Lis Calandrino

Black Friday was what we expected: lots of stuff got sold. We witnessed the crowds, the frenzy and even the frightening event at Walmart: crazed and desperate shoppers pushing each other to go after the bargains.

Black Friday might seem like a blessing to business owners, but any dummy can give stuff away. It takes a good salesperson and a smart business owner to make money when the whole world is saying: give it to me cheaper!

If we want to make it in this economy we have to learn to "lean out." That's a skiing term used mainly when skiing moguls. In order to maintain your balance you need to learn to lean your body out away from the mountain, into the unknown.  One of the reasons I never got to be a good skier was because I had such a hard time trying to "lean out." I could get into it sometimes but most of the time it scared me. But like skiing, finding the balance of your business requires leaning out into the unknown.

Where you've been in the past will not hold the answers to your business in the future. The place where you have never been will hold new ideas and possibilities.

Considering that, when concentrating on your retail profits:

• Try not to drop prices. The influx of cash will make you think you're making money, but cash flow isn't profit – it's just cash. It won't keep you in business. 
• Lowering your prices will take away value from your products. You'll begin to think that your products aren't worth it.
• The only business out there will come from the customer with money. This customer is the one that will survive and send you referrals.
• The cheapest price in town will not satisfy the better customer. The better customer is not looking for commodities.
• Can't get rid of it? Raise the prices of the "dogs." Leave the prices there for a few months and then put them on sale.

Remember, you're planning not only for today's customers, but for future customers.

225 E. 60th St. – New York is all about fun and different. My friend Tony said we can’t go to New York City without going to Serendipity 3 for their Frrrozen Chocolate. Tony had taken one of his daughters on her birthday and had a banana split, which is a yearly favorite for his own birthday.

Serendipity goes back to 1954, when it was founded in a basement on 60th St. by three entrepreneurs (hence the "3" in Serendipity 3) who pooled their entire fortunes together (totaling $300).  Visited by a number of celebrities — Marilyn Monroe, Bill Clinton, Tom Cruise and Meg Ryan, to name a few — Serendipity is the place for a decadent dessert, a great meal and a nice walk through their coffee house boutique. The store houses everything from Serendipity 3 perfume to chocolate body rub and, if you can believe it, chocolate shampoo.

The ambience too is unique and charming. There are Tiffany lamps and other collectables located throughout the store, and the waiters are darling.  Visit the store's site for additional details. Everyone is friendly and make you feel like you're on the inside — whether it's a conversation with Lynn the manager or Joe Calderone, who handles the publicity.

Serendipity also houses the $1000 gold sundae. Of course I had to ask “who buys the $1000 gold sundae?"  Lynn has the “scoop.” All kinds of folks, she says. A lighting guy from Las Vegas, a law school graduate and a variety of Sweet 16 birthday celebrants.

I was told that Mayor Bloomberg helped Serendipity celebrate its 50th anniversary in 2004 by declaring Serendipity Day in New York City.

This is the place to bring your sweet tooth and leave your diet at home.

What can we learn from Serendipity?

• Be different or be outrageous. It doesn’t matter as long as your customer’s approve.
• Let everyone know you’re different
• Do things that your customers would like, such as “Books for Cooks.”
• Make your customers feel welcome – have photos of them and ensure a friendly atmosphere.
• Keep yourself out in front of the public.

 In other words, don't be afraid to try something new. And yes, you can even declare your own holiday!

Happy Thanksgiving!

Blogging from Fresno, CA

Since first hearing the song "I Heard it Through the Grapevine," I've been fascinated with the dancing raisins. I swore that one day I would go and interview the people with the raisins. As luck would have it, a trip to Fresno, CA and the raisin capital of the world was in store!

My friend Dave Silvas from Jamie’s Flooring in Fresno said his friend Roger Moles had a good-sized ranch and he thought Roger would talk to me. We jumped in the car and were off to visit Roger. His farm had miles and miles of grapes weighing on the vines, and Dave says they're just about ready to be picked. I’m amazed at how beautiful they were — golden in color. First thing about Roger was his enthusiasm for what he was doing, even though he was on crutches. I asked how it happened (thinking it was a farming accident) but Roger laughed and said it was a motorcycle accident. At least he has time to play!

Roger is the Foreman of Tri City Farms, which is owned by Roger’s family. I started thinking, why, in 2008, does anyone become a farmer? My grandfather was a fruit farmer — he worried about the trees "morning, noon and night" as mother used to say. Between the bugs, cost of fertilizer and getting the apples and cherries picked, it was a family affair.  I spent my summers on the farm and I too loved the trees, the smell of the apple blossoms and was in awe of the blossoms turning into apples. I wondered if farmers in 2008 felt the same way.

LC: Why does anyone go into this business?
Roger: A love of the earth, the land and of course the grapes. The beauty of the grapes, watching them grow and how beautiful they are on the vines. Things that can’t be controlled. As with any other business, to make money. This is work on a margin of 20-40% depending on the yield. There is also my love of the grapes; touching them. Our farm is 2800 acres yielding about 2-2 ½ tons of grapes per acres. Volume is about 8 million dollars. The big problem is we only get paid once a year! Of course there’s the flexibility of being your own boss although this is a 24 hour a day business. Worrying about people stealing your plants straight out of the field.

LC: How do you keep the trees healthy?
Roger: Trees are like raising a child, the key is to keep the child healthy. Good fertilizer, keep away the bugs and love the plants. We try to fertilize them every year and invest part of our profits back into the soil. This way when profits aren’t high we can skip a couple years.

LC: How important is the organic market?
Roger: We are seeing amazing growth in the organic market, particularly overseas. The green market includes organic almonds and olives. It seems to be growing overseas faster then in the states. It is more difficult to grow organic because of stricter regulations, no pesticides and natural fertilizer. If the bugs get us then we have less of a yield and less money.

LC: What is the secret to making money?
Roger: Part of it is being vertically integrated. Picking, packing, trucking and being big enough to take care of everything. Also you have to watch the bottom line, what is everything costing, keeping the costs in line. Fertilizer costs more these days and of course gas continues to go up so that delivery costs more.

Roger tells me he and his staff repair all equipment, including their trucks. They are building a packing plant so they don’t have to sell to packers — another middleman. This way they can also pack for others.  At this point they also haul for other ranchers.

As with many other businesses, the economy has a lot to do with how much money they make. Many products are sweetened with grape juice at another place for their products.

Also, it’s taking care of your employees — you have to depend on your pickers, a tough job with few benefits, but you teach them how to take their money and provide a good working environment so that they want to stay with you. These days the picking is done by machines.

Like a flooring business, the bottom line is key as is investing in the business. When times are good it’s important to invest in it. Invest in improvements in your buildings and your equipment as well as your employees. Take care of your products, look for new markets.

Now comes the best part: tasting the raisins. There's chocolate covered, candy covered and just plain raisins. Off I go, bags packed with raisins and a new appreciation for someone’s love of their business.

If you’re into raisins, how can you skip Sun Maid?  Sun Maid is a cooperative composed of 1500 growers. I know when I think of buying raisins I think of buying Sun Maid and the little girl on the label. What I find out from Sun Maid is that raisins go back to 2000 years ago in Greece and the Roman empire. They were brought to California in the 1800s where the industry flourished. The secret to “raising raisins,” again, is the “farmer’s footprint”: water, love, nutrients, the vines and fertilizer. I guess the secret to any business is paying attention. The Joaquin Valley is perfect for farming and boasts all kinds of fruits.

By the way, did you know it takes 4 ½ pounds of grapes to make 1 pound of raisins? After I saw what goes into raisin production I think I’’ll stop complaining about the price.  

According to Sun Maid, raisins contain antioxidants, fiber and also help lower your cholesterol. In addition to a wonderful video from Sun Maid, I was sent a Mind, Body, Spirit and fitness tape designed to get me in shape in 4 weeks so I can be “Bikini Ready.” Have you ever thought of pairing your business with a fitness club? Any association is possible.

Now, I’m off to the treadmill while I listen to my fitness tape from the Sun Maid people.

Rather than remind you that times are tough, I’ll remind you that tough times also bring opportunities. You know, it’s the "is the glass half-full or half-empty?" thing. In order to get through this you have to pay attention to the market outside of your business.

Consider the history of the automobile industry. Somehow the US automobile industry never saw the trends coming. An odd-looking car built in Germany in the 40’s began to appear on European streets and eventually made its way to the US. It was an inexpensive, good riding car that was to become  the signature of the hippy generation. Before you knew it, a whole generation converted to foreign cars—the results of global competition. Next was the 70’s. There was a crisis in the availability of oil and a steep rise in the price of gasoline. What followed was the need for more fuel-efficient, smaller cars.

Unfortunately, Detroit left the small car market to foreign producers—most of them Japanese.

So what does this mean to you in the flooring industry?

• Be aware of the trends, if hard surface is selling, make sure your retail store says more than just "Carpet" in the title.

• Keep your employees up-to-date on product and consumer trends. The primary buyers are female. Know how this affects your business.

• Green is more than a color. If your not liking Al Gore is what keeps you from watching "An Inconvenient Truth"—get over it. Go rent the movie. In 1959 my mother said "No more aerosol hairspray — we’re messing with the ozone layer." I thought she was nuts, what was she reading? Turns out she was on the money. Find out about what green means in our industry and start doing something good for the planet. It’s not a fad. The Intergovernmental Panel on Climate Change (IPCC)'s Fourth Assessment Report says that evidence for global warming is unequivocal, that negative effects of warming have already been observed, and that emissions control programs must be implemented. A good book is "Go Green, Live Rich," by David Bach.

• Still think “the Web” has something to do with spider web? I  read a recent report that said LinkedIn, a social networking site designed to help professionals make business connections, had over 9 million users by February 2007.

• You keep saying you need a Web site. Well, get to it. In our industry, try John Simonson at john@webstreamdynamics.com; he has been doing this forever and knows the industry.

• Start reading industry blogs, one of the absolute best is written by Christine Whitmore, Director, In-Store Innovation for Solutia's Wear-Dated carpet fiber, at Flooring the Consumer.

• Follow industry news. There's lots of it on talkfloor.com.

• Go to the industry trade shows. The biggest one right now is Stone Expo, October 15-18 at Mandalay Bay Conference Center in Vegas.

• Take advantage of the Web sites offered by your suppliers; there are plenty of interactive sites that will help you sell to your consumer.

In Vegas this week? Hope you had a chance to join me at Stone Expo yesterday for my seminar, "Over Promise, Over Deliver: Building Your Competitive Advantage."

Businesses struggle to be different. Staples has an Easy Button, Best Buy has the Geek Squad, Chrysler had  “Dr. Z.” and of course everyone knows the AFLAC duck. Do these gimmicks really create a competitive advantage though?

Dr. Z, remember, turned out to be a bomb. For one thing, he wasn’t Lee Iacocca — who everyone knew was a big cheese and knew what he was talking about. You can read Iacocca’s ideas about the marketing of Dr. Z in his book, “Where Have All the Leaders Gone?”

Little Richard howling during the Nationwide Insurance commercial may make you hold your sides with laughter, but if your roof falls in over the weekend and the Nationwide claims adjuster doesn’t return your call until Monday, Little Richard may just be a constant reminder of how Nationwide wasn’t on your side. 

So what does it take to turn your differentiation into a competitive advantage? First, you need to understand that the fact you’ve found something that makes you different doesn’t necessarily mean that it is a competitive advantage. Although companies brag that they bring their dogs to work and that they’re family owned, do they really know how that translates to increased business? Sure, the customer wants to know how your dog is doing — he’s sitting in your showroom and in your ads, but how many customers actually thought this was a good enough reason to pay your prices?

[...]

For years I thought that in order to make money your business had to be different. All the marketing classes talk about a business's "USP," or unique selling proposition. I know plenty of businesses that are different but they don’t make any mone. In fact, many of them have gone out of business. One that comes to mind is an electronics store called The Wiz, which had the tag line "Nobody beats the Wiz."  I wonder if the name, different as it was, actually helped them go out of business? Truth was, nobody did beat the Wiz, because they had the lowest price. But it wasn't long before they were gone. What does "differentiation" mean unless it adds to your bottom line?

Maybe it’s not just being different — maybe there’s a missing component. The missing component is the customer and how the customer feels about your differentiation. Does the difference really matter to them? I talk to retailers who tell me that the most important part of the ad is their family and their children—they say everyone remarks how good they look. My question is, can you connect the children and the number of sales? No one can answer the question with any statistics.

I notice in many beauty salons the hairstylists have strange color hair and hair styles—most not desired by most customers! In fact it somewhat frightens me that I might be the recipient of one of those colors or one of those haircuts. They certainly are different but I don’t see many of those haircuts or those colors on top of the average person. Maybe they should ask their customers what kind of looks they want and then wear those cuts and those colors. If you have blue-haired customers maybe it would be wise to have a stylist with blue hair? How many people have you seen going out of the salon with those colors and cuts?

This started me thinking, what really makes a difference? A year ago I attended a workshop in Ft. Lauderdale, FL on Building your Competitive Advantage, given by author and speaker Jaynie Smith.  One evening, driving in my car and listening to NPR, I heard Jaynie Smith talking about her book on building a competive advantage. Everything she said made sense to me.I stopped at the nearest Barnes and Noble and bought the book. After reading it I made a point to call. We decided to meet in Ft.Lauderdale at one of my seminars so I could ask her about her book.  One of the most important things that Jaynie said was that building your competitive advantage can do one very important thing for your business: it can free you from price-based competition.

[...]