Read Rick's bio.
Skip to main content
Skip to footer
Don't rush to open a second store
Q: I own a home furnishing and gift store. I have been in business for two profitable years and am looking to grow. My question is which types of marketing are the most successful for my specialty store? I have a very loyal, local client base but am always looking for affordable ways to add to my customer base. I do some local print advertising, which I feel is mildly effective at best. I have done direct mail as well. Any ideas? And also, although profitable, I don't exactly earn a living at it. Is the key to that opening another store?
A: Opening another store is not necessarily the key. It can be very dangerous. Make sure that you meet the following criteria before you open another store.
- You open up a second store when all of your bills are paid on time and it is not a struggle.
- You are earning a salary for managing the store that is equivalent to what a chain store manager would be paid.
- Loans to the bank are paid promptly without any strain on cash flow.
- You have developed a strong banking relationship.
- You have a strong web presence and are starting to do some business from your website. In other words, your first expansion should be on the web rather than another brick and mortar store. That doesn't mean that every item you carry should be on the web but a half dozen is a safe workable start.
Having said all that about expansion, let me work backwards to your original question about the types of marketing that are the most successful. The number one form of marketing in retailing today is direct marketing to a categorized database of existing customers or qualified prospects. In other words, people who have either bought or have at least been in the store.
But just gathering names isn't good enough. You need to gather more information about each customer, such as birthdays, anniversaries, buying style which includes being an early season or late season buyer, price level, and type of merchandise they prefer. It's not difficult to get this information provided you give the customer a reason to give it to you. These reasons can include a price incentive or some type of preferred customer status and benefits. These customers should be contacted a minimum of 6 times a year and will represent 80% of your sales.
As for other types of marketing or advertising, many of the media formats including radio, TV, billboards, magazines are great but can be expensive. Unless you can be consistent–don't do it. You should commit to any media that you choose for at least a year.
Lastly, as you have acknowledged, newspaper advertising is not as effective as it once was because of all the competition that is out there. However, there is one type of ad that I love. It is what I call the Q & A ad which is a one column by 4–inch Question and Answer Ad with the headline that reads, "Ask the __________ Pro", with your specific industry plugged into the blank. Then put your name after that. You should ask a pertinent question and answer it. And don't forget to put the store logo and contact information at the bottom. Run the ad every week for 52 weeks. (Obviously with a different question and answer.) These ads are very inexpensive because you are buying the 52–week rate, which is the lowest rate that the newspaper has. You are also establishing credibility and expert status within the mind of your potential customer. But the best part is that you will be attracting the type of customer that you want to shop in your store.
Some issues discussed in the expert forum are complex and continually changing.We recommend you consult a professional advisor about your specific circumstances, needs, and applicable laws. More details.