Archive for the ‘Uncategorized’ Category

Driving Positive Word of Mouth (the cheapest form of advertising)

Thursday, April 28th, 2016

WOMMy business partner always mentions that the 5 top reasons people shop at a grocery store are:

1-Convenience

2-Clean and bright

3-Modern and up-to-date

4-Friendly employees, and

5-Well stocked

 

Not surprisingly, these attributes have not changed much over the years. Notice how many of them are:

A-in your direct control (2-5) and

B-do not cost a lot of money.

A couple of months ago I was part of a panel discussion at the National Grocers Alliance show in Las Vegas and spoke on the topic of re-engineering the Dairy department. During the ending question and answer period, I was asked what are the top couple of things I would advise other retailers to do to improve their dairy sales results. Many in the audience were probably expecting suggestions involving a capital investment, like new refrigerated cases. My answer was simple: start with the things that are in your control that don’t cost much money at all! Clean the department. Make sure you have no out-of-stocks. Have the top 20 dairy items in the category well merchandised. Train your employees to point out the positive traits of the new dairy item to customers. Etc.

 A recent study by the Word of Mouth Marketing Association (WOMMA) shows that Word of Mouth (WOM), both offline and online, can be much more effective and certainly less costly than paid advertising. Think about it. What would make you try a new store more: a flashy ad or a recommendation from a friend? This landmark study by WOMMA finally puts some statistics behind the question-An offline WOM drives at least 5 times more sales than a paid advertising impression.

Nothing drives positive offline WOM more than a good shopping experience. And nothing produces a better shopping experience than first addressing the top five reasons why a customer shops your store. Once you have done that, then consider whether more expensive paid advertising is needed.

 

John Marklin

www.marklinfinancial.com

 

Cheap Chicken

Wednesday, February 10th, 2016

The Deli is the lifeblood of our grocery stores. It pulls hundreds of people in daily to try our signature Kretschmar meats and cheeses as well as our hot lunch bar. Our secret? We set our prices to be at or lower than our competition while providing quality food prepared fresh daily.

Additionally, we have always been known for having good fried chicken in our deli. In fact, before we bought our stores in Bridgewater and Chincoteague we would ask customers what they liked about the stores and invariably having good fried chicken was usually top on their list.

Last year, we talked about things we could do to further increase sales. My partner came up with the idea to have Cheap Chicken Tuesday where you could buy 8 pieces of chicken (two breasts, two wings, two legs and two thighs) for $4.98, regularly $6.98! In addition, he came up with a radio commercial that we played hundreds of times on the radio station for a week and then ran it every hour in our store over the speakers.

This commercial, set to the tune of Mission Impossible really caught on with the customers. It was unique, funny and catchy. We entered it in the SuperValu Master Marketer program and won the top spot nationally in the radio commercial category.

It’s nice to have awards for commercials, but how did sales respond? Well, see the graph below showing number of 8-piece chicken sold per Tuesday for the last 13 months at one store

 

But still, I wanted to see what two experts in advertising thought of the commercial. I sent it to Roy Williams, the founder of The Wizard Academy and he published it in his weekly Monday Morning Memo sent out to thousands nationally.

I then sent it to Tom Schiller, owner of Radio Dial Marketing in St. Louis, who provided a unique perspective as follows, “the commercial is catchy alright, but it’s popularity is really due to the chicken being so good at a great price”.

Tom’s right. Without a great product to back it up, the commercial would have been like so many others-unnoticeable.

 

John Marklin

www.marklinfinancial.com

The Flaw

Monday, May 11th, 2015

housing_bustThe year was 1999 and I killed some time waiting for a flight at the Manchester, NH airport by having a drink at the bar. With the news of yet another day of unprecedented stock market gains playing on the TV in the background, a lone traveler sitting next to me shouted out, “yeah baby, keep it going”. I asked him, “so you had a good day?”

He proceeded to tell me that he had become rich playing the stock market. That with only a High School education, he couldn’t go wrong with his stock picks, especially Initial Public Offerings (IPO’s). He said that regardless of the industry, he always made good, quick money with an IPO.

As I returned to Richmond that night, I went to see a High School football game. Sitting in the stands with a friend, I told him about my experience at the airport and asked what he thought of the market. He too had been caught up in the day trading mania and set aside $40,000 to play with. He spoke like it was “play” money, taking risks while doing little research since the stock market trends had been so consistently good.

The same belief of perpetual upward trends could be said of the real estate market through the 80’s and the 90’s. As I’ve mentioned before, I bought and sold numerous homes during that time period, and it always seemed like a sure bet that real estate prices would rise.

This type of thinking was so wide spread back then, that a sense of hysteria set in. That if you weren’t in the stock or real estate market, well then,  you were a fool!

This hysteria seemed to go on steroids in the early 2000’s especially when the lending institutions lessened the credit rules that had been in existence for a hundred years. Need a loan for a home? No problem; you could borrow up to 105% of the purchase price by merely stating your income!

As the movie, The Flaw points out, the big banks believed the real estate market would continue to rise. They looked the other way when the price of homes literally double in the early 2000’s which added on more debt to people especially at the bottom of the wage scale. This added fuel to an already growing gap of wage inequality in America.

We know the next chapter. The housing bubble, like the stock market, burst in 2006 and stayed in a downward slide for the next six years. Millions of homes went into foreclosure as the debt payments sometimes exceeded take home pay.

Unfortunately, many people learned the hard way that there is no Get-Rich-Quick formula. That taking risks based on what everyone else was doing, and without adequate research, is nonsense.

 

John Marklin

www.marklinfinancial.com

I love a parade

Tuesday, December 10th, 2013

1441374_269054623241942_1529588517_nTwo years, Lee and I had just bought the Bridgewater Foods grocery store. Bridgewater, VA is a small farming town outside of Harrisonburg, VA. We were working hard to come up with ideas to get involved in the community. One idea I had was to bring Santa Claus to Bridgewater. I checked around and there were no official Santa events in town. So I bought a Santa suit (quite humorous looking now that I look back at the pictures) and surprised my customers one day by walking the store. The Pepsi man was filling his end cap so I jumped on a pallet of Pepsi and he wheeled me around the store. I high fived customers and little kids. I then went onto Main Street and waved at the passing cars. A few kids wanted their picture taken with Santa, so I obliged.

Last year, I decided to have a parade through town. I asked a fellow farmer to borrow his wagon and tractor, asked some friends to be Santa and his Elf, and  did some in-store publicizing about meeting Santa and parading through town. On parade day, I had about 20 kids show up to ride in the wagon with Santa. Led by my butcher on a motorcycle, we paraded through town waving and spreading Christmas cheer. Afterwards, we stopped at our store and had free pictures with kids (about 75 in total).

This year, Lee and I decided to step it up a notch. We discovered that it had been 39 years since the town had an official Christmas parade, so we started a year in advance to organize one. A big one! We approached the Town Administrator, the Police Chief and Fire Chief and got their go-ahead and full support. We then picked a date and early in the Fall focused on sign-ups. One day, Lee and I blanketed the town with sign up forms. He took one side of Main Street and I took the other. We knocked on every merchant’s door. By the end of the day, we had 50 committed floats.

Lee and I wanted to do something special for the Bridgewater Retirement Home in town. We knew many living there could not make it to the parade, so we took the parade to them.  We scheduled the parade to begin on their grounds. We scheduled pre-parade concerts, in the Assisted Living facility, Nursing Home and outdoors, by the Bridgewater College choir, Pep band and the student who sings the national anthem for JMU.

Later the publicity started to go into full swing. We put red parade posters on every telephone pole along the parade route. We aired commercials on local radio. We put notices in our weekly newspaper ads, on our Facebook fan page and through our proprietary email list. The word started to spread. I was getting calls every day for new entrants. By parade day, I had over 100 units committed with 85 official floats.

I asked for volunteers, and they immediately stepped up. I asked for vendor and local support with advertising, supplies and food and they responded.

And then I started a routine communication vehicle with the parade participants and with the volunteers. Every week leading up to the parade I would email a notice advising them of something. We ended with 13 official parade notices.

When parade day  came, there was only one more thing to worry about-the weather. The Weather Channel was calling for a cold and rainy forecast for the parade. I called some  of my family and friends to pray for good weather. By parade day, the rain had stopped by 6 am, just in time for the 10 am start.

We had thousands show up lining the street to see the parade. Each float was introduced by Q101 DJ, Ian, and some floats had 30 second commercials about their business. About 14 floats stopped to do a 1 minute song or dance performance.

The parade went smoothly and ended in about one hour and 15 minutes. After the parade, the crowd moved to Santa’s Village across from my store to have pictures with Santa and hear some more music.

 

Here are some of the things I learned from this year’s parade:

1-It took a few years to get established before launching such a big event. We started off small two years ago and slowly built to a major event.

2-I needed local support from the town, police and fire. Once you have that, you are good to go.

3-Start early. We have literally been working on this for a year. We had some natural dormant periods, but the planning ahead reduced the stress and risk of screw up at the end.

4-Communicate often. Email is the best way to communicate on a routine basis. Not everyone reads their email, but for those who do, they love to hear about the plans and the development of the parade.

5-Ask for help, from anyone. I was shocked to see what people will do if they believe in the cause.

6-And lastly, SMILE and show enthusiasm at all times when planning and executing the parade. After all, who doesn’t love a parade?

 

John Marklin

www.marklinfinancial.com

A different feeling about the market this time

Wednesday, April 3rd, 2013

In 2000, I was 45 years old. The Dow Jones was around 12,000. The next year it dropped to 8000 and lost 33% of its value.

 

In 2007, I was 52. The Dow Jones was around 14,000 and dropped the next year to 7000 and lost 50% of its value.

 

Today, I am 57. The Dow Jones is again at 14,000. What it will do this year is anyone’s guess.

 

What I do know today is that I am not willing to ride out another serious drop in the market for it to take 5-7 years to recover.

 

As I age, I look at things differently. Trying to be a bit more conservative, I move financial holdings from equities into cash, bonds, the bluest of blue chips producing dividends, and my own companies.

 

People will say these are uncertain times: (European debt crisis, Obamacare costs, Cyprus bank run, Sequestration, North Korea sabre-rattling, etc.). But when are times ever certain? They haven’t been in my lifetime.

 

If I was younger, I would look at things differently and ride out this wild stock market ride into its next chapter.

 

But unfortunately I am not younger anymore. I look at the next stage of my life through a different lens. I have a grandchild now, three companies and a bunch of employees depending on me. In 7 plus years I will be 65. I would like to have options then to travel and do what I want to do. I will always work, but work will take on a different definition. So I make decisions differently than before.

 

To my “older” readers, look at the future realistically with a shorter time span, and consider making appropriate financial adjustments to your portfolio.

 

John Marklin

 

www.marklinfinancial.com

 

 

Fantasy Football

Thursday, September 20th, 2012

I have never been in a Fantasy Football league. Not that I have something against it, but I was never asked to join one. I also don’t particularly care for professional football. The games seem to go on forever. And being a Rams fan, well, the game usually was turned off before half.

This season my son Jeff put a league together for our family and he asked me to join. Perfect, I can learn about Fantasy Football and not be too embarrassed if I really stink it up.

For those who don’t understand it, and I am slowly learning, Fantasy Football involves picking a team consisting of a QB, 2 running backs, 3 wide receivers, a tight end, a kicker, one team for defense and about a half dozen backups. All the picking is done virtually over the internet through a draft. The draft took about 1 ½ hours and was intriguing to watch on Yahoo as it gave the neophytes suggestions of who to pick.

I had the first pick so I picked Aaron Rodgers, QB for the Green Bay Packers. After that, I didn’t know many of the new players, so I picked some of the older ones that I heard of who were successful in the past. I am finding out that this game is for the young players who are developing quickly. The NFL has a very short life span for players, which makes fantasy so difficult. So someone you don’t even know of can be a crucial player if he hits his prime early.

Some facts about fantasy football:

-It started in 1963.

-In 1994, it overtook fantasy baseball in popularity when MLB went on strike and became the fantasy sport of choice.

-In 2002, Fantasy Football makes its debut in Vegas.

-In 2012, it is estimated that the average fantasy sports enthusiast spends nine hours every week working on his team.

To me, the best part of Fantasy Football is that it keeps you interested games other than your home team. I now have a vested interest in a dozen or so other players and find myself flipping channels during commercials digging for news of how my guys did.

And after two weeks how am I doing? I am in 0-2 and in second last place. Oh well, except for one spot, the only way is up.

 

John Marklin

www.marklinfinancial.com

Refuse to pile-on

Friday, June 1st, 2012

I took this picture a couple weeks ago while touring the McLean House in Appomattox Courthouse, VA. This is the room where the surrender took place bringing an end to the Civil War.

The actual surrender was the result of several days of negotiations between Generals Grant from the north and Lee from the south. Lee, realizing that the end was in sight, tried to get the best deal he could from Grant. Grant, knowing that he had the upper hand, responded with professionalism and humility; always stressing that the end goal was to unite the country and save future bloodshed.

Lee asked Grant for his conditions of surrender. Grant simply replied for the men to give up their rifles and return home. He allowed each soldier to keep his side-arm, horse and baggage. The defeated soldiers returned home unscathed and began the long process rebuilding our country.

Grant’s handling of the surrender gives us a fine example of how to handle difficult situations where one side knows they must give in, but for whatever reason is refusing to do so.

When your kid or employee does something wrong and offers an apology, think twice about how you respond. Make sure the punishment fits the crime and is not excessive. Avoid rehashing the incident. Be professional.  Stick to the facts and keep emotion out of it. Move on and look to a brighter future and a fresh start.

If you refuse to pile-on when someone is down, both sides can benefit.

 

John Marklin

www.marklinfinancial.com

Today’s credit process

Tuesday, March 13th, 2012

It used to be very easy getting credit, especially for personal residences and home equity loans. Five years ago, mortgage loan officers wouldn’t even verify your income for underwriting. And they waived the 20% down payment using a secondary loan vehicle. I remember thinking to myself back then that we were in for a real shake up when these loans had to be serviced in a tough economy. And it did happen with the real estate collapse and the bank bailouts of a few years ago.

The pendulum has now swung as far as possible to the other side. For anyone who has attempted to get a mortgage or a loan today, they will find an incredible due diligence process. Where the underwriting used to rely on collateral as its main form of approval, the process has shifted to substantiation of cash flow, and being assured of making the payment.

I don’t disagree with this logic at all. It seemed reasonable that if you are going to borrow money, you need to assure the lender he will be repaid. The best way to do that is to substantiate cash flow.

But the way cash flow is substantiated, is flawed, in my opinion.

Banks look at your income as the first source of cash flow. And income usually is W2 income. Therefore, if you have a job, one that pays you a salary, and it meets the debt service formula requirement of the proposed financing, you are well on your way to loan approval.

But if you don’t have a “real” job, well then good luck.

Banks do not view free lancers, independent contractors and new business owners as having a real job. Even though you may be able to substantiate historical cash flows from business ventures, these funds are considered secondary to someone who gets a fixed paycheck.

This thinking is archaic. Especially now.

The US needs to improve its economy. Building homes, refinancing, and starting new businesses are all good for the economy. They add jobs.

Banks are is the business of lending money. Along with this comes an underwriting process that should look at all sources of income and collateral in order to substantiate the risk.

Sometimes this requires doing things a little differently. Sometimes a little outside of the box. And something not copied out of a FHA or Fannie Mae playbook.

John Marklin

www.marklinfinancial.com

The Business Golden Rule

Friday, February 24th, 2012

Treat others like you would like to be treated. This golden rule has been around for thousands of years. And a good rule it is.

The golden rule is simple, and can be used with every social action we take.

In business, there is a similar rule. One that I believe can catapult your career to new heights. One that takes the confusion and clutter out of any decision to be made.

That rule is: Treat all business assets as if they were your own.

This is easy to say, easy to hear, but very difficult to follow. But for those who do, your worth becomes priceless.

Unless you own a business, or have your money actually at stake, you really have no idea of the stress and importance of every business decision that is made. The goal is to transmute the idea of business ownership  to your employees and co-workers, so that they treat your assets as you would treat them.

In order to help employees implement  the Business Golden Rule, I have them begin every decision with the following phrase: If it were my money, would  I ……………………?

If it were my money, would I hire John Doe?

 If it were my money, would I buy that new piece of equipment or fix the old one?

 If it were my money, would I miss that deadline?

 If it were my money, would I call in sick when I really am not?

 If it were my money, would I not pay for that cup of coffee I just drank?

For those employees who can demonstrate to the owner that they treat your money very seriously, and act like they are stewards of your money, they become indispensable to you. And you will pay top dollar to keep them onboard.

John Marklin

www.marklinfinancial.com

Thoughts on Mizzou and the SEC

Monday, January 2nd, 2012

The 2012 Mizzou football schedule was published over the weekend while I was in St. Louis for Christmas. It got quite a bit of front page news in the paper and lively chatter among family and friends since Mizzou will be moving to the SEC after many decades of playing in the Big 8 and later the Big 12.

My first reaction was fright. Living in Virginia, we are exposed to constant TV games highlighting the SEC. When I worked in Birmingham, AL for three years I got firsthand experience of the craziness of the Alabama football fans. Daily playing of the Alabama fight song on the radio at noon and seemingly everyone had the Alabama fight song as their cell phone ring tone. SEC fans and their teams take football very seriously and seem to live for a football win on Saturday. I didn’t know if Mizzou would be ready for this level of football mania and feared being mediocre in a cut-throat conference.

I also was saddened by leaving the “friendly” competition that we Mizzou fans grew up with. Iowa State, K-State, the proverbial tough Texas and Oklahoma teams, and of course the hundred plus year rivalry game with Kansas. A friend told me that Kansas refused to play Mizzou this year as a protest over leaving the conference. Whatever the reason, there won’t be a Mizzou-KU game in 2012, breaking one of the oldest rivalries in college football. Those kind of streaks come around every hundred years or so. I won’t see another one like it in my lifetime.

It seems like sports is changing ever so fast because of the money. It is diluting the long standing traditions and also is diluting fan loyalty. Sure, it seems like college football right now is unsurpassed in its level of interest. Just look at ESPN game day. Rabid fans everywhere and it’s tough to watch anything on TV on the weekend, and even during the week, except college football. But everything goes in cycles. Packed stadiums today will have trouble filling them in the future. It may take time, but it will eventually happen.

And then universities will have to find ways to keep the revenue stream coming. More moves to other conferences will develop as teams follow the money trail.

But for now, Mizzou football seems excited to be playing teams they only heretofore saw on TV. Mizzou, I believe, will be successful, and they will attract better football athletes since they will be showcased in the SEC states. And let’s not forget the other sports. Mizzou will be a powerhouse in the SEC in basketball and I am sure they will be competitive in the other sports as well.

I am excited for another reason. They will be carried on TV more on the east coast. Ms Debbie and I have a full season of Mizzou football on TV to look forward to in the Old Dominion state of Virginia.

Go Mizzou Rah Tigers!

John Marklin

www.marklinfinancial.com