Monday, May 8, 2017

Is It Time to Start Thinking More Like a Retail Store and Less Like an Association?

            Many associations today are struggling with what to do about decreasing revenues from the sale of advertising, exhibits and sponsorships. Many continue to see a flattening or decline in the sale of these important sources of income and have tried ways to turn this trend around with limited success. But, as hard as the association marketplace has been hit with the effects of declining sales, no industry has been more impacted than the retail industry. We have witnessed the challenges faced by many of the largest store brands including such companies as Woolworth’s, FAO Schwartz and Circuit City which at one time were leaders of the market sectors and are no longer to be found. Other retailers have closed stores or shifted to online only sales. But, there are some retailers who have strongly survived and, in fact, have found new strengths in the changing economy.

            Michael’s is a national chain that sells a large variety of arts and crafts supplies as well as seasonal decorative goods to be used in consumer’s homes. These are large stores selling thousands of products most of which sell for under $10 each. So what is the key to their success? They have established themselves as the expert on custom framing and offer this service in each of their stores. I am an amateur photographer and when I have a picture enlarged that I want to frame, I head to Michael’s. The staff in the framing department is very knowledgeable about their line of frames and are extremely helpful to me in choosing the right frame and color of matting to bring out the best of my photos. They have a video system that can display an image of my photo in the exact frame and matting as the finished product will be, and the quality of the workmanship of the finished product is excellent. They are my go-to retailer when I need custom framing.

            Another store that I love is The Container Store. Here, they sell thousands of containers designed to hold all of my household goods for every room in my house by offering a wide range of product sizes and features each designed to help me keep my home better organized. Most of the products in the store are priced under $20, but they offer something that no other retailer offers. They sell two lines of custom closet organizing systems that maximize the space and functionality of each of the closets in my home. I can store clothes and other items in an efficient, attractive, and accessible way while maximizing the storage capacity of each of my closets. I go to the store with the dimensions of each of my storage spaces and a highly trained and knowledgeable person custom designs my space and then shows me a color rendering of how each wall will look. Over the years, I have done all of the closets in my home (as well as my garage) and have always found the experience to be positive. The products are very well made, durable, and effective in solving my home organization challenges and the personal touch of working with a designer adds value to the overall experience.

            What do these two stores have in common that makes them successful? It’s really simple. They require the customer to come into the store to purchase their most expensive specialty products. I can’t have my picture framed online. I need to bring it to the store in order for their framing expert to look at the photo and help me choose the best combination of frame and matting to enhance my picture. Although I can purchase frames from a number of online sources, I can’t receive the level of service that I get when I am in the store at the framing department and can see the many options that are available and how each will work best with my picture. I can also buy closet organizing products from other sources (both retail and online), but none offers the level of expertise and value that comes from going into the store, seeing the products on full display and receiving the personal service that assures that I get the right solution that will work for me, my family, and my home. Both of these successful retailers have found that by offering a higher priced custom service which requires the customer to physically come into the store, they increase their revenue, provide a service that is of great value to their customers, and take advantage of the customers’ presence in the store to sell them complimentary products. It’s a win-win relationship that is working for these retailers every day.

             I am not suggesting that associations open retail stores to stay competitive, but I am suggesting that associations look at this and determine the things they do best and which are also unique and valuable to their customers and prospects. These are some ideas on possible solutions:

            Enhance the relationships between your members and industry suppliers. Just like a customer has to walk into a Michael’s or Container Store to receive the best service, you should establish your association and its products as the best place for buyers and sellers to meet and where business is successfully conducted. Create an environment in all of your products where both members and vendors are welcomed and can interact with each other. Your convention and tradeshow are already doing this, but see how you can extend this model to your electronic and print products, as well. Each of them should be an inviting place for industry suppliers to inform your members about the products and services they offer.

            Provide the highest quality of service to your customers so that they want to come back and exhibit, sponsor and advertise again. Do all you can to assure that each customer gets the highest ROI on their investment in your products by maximizing the exposure of your supplier companies to your members over the longest possible period of time. You want your products and events to be the primary lead generator for each of your supporting suppliers. Your role is to create an environment that allows buyers and sellers to be introduced to each other in a welcoming atmosphere.

            Focus the efforts of your sales team to sell the higher priced products by training them on the best practices of relationship selling. The best sales people are not selling a product; they are providing solutions that meet the marketing goals and strategies of their customers. The most effective sales people listen before they speak. What are each of your customer’s unique challenges and goals and how can your products (either individually or as a package) meet those needs and exceed those goals? You want your association to be viewed as the “marketing partner” of each of your customers to assure their success in the segment of their market that your association represents.

I welcome everyone's comments and feedback on this posting.