September/October 2017
Right in Front of Your Eyes By Stan Pohmer

Where to place your focus depends on your corporate goals, a detailed understanding of who your customers are, and where you are in your business life cycle.

In the wide world of retail, garden centers are truly unique. Though other product categories and industries have seasonal peaks where a disproportionate percentage of their sales occur (think toys at Christmas or formal wear during prom or wedding seasons), they all enjoy year-round sales demand.

No other industry’s sales are dictated almost entirely by weather, crammed into such short windows of potential opportunity as ours is.

In some markets, such as the Sun Belt states, we’re blessed with two selling seasons, plus the opportunity for Christmas sales. But in the majority of the country, we only get one shot at the golden apple, spring, and some of you add Christmas selling, with all of your sales generated in only four short months each year.

One of the biggest challenges we face with our compressed seasonal selling windows is that we lose top-of-mind relevancy with the consumer for our products and as retailers during the non-peak months.

At the beginning of each season we have to start the process anew of re-introducing ourselves and the reasons to purchase, re-educating the consumer. It’s almost like taking two steps forward and one step backward every year — a never-ending process.

The net result is we spend a major portion of our advertising and marketing budgets each year at the onset of the spring season to re-engage not only with new, potential customers, but also those we have enjoyed doing business with in the past.

It’s not exactly the best use of our limited dollars, but an operational necessity, especially if we maintain a transactional sales mentality where all we expect from our marketing is to drive indiscriminate traffic through our front doors (not that we don’t need or want the traffic), rather than employing a more strategic approach to investing our limited marketing resources.

Allow me to share some assumptions that, if you are realistic, you may find interesting and may challenge some of your traditional thinking:

  • During the spring season, your “average” customer purchases from you 1.4 times.
  • The bulk of your customers (80 percent) only purchase from you once per season.
  • Your VIP customers (20 percent of your customers), who account for 60 to 70 percent of your sales, purchase from you three times per season.
  • Our “cast the net wide” advertising strategy tends to spend more on attracting more one-time-a-year purchasers than it does to further develop the purchasing power of our higher frequency/higher spend core VIP customers, a missed opportunity.

There are only a few ways to increase sales in your garden center:

  1. Raise retails
  2. Increase the number of customers who walk through your doors
  3. Increase the frequency of visit from those customers you’ve already attracted
  4. Increase the dollar value (market basket) of each register transaction every time they shop.

Each of these tactics is important to increasing your sales and profit, but each one requires a different approach to achieve results.

Where to place your focus depends on your corporate goals, a detailed understanding of who your customers are, and where you are in your business life cycle. And if you are able to leverage two or more of these tactics, you’ll realize compounded benefits.

For illustrative purposes, and using my assumptions noted, consider the following:

Attracting new customers to your business will always be important, providing the opportunity to develop them into regular and VIP customers. But attracting new customers has the highest acquisition costs. You already have a relationship with your existing customers, offering you faster and more profitable ways to leverage increased purchase frequency, and higher transaction values.

Expanding your customer base and nurturing your existing customers are both vital to your current and future success. Just keep in mind where your low hanging fruit is …

Stan Pohmer

Stan Pohmer is president of Pohmer Consulting Group in Minnetonka, Minn. He can be reached at [email protected] or 612.605.8799.


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