Step One in Developing an LSM Plan
In the past, I’ve written about the G.A.M.E. method for developing a Local Store Marketing (LSM) plan for your business. This four-step process: Gather, Analyze, Make a Plan and Execute has proven to be successful in driving sales and building long-term community relationships for many local retailers. Now, I want to dive a bit deeper into Step One: Gather Information.
Gathering information is one of the most important steps when creating your LSM plan. Taking the time to look at the current state of your business will help ensure that you get started in the right direction. I once worked with a client, I’ll call her Charlotte. She wanted to jump right into plan development, as “she already knew what she wanted to do.” I patiently explained to her that I still wanted to go through the steps in reviewing where her business stood.
At first, Charlotte had a little less patience for me, as I walked her through each of the areas that we needed to do a deep dive into. But, in the end, once the plan was developed, Charlotte was shocked at how different it was from what she’d originally wanted to do. Most importantly, she was in total agreement with the tactics we’d selected together. We actually laughed at how far off her original thoughts were in their ability to achieve her objectives. Today, when I see Charlotte, we still talk about that planning discussion and the difference it’s made to her business. So, let’s take a little time together today to dive a bit deeper into the information you should review before creating your LSM plan.
It may seem obvious that you want to review your business data (current year vs. year ago):
- Average check
But, those are just the tip of the iceberg when it comes to finding the best sales building opportunities. Stop reading for a minute. Take a look at the above information for your business. You might be thinking “Hey, my average check is up 7%, I’m doing great” or “My transactions are up 5%, all is well.” Okay, start reading again. Let’s start looking at a few more details:
- What are the sales of your most profitable items?
- Which days of the week are sales highest and lowest?
- What hours of the day are sales highest and lowest?
- When was your last price increase and how much did prices increase?
- What’s your product mix? What items are purchased most often?
- Are there certain items that are always purchased together?
- What impact have your past marketing efforts had on sales?
- If you have more than one location, how does this information compare across locations?
As Charlotte and I looked at her business results she said “Wow, I can already see the potential opportunities. Now can we plan?” “No Charlotte, not just yet. We have a few more areas to look into. Grab your coat and let’s go”.
We got into my car and drove around her location. We started at a point three miles away—-that’s the distance she felt was most realistic for her customers to travel to her business. I asked her to start making a list of every building she saw that housed more than 10 potential customers. She wrote down all of these traffic generators for her business:
- Three apartment complexes
- Six office buildings
- A local bakery
- A college campus
- A fire station
- A library
- A museum
- Two churches, a temple and a synagogue
- And a few more I don’t recall
You get the idea, we started looking at the buildings she drove by everyday as a potential source of traffic for her business.
We also looked at her competition. We parked across the street and watched for a while:
- When were they the busiest?
- Who were their customers? Did she recognize any of them as her customers?
- What promotions were they currently offering?
- What advantages did they have over her business? What were her location’s advantages?
Charlotte was beginning to see the importance of understanding her trading area. She’d read some of this information in her site selection materials before she’d opened the location. But, that was four years ago. We went back to her office and looked at those details:
- How many people lived in the area?
- What were the ages of the population around her location?
- What ethnicity groups lived in the area?
- How many schools and local businesses were there?
We also reviewed the information she had on her current customers, which she was able to get from her loyalty app. It was relatively new and not all of her customers used it, but it gave her a little perspective into what her app customers purchased and what offers motivated them.
Next, we talked to her employees:
- What did they hear customers asking for most often?
- What did customers really love about her business?
- What events, festivals, parades and activities were going on in the area?
- What groups did they see most often at the location? Seniors, families, construction workers, Uber drivers?
The last thing I asked Charlotte to do was to drive around her trading area again—on another day and at a different time of day. We needed to make sure that we understood as much as possible about what was going on around her location on different days and at different times, in case any different opportunities were present on the weekends vs. weekdays, for example.
When we completed our meeting, Charlotte had a lot of great information about her customers, her competition and her business. I think you’ll find the same if you take the time to gather this information for your business. Our next step is to analyze this information, so that we can uncover the areas that provide the biggest opportunities for driving sales. I’ll tell you more about that in my next article.