CPO-certified to make them true experts in their craft. Trust me, you and your business will win in the end.
8. Update Software and Computers
If your business is not already computerized, you should consider making the investment in reliable POS software that will fully integrate your water test lab, service routes, online ordering and accounting. There are several companies that do a remarkable job helping businesses streamline their organization, consolidate databases, payroll, backup data and a whole lot more. Best of all, using this software helps you gather data and marketing information on each and every customer, which you can mine for more tailored marketing efforts. Make sure your credit card processing is EMV compliant (aka: get chip readers) to protect your business from the liability of fraud. The slow season is also good time to evaluate your credit card processor and look at reducing the fees that you pay to them. For more information, contact your credit card processing company to get all the new information and regulations.
9. Data Mining
Dig into your sales history details and study up on trends in your business. What are consumers buying the most from you? What are they buying the least, or not at all? Find customers who have not been in your store in the last six, 12 or 18 months and send them a special letter or offer to try and draw them back to you. Look at customers who buy chlorine but nothing else from you. What about those spa customers who bought a tub from you and were never seen again? Who is your best customer? Who are your least profitable customers? Looking for trends allows you to put consumers into “buckets” and then market directly to them. (Which is even easier to do with top No. 9.) This research is a great way to understand your market and allows you to better serve and sell to your current customer base.
10. Succession Planning
It is never too late to look at what you are going to do with your business. As my grandfather always said, “You start a business to sell that business.” And it's true: One day you will need to do something with it. Whether you are going to sell it to your son, daughter or grandkids, sell it outside the company or simply close up shop, there needs to be a plan and an exit strategy. Of course, there are many things to consider.
a. Are you selling 100 percent of the business and carrying the paper?
b. Are you going to sell it to employees as an ESOP?
c. What about diluted ownership? Who then will secure loans and payment?
d. What is the business worth and what is fair?
e. And what about your legacy?
This is a very emotional decision and one about which you should get professional advice. When done correctly, a smooth transition can take three to five years, which is why it is important to start planning earlier rather than later.
While you should still take some time to relax during the off-season, don’t slow down to a stop — as I outlined above, there’s still plenty of work to do! If you have any questions along the way, feel free to contact me: Ted.Lawrence@poolcorp.com