One Reason They Went Out of Business
I was recently walking the streets of Manhattan, on my way to a meeting. As I passed shop after shop, closed during the pandemic, and never reopened, I was saddened to see some of my favorite places, gone. Most of these retail businesses relied on foot traffic, and in busy Manhattan, this can produce sizable cash flow. But with a dangerous virus spreading, everyone in the city cautioned to stay home, and practically empty streets, it didn’t take long for business owners to decide it was time to close permanently. Most of these businesses relied on one source of revenue, the people that came in the door, and this is exactly what you must never do. As a direct response maven once said: “The worst number in business is the Number One.”
When I work with retailers, I push them to identify alternate revenue streams and get as far away from the number one as possible. This begins, by understanding the importance of capturing data, and using the data captured. I’ve found few retailers can discipline themselves to think in these terms, and will devote time and energy to this task. They might have drawers full of customers they’ve delivered to, but do nothing to treat these customers any differently than those who casually walk in and buy. I’ve been startled and frustrated seeing how much data exists even in businesses that do not actively capture, manage, and leverage it, yet this data is ignored. I’ve counseled retail business owners to have someone “working” all contacts the business has, on the constant lookout for suspects who can take advantage of their products, and create and build dialogue with each. Successful businesses that endure create multiple revenue streams and this process must be intentional.
I believe strongly in making your business, an “attraction” business where customers and clients self-select to do business with you. It is far easier to serve those already predisposed to doing business with you. That said, those who have already bought from you should be at the top of the list to nurture for additional purchases. You’ve already “attracted” them. However, here’s a newsflash. I also believe you should make constant overtures to suspects and prospects that have not bought from you, as difficult as that may be, because being in business is about letting others know the value you bring, even when you must jump over hurdles to do that. Your business should never have one source of customers and clients. During difficult times, you should be able to turn to List #2, List #3, List #4, and List #5 (as many as you can create) to present product offers, specific to those categories, and at a more refined level, specific to the individual name on the list.
High rents, low foot traffic, and a pandemic are certainly good reason to shift gears, but not a reason to go out of business entirely. As this city and others return to pre-pandemic activity, I hope to see businesses reopen, and new businesses emerge, but this time, more savvy and less dependent on the Number One.
