Every business has competitors of some kind, and in most industries, it’s crucial to know what your competition is up to in order to ensure your own products sell. A great deal of information can be gleaned from researching your competition’s online presence, but there’s another tool you might consider adding to your marketing toolbox: a mystery shopper.
A mystery shopper is a trained observer with significant customer service experience who is hired to shop your competitors. Their sole purpose is to share information with you about their shopping experience. While most of this article will focus on the example of mystery shopping at brick-and-mortar retailers, the tactic can be useful beyond this specific industry from professional services to health care, real estate, restaurants, and beyond. You can also adapt the idea to industries such as construction and manufacturing.
Mystery shoppers provide value by helping you collect intel you can’t determine from an internet query, like the shopping experience, quality of products offered, or accessibility. This data will help you perform a Competitive Analysis – a report on who your competitors are and what they are doing, informing your business of where it can (or already does) stand out. A competitive analysis report should be part of your marketing plan, as it can help you optimally spend your marketing dollars.
Let’s say you own a fabric store and want to know what other stores in your area are doing. You can make a list of a few fabric retailers in the three zip codes around you, providing that list to your mystery shopper, who would visit each of the stores. You could also provide your mystery shopper with a list of questions or a checklist of what to observe and/or purchase. The mystery shopper will take detailed notes about their experiences at each retailer and report their findings back to you.
From your mystery shopper’s notes, you can determine a variety of things, like:
- how their storefront looks and what their curb appeal is.
- if it was easy or not to find parking.
- what their opening hours are and do they open on time? Is there a queue of shoppers waiting to get into the store? Are you required to schedule an appointment to use their services?
- Did employees provide a greeting when entering the business? How friendly or approachable are the employees?
- How does the store look? Is it crammed full of items or sparse?
- What kind of displays do they have and how attractive are they?
- Is their inventory broad, deep, or both? What type of items and brands do they carry compared to your store? Are there brands, items, or product lines your company should be carrying?
- Were there a lot of customers in the store? How long were the checkout lines?
- How clean is the store? Do you feel comfortable with the level of cleanliness?
- Taking a sample of items and comparing pricing, how does your company’s selection stack up?
- What was the purchase experience like? Were you offered an upsell or a coupon? What does the checkout area look like? Were customers offered a bag for their items?
- What was it like to return an item? How strict is the return policy, and was the service friendly or hesitant?
- For service providers, does their waiting area look inviting and professional? What do their service areas look like?
- Was there any follow-up, such as an email promotion or thank-you note?
Once you have compiled the information on your competitors, you can look for ideas to improve your business that align with your brand and culture. These improvements are often in the area of customer service, but can also include adding inventory, updating hours and availability, adding store features or sales events, and more. You may even be able to find ideas to implement at a lower cost than your competitors, giving you an edge on profits.
Now, where can you find a mystery shopper? You can hire individuals or a company that specializes in providing this service. While many business owners might consider asking a friend to mystery shop in an effort to save money, a friend might not be able to articulate their experience with the detail you need, or they could fail to observe important aspects of the shopping experience.
So, consider recruiting a professional for the job. You’ll need a budget to pay the shopper(s) for their time, plus funds to make any purchases on your behalf. But hiring a mystery shopper can be well worth the investment, as it provides valuable access to your competition.
Whether we’re headed for a recession or not, it’s always a good time to squeak out more profits from your business books. We’re not talking about drastically slashing expenses or spending a lot to raise revenue; the tips in this article are long-term ideas to lift up your profits gently.
Timing on Capital Purchases
The timing of asset purchases, such as equipment, a truck, or even a PC, can be tricky. Understanding the best timing for asset purchases and replacements can make a difference in your profits.
When purchasing a new asset, gain a good understanding of the return on investment so that you’re prepared from a cash flow standpoint. With more complex businesses, it’s a good idea to hire an accountant who knows your industry and has capital expenditure experience.
When replacing an asset, it should be timed so that the asset is replaced before you have to begin spending a lot on repairs, but not so soon that you maximize your use of the current asset.
Rent and Utility Contracts
When rent and utility contracts come up for renewal, it’s time to negotiate. If your landlord hasn’t fixed something, you can at least use this as an opportunity to have the discussion and hopefully accelerate the repairs.
For certain utility contracts, like internet and phone, the price will often increase when your contract runs out. However, it can also be the best time to ask for a better deal, or even a new customer deal. The adage “it’s always easier to keep a customer than find a new one,” can apply to new carriers, too. Communications companies are constantly creating new deals and packages, so try to jump into one of those to keep your costs from going up.
Profit in Leftovers
What assets do you have that aren’t working for you? Put them to work!
Here are some examples:
- Cash – make sure your excess cash is safely invested or at least in an interest-bearing checking or savings account.
- Extra space – rent out space that you are not using or only using some days. This solution can have many different looks to it beyond the monthly renter. As an example, virtual workers looking for a conference room for a day could be a money-maker for you.
- Manufacturing firms can sell the scrap from their assembly lines as well as their obsolete inventory.
- Excess construction materials can be sold, donated, stored for the next job, used on a new small project, or used as firewood.
- If the inventory on your shelf needs to be dusted, you’ve had it too long. Find a way to move it now, and replace it with something that sells faster.
Training
If employees are wasting time, they are wasting money–yours, to be exact. There are three good solutions:
- Offer training – perhaps they haven’t been shown what to do correctly or how to do it efficiently. Or maybe they need to break bad habits.
- Re-energize employees with incentives, new benefits, or motivational training and events.
- Redesign your processes and automation, then retrain – it could be your workflow needs revamping to make it more efficient. For accounting processes, New Business Directions can help with this!
If these options don’t work, it may be time to face the reality that your employee could be a bad fit. You know what you have to do in that case.
Stop the Subscriptions
Those recurring monthly charges just keep adding up. The average small business uses dozens of apps, meaning they also likely have dozens of $20 to $50 automatic monthly charges going on a credit card somewhere in your business. This includes magazines, memberships, dues, conferences, newsletters, gadgets, and software.
If you’re making a lot of money, you may have trouble finding the time to research what subscriptions you really need versus what you don’t. But in the long run, you will retain more revenue sooner if you sit down and examine this area of spending. Stop the $20 to $50 madness by reassessing what subscriptions you really need and then either opting for the annual subscription discount or canceling the apps that aren’t essential.
ClickUp™ is a versatile new web application that functions primarily as a project management tool, and serves multiple other functions for small businesses and is adaptable across several industries.
ClickUp’s goal for its users is to save time and reduce redundancy by tying everything together in one app. Its integrations, which are called ClickApps, are truly its strength. The 1,000+ integrations set ClickUp apart from other offerings, and for this reason, ClickUp excels at automating processes that use multiple apps, including hard-to-automate processes like customer onboarding.
Some of the functions people use ClickUp for include reminders, goals, whiteboards, templates, calendars, document flow, task management, dashboards, marketing processes, and team collaboration and communication.
One feature frequently mentioned is the ability to create custom views exactly the way you want them. Views provide a summary of your work and come in many flavors. You can create task views, list views, boards, calendars, Gantt views, workload views, and box views.
If ClickUp has any weakness, it could be the fact that it’s a blank slate. Because the platform is so versatile, it can be used across many different industries. However, users should really spend some time considering their hierarchy of workspaces, folders, and list. You may need to be somewhat tech-savvy to get everything set up. The learning curve can be intimidating, but once you get through it, there is so much power in having everything customized and on one platform.
ClickUp does have a following of power users, and a certification of sorts is offered. Becoming ClickUp Verified means that you’ve earned expertise in the product. If the learning curve is too much for you or your team members, you can hire one of these ClickUp consultants to do the setup for you, or head to YouTube for comprehensive tutorials.
As of this writing, ClickUp hosts 4,000,000 users, including those using the free version available for personal use. Monthly pricing for business users ranges from $5 to $19 per user, depending on the features you need. Enterprise options are also available.
ClickUp was founded in 2017, is headquartered in San Diego, CA, and has raised three rounds of funding as of this writing. New Business Directions recently implemented ClickUp within our own company, so if you’d like to learn more about why we chose this software, send us an email or learn more at clickup.com.
Pick up just about any public company’s most recent annual report, and you’ll find a section on ESG, or Environment, Social, and Governance. ESG is the trend of not only considering but also measuring a company’s sustainability performance—something that has become key for a new generation of investors who are choosing to be more discerning when selecting companies to invest in.
While ESG is still predominately a matter of concern for large companies, small and mid-size businesses can benefit from an awareness of the trend. Below, we offer an introduction to the ESG components:
Environment
When measuring a business’s impact on the environment, one must consider topics such as climate change and sustainability. This includes questions like, “How many natural resources does the company use, and are they replenishing them as they use them?” and “If the company is creating pollution, how is it offsetting, or working to eliminate, its pollution?”
Social
The social impact of a business is the broadest umbrella of the three categories. It includes many topics, from diversity and inclusion (in the workforce and with suppliers) to consumer protection related to their product. Human rights issues like overseas working conditions, minimum wages, and animal welfare in product research and development also apply.
Governance
The area of governance measures the quality of leadership within the company as it relates to the topics of ethics, transparency, compensation issues for both executives and employees, and employee relations as a whole.
Accounting for ESG
The accounting industry is developing and adopting standards for measuring a corporation’s sustainability performance. As of this writing, the IFRS (International Financial Reporting Standards) Foundation has proposed the creation of the Sustainability Standards Board, which will help set standards for ESG in 140 countries.
This move will better align the current financial performance of a company with the new sustainability measures. However, all of this is many years off, as many organizations have developed standards for numerous components of ESG that need to be consolidated and adopted.
In the meantime, we do know that positive sustainability performance by a company drives positive financial performance. There are many ways small businesses can participate in ESG’s benefits.
ESG and Small Business
ESG can positively impact your company’s value, culture, hiring process, the vendors you select, and the customers who select you.
For example, if you plan to do business with a large company, mirroring their ESG values can help you align with them, giving you an edge in the selection process. Similarly, when you communicate your ESG values and contributions, you are more likely to attract employees with the same individual values, making for a better fit.
While there are many efforts a small business can make to improve ESG, here are a few ideas to get started:
- Disclose your starting hourly rate, if it’s well above your state’s minimum wage, to attract better-quality candidates.
- When purchasing vehicles, consider electric or hybrid.
- Match employee nonprofit contributions, and give them time off to volunteer.
- Practice transparency when it comes to executive salaries or financial results.
- Write and post a diversity and inclusion statement.
- Conserve electricity by closing off unused spaces, turning off lights when not in use, and switching from gas to electric appliances when possible.
- Optimize service routes to reduce fuel consumption.
- Donate excess food to shelters (in the case of restaurants).
- Protect customers’ private information with privacy processes and policies.
- Make product components recyclable, purchase recyclable supplies, and train employees to recycle.
Add your own ideas to the above list, and ask yourself how your business measures up when it comes to ESG.
When it comes to crafting a refund policy, being a business owner means that you can establish your own rules so long they are communicated to your customer clearly in advance of their purchase.
A good refund policy reduces conflict and ambiguity by outlining the procedures and terms under which a return/refund can occur. In doing so, it improves customer service. Your employees will appreciate having a documented policy they can share with customers, and your customers will be able to accurately assess the risk of making their purchase ahead of time. Furthermore, your credit card or shopping cart company will most likely require one to maintain PCI (Payment Card Industry) compliance. It’s always a good, fair business practice to establish and publish a thorough refund policy.
Here are some of the components you’ll want to address in your refund policy:
Eligible Items for Return: Which items can be returned and which can’t? Some products can’t be returned safely after opening (such as food products). You might still honor a refund of money or credit, even if the item can’t be returned or re-sold.
Condition of Items: You may want to stipulate that returns can only be made if the items are in a condition to be re-sold. This could mean that to qualify for a refund, the customer also needs to include their item’s packaging when they initiate their return.
Return Time Window: Your business model and industry will often dictate the length of time that is appropriate for a customer to initiate a return. Common time limits range from 7 to 30 days, and during the holidays, many retailers even extend their return windows to 90 days.
Shipping Requirements: If shipping is required to return an item, you’ll want to ensure your refund policy addresses which party will be responsible for shipping fees, how returns should be packaged, and what mail carrier is authorized for the return.
Processing Time: When can customers expect to receive their refund? Managing customer expectations surrounding refund turnaround is also something you may want to address with your refund policy.
Cash vs. Credit: If a return qualifies for a refund, how will the money be returned to the customer? Via the payment method used, cash, a mailed check, or store credit only?
Processing Procedures: Will customers need to fill out a form or request refund approval? What instructions do you need to provide them for proper return requests and processing?
Fees: Will there be a re-stocking fee, cancellation fee, return processing fee, or any other fee that reduces the refund amount?
Answering the above questions is the first step to drafting your company’s refund policy. You might be tempted to establish a “no returns, no refunds” policy, which could be the right thing for your business, depending on many factors. On the opposite spectrum is the “no questions asked” policy, which could increase sales in the long term by lowering the risk for your shoppers. (Nordstrom, for example, is well-known for its generous return policy). Keep in mind: your refund policy is a chance to build trust with your customer, and a rigid policy could result in lost sales or repeat customers.
Once you have thoughtfully considered the topics outlined above, you can begin drafting your written policy. It may also be a good idea to have your lawyer review the policy prior to publishing. Once the policy is finalized, post it on your website and in checkout areas of your store.
Next, make sure you have a smooth process in place to handle returns on a timely basis. Most brick-and-mortar stores have a separate checkout area or customer service desk to process returns to avoid slowing down the regular check-out lines. Employees should be trained to speak with the customers appropriately, accept the returned items back into inventory for resale or return to vendor, and use the cash register or point of sale system to process the returns. A well-trained employee can even create opportunities to convert a return into an exchange for a similar item that better suits the customer’s needs.
With an increase in customers will always come an increase in likelihood that there will be a customer who requests a refund. However, with a clear, fair, and well-documented refund policy, your business can be prepared to handle any return.