Retailers love the home run.
We love the promotion that packs the store, the social media post that suddenly takes off, the email that produces an unusually strong response, or the advertising campaign that creates an immediate bump in sales.
There is nothing wrong with a home run. I’ll take one whenever I can get it.
But after spending more than four decades in retail, I have become convinced that the businesses that consistently outperform their competitors aren’t necessarily the ones with the occasional brilliant marketing idea. More often, they are the businesses that become slightly better at marketing every week.
The difference sounds small. It isn’t. Small improvements compound.
Stop Looking for the Marketing Miracle
One of the traps in retail marketing is our tendency to judge an idea by whether it produces a dramatic and immediate result.
We run an advertisement. Did sales jump? We send an email. How much did it produce? We start posting more frequently on social media. Did traffic increase?
Those are reasonable questions, but they can lead retailers into a feast-or-famine approach to marketing. We launch a big promotion, become busy operating the store, stop marketing for a while, notice that business has slowed and then launch another promotion.
That isn’t a marketing strategy. It is a marketing heartbeat with an arrhythmia. Instead, imagine improving five or six small parts of your marketing operation over the course of a year.
Increase the percentage of customers whose email addresses you capture. Improve the percentage of emails that customers open. Improve the percentage of those customers who click through. Increase the number of Google reviews your store receives. Get a few more customers to return for their next purchase. Increase the average transaction slightly. Improve your conversion rate.
None of those changes needs to be spectacular. The magic occurs because they don’t operate independently. One improvement begins feeding another.
Retail Math Can Be Beautiful
Suppose 1,000 prospective customers interact with your business during a given period. Perhaps 300 visit your store or website. Of those, 100 make a purchase. The average sale is $120. That’s $12,000 in sales.
Now suppose you make several modest improvements. Better advertising and social media increase qualified traffic by 5%. Better merchandising and sales training improve conversion by 5%. Better product presentation and suggestive selling improve the average transaction by 5%.
It is tempting to think you have improved the business by 15%. You haven’t. 1.05 × 1.05 × 1.05 = 1.1576.
Those three modest improvements produce approximately a 15.8% improvement in the resulting sales opportunity. Add improvements in customer retention, frequency of purchase and referrals, and the effect becomes considerably larger.
This is the principle retailers should understand: marketing improvements don’t simply add up. When they affect different stages of the customer journey, they can compound.
Find the Leaks Before Buying a Bigger Hose
Retailers sometimes respond to disappointing sales by immediately spending more money on advertising. That may be exactly the wrong prescription.
If your conversion rate is poor, buying additional traffic simply introduces more people to a process that isn’t working particularly well. If customers aren’t returning, spending more money to acquire first-time customers without fixing retention can become extraordinarily expensive.
If your email database is small because employees aren’t consistently capturing customer information, buying a sophisticated email platform won’t solve the fundamental problem.
Before increasing the marketing budget, examine the plumbing. Where are customers leaking out?
That might mean looking at traffic, conversion, average sale, email capture, repeat purchase rate, online reviews, appointment requests, abandoned shopping carts or any other measurable step in your particular business. Then improve the weakest areas one at a time.
One Percent Is Not Boring
Businesspeople sometimes dismiss tiny improvements because they don’t sound exciting enough. “We increased conversion by 1%” isn’t going to get anybody carried through the store on the shoulders of cheering employees.
But the economics can be substantial. A retailer doing $3 million annually that improves sales productivity by only 1% has created $30,000 in additional annual sales. Improve several components of the business simultaneously and the numbers begin getting interesting.
More importantly, some improvements become permanent. Teach employees to consistently ask satisfied customers for Google reviews and you don’t receive the benefit for just one week. Improve your email capture process and the database remains larger next month. Improve the photography on your website and those images continue working. Develop a better system for following up with customers and every future customer potentially benefits.
The best small marketing wins become part of the operating system of the business.
Consistency Beats Occasional Brilliance
I have seen plenty of retailers become enthusiastic about marketing for thirty days. The owner starts posting on Facebook. An email goes out every week. Employees ask customers for reviews. The website gets updated. Maybe somebody even remembers that the store has an Instagram account.
Then business gets busy and marketing disappears. Three months later, sales soften and everyone wonders what happened. Marketing works best when it becomes a discipline rather than an event.
A reasonably good email sent consistently can be more valuable than a spectacular email sent three times a year. Regular social media activity can be more valuable than an elaborate campaign followed by silence. Asking five satisfied customers every day for a review can ultimately accomplish more than announcing a massive “review campaign” that employees forget about after a week.
Consistency is not glamorous. Neither is compound interest. Both work.
Measure the Small Stuff
The beauty of incremental marketing is that it encourages measurement. Instead of asking the enormous question, “Is our marketing working?” ask smaller questions.
Is store traffic increasing? Is website traffic increasing? What percentage of visitors become buyers? How many customer email addresses did we collect this month? What percentage of customers are repeat customers? How many new reviews did we receive? What is our average transaction? How often are customers buying? How much business comes from referrals?
Suddenly, marketing stops being a mysterious expense and becomes a series of numbers that can be managed. And once something can be measured, it can usually be improved.
Give Your Employees a Role
This philosophy also changes the role of store employees. Marketing isn’t something that happens exclusively in an advertising agency, corporate office or owner’s desk. Your salespeople are marketers.
The employee who asks a customer to join the loyalty program is marketing. The salesperson who remembers a customer’s name is marketing. The associate who asks for a Google review is marketing. The employee who calls a customer when a new product arrives is marketing. The manager who takes a photograph of a new display and posts it online is marketing.
The salesperson who turns a first-time visitor into a repeat customer may have performed the most valuable marketing activity of the day. Once you recognize this, marketing becomes woven into store operations rather than sitting in a separate box labeled “Advertising.”
Build a Culture of Tiny Experiments
I would encourage retailers to make one small marketing improvement every month. Not 12 gigantic initiatives, but 12 improvements.
Test a different email subject line. Improve the store’s Google Business Profile. Ask for more reviews. Change the wording employees use when requesting customer information. Call 20 good customers who haven’t purchased recently. Improve one section of the website. Create a better bounce-back offer. Test a referral incentive.
Measure the results. Keep what works, and abandon what doesn’t. Then move to the next experiment.
After 12 months, you don’t merely have twelve marketing projects behind you. You may have fundamentally improved the machinery that produces sales.
The Goal Is a Better Machine
Retailers understandably want more customers. But there is an important distinction between generating another burst of customers and building a business that becomes progressively better at acquiring, converting and retaining customers.
The second business is far more valuable. Big promotions have their place. Great advertising campaigns are wonderful. Occasionally, a retailer really does hit a marketing home run. Enjoy it. Then get back to hitting singles.
Because a retailer who gets a little better at attracting customers, a little better at converting them, a little better at increasing transactions and a little better at bringing those customers back isn’t creating one marketing victory.
That retailer is building a compounding machine. And given enough time, small wins stop looking small.
Alan Miklofsky is a semi-retired business consultant and longtime independent footwear retailer. He spent approximately 40 years operating The Shoe House, Inc., doing business as Alan’s Shoes in Tucson, Arizona, before selling the business in 2022. Alan was named NSRA Retailer of the Year in 2015 and received Footwear Insight’s Gold Medal Service Award in 2019.
