Maximize the Sales Power of Your Business Story

Whether you realize it or not, making a purchase is an emotional activity. When you browse among a number of sale items, most people will choose the product that makes them feel the best. The key word is FEEL. The way you feel is an emotion. A few examples of emotional responses are: happy, sad, cozy, secure, etc.
An item for the home might be purchased because it matches the surroundings perfectly and brightens the room (it makes you feel cheerful). Sitting on that sofa is so comfortable and cozy (secure). The car you are considering will impress the neighbors (proud). People buy things to satisfy their emotional needs.

Some words or phrases cater to these emotional needs more than others. Use these emotional trigger words in your titles, ads, emails, and sales pages to encourage people to buy. As proof, from which ad below would you prefer to purchase:

Ad 1) Sale, sale, sale! Free bonus – today only! Get a brand new XYZ Fishing Rod. Buy today and get our exclusive important fishing guide – Who’s catching What and Where. This handy guide is included Absolutely FREE! Easy Low Payment, Free shipping, Fast delivery! Your complete Satisfaction Guaranteed or your money back – no questions asked!

Ad 2) XYZ Fishing rod with fishing pamphlet – no charge to ship.

Both of these ads are selling the same thing. But, if you were like most people, you would prefer to buy from ad number 1. In that ad, all of the key words in the list below are used. Try using some of these words in your ads, sales pages, and emails and watch your sales increase!

1. Use the word "important" in your ad. People want important information that could change their life.

2. Use the word "guaranteed". It is reassuring to know that they are not risking their money buying a product that they won't like. They like to have some recourse if they are not happy.

3. Use the word "fast". People like immediate gratification and want fast results, fast delivery, fast ordering, etc. We value our time more than our money.

4. Use the word "easy" in your ad. We like things that are not difficult. People like easy methods, easy instructions, easy to use, easy payments, etc.

5. Use the word "free" in your ad. Everybody likes a free incentive to do business with you. Offer free ebooks, downloads, reports, etc.

Please excuse me now; I have to finish up here. You see, I saw an ad for one of those new XYZ Fishing Rods that I’ve just GOT to order…

As a retail sales operation in the brick-and-mortar business world, the greatest challenge is to increase sales with a limited amount of sales floor. In this article, we will address some of the factors that a business manager will need to address to maximize his or her sales from this finite resource.

The Sales Per Square Foot Metric

One of the metrics that large corporations use to measure their retail sales success in called "Sales Per Square Foot" or "Sales Per Foot" (SPF). Some industries and companies make this important calculation based on the square footage of sales floor, while others make the calculation based on the gross square footage of their retail stores, including warehouse and office space.

According to a review conducted by the BizStats website in 2004, on the sales of the top 100 retailers in 2003, the SPF differences between one retailer and another can be extreme.

For example, in the retail clothing and accessories sector, a store called Hot Topic excelled with $619 SPF, while number six Abercrombie & Fitch managed $379 SPF, and Goody's Family Clothing delivered a low $133 SPF. Hot Topic was the sector leader in retail stores that calculated their Sales Per Foot based on the gross space used by their stores. Of course, it must be noted that Goody's typically utilized sixteen times greater floor space than Hot Topic, but on the SPF measure, Hot Topic produces nearly five times the sales of Goody's within their limited space.

For this analysis, we are trying to pull brand names that most everyone will recognize, although this writer had never heard of Hot Topic.

In the electronics industry, we are going to look at Best Buy, Ultimate Electronics and Radio Shack's company stores. Each of these brands calculates their Sales Per Square Foot metric, according to their gross store space.

Although Best Buy is not the top of this sector, they delivered a more than respectable $830 SPF. Ultimate Electronics provided a $438 SPF, and Radio Shack's company stores met a $342 SPF. In the event that you have ever heard of Rex Stores, they finished this category, closing only $148 SPF. As you can see from this secondary example, the dollar figures that separate the top from the bottom are measured in increments.

For those who are interested in the fate of the big discount stores, Wal-Mart measures their SPF against their gross store space, while Target and K-Mart measure their SPF on the size of their sales floors. Wal-Mart was the clear leader among these three companies, with $422 SPF. Target delivered $278 SPF, and K-Mart managed to produce $212 SPF.

What Defines The Wide Range In Sales Per Foot Numbers?

The factors that divide the leaders from the followers in the retail industry can be summarized in three areas: advertising, product display, and merchandising.

* Advertising

Advertising is merely a tool that brings customers through the front door. One might want to argue that advertising is the most important of these three, but the SPF and sales per store figures dispute that idea. In the retail clothing and accessories industry, Nordstrom produced more than $37 million in sales per store (at $319 SPF), while Hot Topic (at $619 SPF), Abercrombie & Fitch (at $379 SPF), and Goody's (at $133 SPF) sold $1 million, $2.7 million, and $3.6 million per store, respectively.

* Product Display

Proper product display is handled through the optimum use of retail store fixtures and specialized product display equipment. Think about the difference between retail clothing-display racks at your local second-hand store and the Gap ($349 SPF).

The second-hand store buys discounted retail store supplies, display racks, and other store fixtures, then they stuff their clothing racks with merchandise. At the Gap, it is clear that the managers are more concerned with accenting the beauty of the clothing they sell, to enhance the likelihood of their clothing being purchased at a higher price. As a result, the Gap uses custom retail fixtures, metal garment racks, slat wall systems, acrylic holders, and display mannequins.

Adjustable rectangular racks are an ideal addition to any retail-clothing outlet that needs to maximize limited floor space. For stores that have more floor space than product, the round tubing racks (also called rounders) permit a more inviting display of clothing. The spiral costumer rack is another clothing display rack that attracts a lot of attention, as it displays clothing in a manner similar to a spiral staircase.

Revolving racks is another kind of retail store fixture that invites consumers to comfortably examine clothing and other merchandise from his or her stationary position. The advantage in specialty store fixtures and custom retail displays is that they permit the customer to examine the different product offerings at their leisure and in a way that showcases the individual products in their best light.

In a clothing store, mannequins are a nice addition, because they permit the retailer to bring a particular design to life. Since most clothing is purchased when the consumer pictures himself or herself in the clothing, the display mannequins help the consumer to take the mental leap towards seeing them dressed in the clothing.

For the clothing store that also provides jewelry products, the proper jewelry display products and jewelry display cases may mean the difference between selling hundreds of pieces of jewelry per week or providing another dust catcher in the store.

* Merchandising

Merchandising is defined as "activities designed to promote in-store sales, including shelf layout, counter cards, mobiles, point of purchase displays, events, etc."

For Wal-Mart and other discount stores, they find that space near the cash register is ideal for those low-cost, impulse purchase items, such as gum, candy, pop, magazines, etc. This is part of their merchandising formula to squeeze a little more profit from each transaction.

Wal-Mart and most grocers move their milk and eggs to the back of the store as a method of merchandising. They figure that if the consumer has to walk to the back of the store to get these essentials that people buy in a quick trip to the store, the consumer might just see another item in transit that they feel they cannot live without.

Grocers who cut their own meat generally provide a visual method for the consumer to see the meat cutters doing their work. This helps the buyer gain a belief that all of the store's meat is fresh, which stimulates the consumer's desire to buy meat at the store.

The Economics of Retail Sales

In 1991, Paul Zane Pilzer wrote a book called, "Unlimited Wealth: The Theory and Practice of Economic Alchemy." In his book, Pilzer commented on the fact that the definition of "economics" is that it is a "study of supply and demand in markets and how they allocate scarce resources."

Rightly so, Pilzer stated that technology and knowledge can reduce the scarcity of an item, by making it stretch further. This article has gone a long way to prove Pilzer's point of view.

If only Goody's can figure out how to squeeze $619 in sales per square foot as Hot Topic does, then they could improve their financial outlook by nearly five times.

If only Rex Stores could figure out how to match Best Buy's sales per foot, they could increase their yearly sales by five-and-a-half times.

The scarce resource in this case is sales floor, but by employing the right knowledge with the right technology, these corporations could literally generate five times their current sales and profits.

Where does your company stand in the SPF calculations?

In Conclusion...

All retail stores must seriously consider investing resources to acquire the retail store fixtures that can improve upon their bottom line. At $212 per square foot of sales floor, K-Mart was not able to avoid Chapter 11 bankruptcy protection, while Wal-Mart was setting new sales records at $422 SPF on gross store space.

What we are talking about here is as simple as maximizing the return on every square foot of retail shopping space. If a $100 product display rack can help a store generate an extra $100 in its own square footage, in a single calendar year, then that display rack will have paid for itself in short order. If that same $100 rack can increase sales to $200 SPF for its space, then it will have paid for itself in six months.

Even if a store commits to replacing all of the display racks in a section of the store every six months to one-year, that store will truly be able to maximize its profits and growth over the long-term. It makes good economic sense for a retail manager to invest in the technology that will allow for them to increase their sales per foot, and their retail store fixtures is the technology that they will need to achieve higher sales goals.

Whether you realize it or not, making a purchase is an emotional activity. When you browse among a number of sale items, most people will choose the product that makes them feel the best. The key word is FEEL. The way you feel is an emotion. A few examples of emotional responses are: happy, sad, cozy, secure, etc.
An item for the home might be purchased because it matches the surroundings perfectly and brightens the room (it makes you feel cheerful). Sitting on that sofa is so comfortable and cozy (secure). The car you are considering will impress the neighbors (proud). People buy things to satisfy their emotional needs.

Some words or phrases cater to these emotional needs more than others. Use these emotional trigger words in your titles, ads, emails, and sales pages to encourage people to buy. As proof, from which ad below would you prefer to purchase:

Ad 1) Sale, sale, sale! Free bonus – today only! Get a brand new XYZ Fishing Rod. Buy today and get our exclusive important fishing guide – Who’s catching What and Where. This handy guide is included Absolutely FREE! Easy Low Payment, Free shipping, Fast delivery! Your complete Satisfaction Guaranteed or your money back – no questions asked!

Ad 2) XYZ Fishing rod with fishing pamphlet – no charge to ship.

Both of these ads are selling the same thing. But, if you were like most people, you would prefer to buy from ad number 1. In that ad, all of the key words in the list below are used. Try using some of these words in your ads, sales pages, and emails and watch your sales increase!

1. Use the word "important" in your ad. People want important information that could change their life.

2. Use the word "guaranteed". It is reassuring to know that they are not risking their money buying a product that they won't like. They like to have some recourse if they are not happy.

3. Use the word "fast". People like immediate gratification and want fast results, fast delivery, fast ordering, etc. We value our time more than our money.

4. Use the word "easy" in your ad. We like things that are not difficult. People like easy methods, easy instructions, easy to use, easy payments, etc.

5. Use the word "free" in your ad. Everybody likes a free incentive to do business with you. Offer free ebooks, downloads, reports, etc.

Please excuse me now; I have to finish up here. You see, I saw an ad for one of those new XYZ Fishing Rods that I’ve just GOT to order…

By now you all know the power of business cards as a marketing tool. But you will be surprised to find out that not many people get to utilize all the real estate a business card has to offer and maximize its potential.

Although the primary role of a business card is to provide contact information, it can become a promotional vehicle if the second side of it gets utilized. The second side remains usually blank; instead, it should be used to announce discounts, promotions, and a list of the company's products or services.



Most of the time a company name or logo does not say much about the product or the service. At the same time the business card will be the only piece a lot of your prospects will file in their rolodex, and you will have to make sure your message is as descriptive as possible so that your prospects associate your card with you and your service in the future.

Do not distract them from your personal information by overloading one of the card sides. Instead, use side one to include the contact information as well as one line text outlining who you are and what you do. You might also consider prompting the card holder to turn it over by including a small command such as: Please turn Over, See Over for Special Offers, Turn Over For Important Information , etc.

The more informative the card and the more valuable the information is to your prospects, the higher the chances are they will keep it. Try to be concise, straight to the point and use graphics and illustrations that can summarize your points. Above all, have the target audience in mind when deciding on the content of the second side of your card, and consider the information you are providing them.

Here are some ideas of content for the second side of your card:

Promotions : Announce upcoming sales or specials. Drop them around town, staple them on receipts and include them inside shopping bags. Be generous. Your customers will share them with friends and will spread the word of mouth for you.

Pocket size billboards : Your message can be easily passed to by passers or visitors in a trade show. The more creative and informative, the more the chances it will end up in your prospects pocket for reference instead of be thrown away.

Referral cards : Create special referral cards and leave space so that your customers could write their information before passing the cards on. It is ideal if you are running a multilevel marketing team, an affiliate program, or have an incentive rewards program for referrals.

Appointment cards: Doctors, hair salons, mechanics, all use appointment cards to assure that their clients will be back. Find innovative ways to hand everyone an appointment card if your company service/product permits.

Coupons: Issue your own coupons and see sales skyrocket. It is a great way of tracking response of your promotional efforts if customers return a coupon in return for a discount. Create unique coupons for each campaign and do not forget to include �coupon code� if your company has the ability to sell online or over the phone.

Your resume, not your checkbook, should determine what size business you can own and operate. A case study approach will explain how to buy a much bigger company than you can finance on your own.

You've been very successful managing a company or division with full P&L responsibility and produced millions of dollars of profits. You've been well compensated and put some capital together. You're intrigued with the idea of becoming a business owner. You like the idea of being captain of your own ship and also want to create wealth for yourself and your family.

What kind and size of business should you buy? The best answer may be; the same size business you've been running for others. If you've been running a $200 Million dollar division, operating a very small company, may not be what you can do best or enjoy the most. But is it possible to buy a $200 Million dollar business when you've got a million dollars or less of your own to invest?

Very often, you can. Professional investors are very enthusiastic about backing a CEO with the right industry experience; especially if you're prepared to invest your own capital along with theirs. Furthermore the ownership that they'll allow you to earn by operating the business profitably will typically be much greater than the equity which you buy at the outset.

Let's consider an example. Carol is a division VP of a large manufacturing company. She has been involved in her industry for over 15 years. The division which she operates generates revenues of $230 million and contributes $30 million to the pre-tax profits of the corporation. Carol has built a war chest of $800,000 with which she would like to make an acquisition.

Through her industry network, Carol learns that the owner of one another company in the same industry, Valence Inc, is planning to retire and wants to sell the business. She knows the company and is confident that she could operate and grow it successfully. Valence has revenues of $165 million and pre-tax profit of $12 million. She believes that at the helm of Valence, she could increase both revenue and profit margins.

Carol contacts the owner of Valence, Doug Miller and learns that he has no heirs in the business. While the current management team is willing to stay on, Doug doesn't believe that any of them is ready to run the business. Doug has hired an investment banking firm who is preparing to put Valence on the market.

Carol remembers attending a seminar put on by Capital Results which specializes in working with entrepreneurial business buyers. After some initial meetings, Carol hires Capital Results to help her acquire the company. Capital Results will locate the investors and will also negotiate on Carol's behalf to maximize her opportunity in the deal.

Capital Results introduces Carol to several PE groups which have the potential to match up with Carol's interest. Carol is surprised to learn that there are hundreds of funds with a combined investment capacity measured in hundreds of billions of dollars. CR chooses a few funds whose interests correspond with Carol and the Valence deal based on industry, geography, deal size and several other considerations. Carol feels very comfortable with RMW Capital Partners. RMW understands the industry and Carol likes their approach. RMW appears enthusiastic about Carol's experience and her plan for Valence. Carol and RMW notify Doug's investment banker that they want to look at the company.

Valence's performance has been reasonably steady for the last few years. EBITDA for the previous year was $15 Million. Carol and Valence know that companies like Valence have been selling lately for five times EBITDA. They expect the other bidders to come in at around $75 MM. Carol is very confident that she can quickly improve Valence's profitability by $2MM by removing some inefficiencies. She is also confident that she can grow the business by at least 8% each year. Based on these projections, the partners at RMW are confident that they can afford to bid $80MM. This becomes the winning bid.

Carol and her new partners have extensively modeled the projected future performance. Based on their calculations, they want to borrow 60% of the purchase price and invest 40% as equity capital. Therefore, the equity required for the acquisition is $32MM. Carol's $800K represents 2.5%. The remainder is purchased by RMW. $40MM in debt financing will be provided by Junior and Senior lenders. Mr. Miller is taking a note for $8MM. The debt will be paid off using the profits of the company over a four year period.

RMW sets up an option pool whereby Carol and certain key managers can acquire up to 15% of the equity in the company at the same price being paid to Mr. Miller. Carol as CEO will get 60% of these options. Carol gets a salary and bonus package which is about 95% of what she was making in her old job. She is willing to defer some income in order to create wealth down the road.

Carol and her team make their numbers. They improve profit margins and grow the company by 8% per year. EBITDA was 9% of profits during Mr. Miller's last year. Carol improves this margin to 12%. There are enough profits to pay off all the debt in four years, so at the end of that period, the company is effectively debt free. At the end of 5 years, EBITDA is 29 million on sales of $242 million.

A strategic buyer offers to purchase Valance for 5 times EBITDA or $145 million. The bank debt has been paid off so while the price of the company has almost doubled, the value of the equity has gone up 450%.

Carol's 2.5% is now worth $3.6 MM. She exercises her options to acquire 9% of the company (60% of the 15% option pool). The options cost her about 2.9MM and are worth over $13MM. Carol's makes over $10MM on her options.

It's very important to note that while the gain on Carol's initial investment was excellent, the great majority of her gain came from the options. This is quite typical. Investors want to see the top executive investing their own money as proof of their commitment to and belief in the business. However they are willing to allow the executive to earn considerably more by achieving results. It's also worth noting that a few percentage points of cost reduction and 8% revenue growth result in a great return for the investors as well. After giving management the option pool, the investors receive better that a 40% ROI on their investment.

While lying on a sunny beach, a few months after the closing, Carol muses that she could have achieved similar results for her old employer. She would have been well paid in salary and bonuses. She might have put away another million or so by now. Then she laughs and rolls over to get some sun on the other side.

The numbers used in this case study are quite realistic for situations of this type. The real value is created by Carol's ability to grow the business steadily while improving profitability. Her skills are a perfect match with the Leveraged Buyout (LBO) scenario illustrated here.

Carol had the courage to leave the corporate nest and become an entrepreneur. She found the right advisor and the right partners to help her realize her goals. Finally, she kept her eye on the ball until the exit was achieved.

Want to learn how capture and nurture three-quarters of the sales lead market through effective communication efforts?

Whoa, you must first learn to slow down. Remember the story of the tortoise and the hare? Well, the same lessons learned from this fable can be applied to your everyday business-to-business sales lead marketing efforts.

While business-to-business marketers race to snatch up the most promising and qualified short-term prospects that come in from any marketing-lead-generation initiative, nearly three-quarters of the sales leads that can convert to sales are being heavily ignored.

Why? Because salespeople are measured and paid for winning the race for short-term sales, usually causing them to focus on the easy sales opportunities and to ignore the longer term prospects. And because there usually is no process in place, the job of nurturing, managing and tracking the longer-term pipeline opportunities falls by the wayside.

This lack of a sales leads development process may be costing your organization big bucks in lost sales.

Do you have the patience to move slowly and steadily for the sales in those longer-term sales leads? Or have you, in essence, ended the race to win these latter-day sales?

Industry experts estimate that only one-quarter of those who are going to buy do so in the first six months. Yet, roughly another quarter buys within a seven- to 12-month period, another quarter buys in a 13 to 18-month period and the final quarter will purchase sometime after 18 months. If your organization's concentration is on the first quarter, for quick selling turnaround, you are leaving the remainder of those sales leads (three out of four sales opportunities) out there for your competition to pick up.

These longer-term sales leads must be nurtured with a series of communications efforts designed to move prospects along in their buying cycles. In other words, the philosophy to getting your share of those future sales is simple-stay in sight, stay in mind and stay in the race.

Here are 4 questions to ask yourself when designing your sales lead nurturing programs:

1. How do we best deliver messages to the people who will influence or make the final buying decisions?

2. How do we stay with them as they move through their consideration and buying process?

3. How can we communicate in a way that addresses the prospects' issues and reduces the perceived risk of buying from our company?

4. What can we offer that will cause the prospects to engage when they are ready to move forward with their buying process?

Want to engage prospects and start a sales-winning relationship with sales leads? Here's how:

Use a series of ongoing communications-by mail, e-mail or phone-designed to keep pace with the prospects' information needs to make decisions about your kinds of products or services. I've found that, as an added benefit, sales revenue per customer is usually significantly higher for those who are included in the prospect relationship-marketing program versus those who are not.

Be sure to include multiple offers that appeal to all stages of a prospect's buying process. For example, if prospective customers are still early in their buying process, they will be more receptive to offers for free information in the form of how-to guides, white papers or e-mail newsletters. As prospects move further along in their buying process, appropriate offers may include those that require a higher level of interest or commitment on the part of the prospect. These include webinar invitations, demonstrations and checklists, and other decision-making tools. As prospects approach the buying ready point, they will be more receptive to such offers as longer, in-depth seminars, needs assessments or meetings with and getting proposals or quotations from your sales and marketing department.

If you use effective and efficient relationship communication skills and not just focus your company's efforts on the easy or short-term sales leads, you can pick up the three out of four sales that others are leaving on the table. And that's how you win the business marketer's sales lead race.