This Episode: It’s Hard To Grow Big When You Think Small
Mindset matters when it comes to the growth of your retail business. Get into the right headspace with retail tips from Bob’s personal experiences to help you start looking at your retail business through new lenses in this episode of Real Retail TV.
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Hey, it’s Bob, and this is another episode of Real Retail TV. It’s hard to grow big when you think small. And in this episode, we’re going to discuss why it’s natural to think small, and a single simple shift to start you thinking differently, to start you thinking and growing bigger.
It’s natural to think small. It’s natural to live in the now. It’s natural to think small because you live in the life of transactions, single transactions. We live our business lives as a series of events and tend to see them singularly.
We see a sale. We see a promotion. We see an opportunity with a partner. And while some opportunities clearly have bigger potentials, most seem small.
But when you start looking at most of your business life through the lens of lifetime value, you are naturally, inevitably drawn into a wonderful, bigger, more fulfilling future. So there’s four different types of lifetime values. Let’s talk about them here.
The first is the lifetime value of an idea. My brother Steve, who was my partner at the Mackinaw Kite Company– and who still owns the Mackinaw Kite Company, by the way– used to go to a trade show and say, if we get one good idea, it’s worth at least $10,000. And I just want to say to you, we were thinking way too small. The lifetime value of an idea is immense, at least six figures. Let me give you an example.
A client came here to an event we were having in our office a year and a half ago. The last time I saw her, she took a simple idea, the profitable pricing idea, applied it in her business, and increased her margins by three points. Now, when I say lifetime value, what I mean is she took that idea and got three points of extra margin in one year, but she’s going to continue to get that extra margin for as long as she owns her business. The lifetime value of that simple idea is immense. And when you recognize it, all of a sudden you become a lot more open to new ideas because you know the value of a single great idea.
Another lifetime value for you as a retailer is lifetime value of a promotion. A lot of people do promotions, and if they’re not big right away, they let them go. And that’s thinking small, when you should think about the lifetime value. Let me give you an example.
The Great Lakes Kite Festival that is held every year on the beach here in Grand Haven started with a couple of dozen of kite flyers. We had a kite festival Steve and I did. A couple dozen people came out, but we did it every year. And they’ve done it every year for 30 years.
And every year the world’s largest kite shop sets up as a pop-up shop on the beach. Every year, my brother Steve acquires hundreds of new customers. Every year, my brother Steve and the Mackinaw Kite Company get immense amounts of publicity. The lifetime value of the Great Lakes Kite Festival has to be well over a half million dollars, probably over a million dollars, when you look at all the benefits that come from a single promotion.
The third kind of lifetime value is the lifetime value of a customer. There’s a whole another episode about this on Real Retail TV. But just recognize that that person who comes into your store is not a transaction. That person represents hundreds of transactions over the course of a lifetime.
And when you understand that, when you recognize it, when you give it a number, all of a sudden, again what are you doing? You’re thinking big. You’re making all of your choices based not on a sale, but based on a relationship and the lifetime value of that relationship.
Which leads us to the fourth lifetime value, and that is the lifetime value of a relationship. Yes, a customer is a lifetime value. But you also have the lifetime value, sort of the ripple effect of someone that you know, someone who has impact on your business.
So a customer can have a lifetime value. A mentor can have a lifetime value. A mastermind can have a lifetime value. And sometimes they’re all wrapped up in the same package.
I’ll tell you a quick story. One of our mentors is named Randy Gage. And years ago, when Susan and I didn’t really know who he was, we spent a lot of money to go to one of his events. And it was an awesome event. It had tremendous impact on the way that we think, in the way that we behave, and on our business.
But at that event we met Paul Lemberg, and Paul became a consultant to us. And Paul was directly responsible for a period of great growth in our company. And Paul recommended us to, and got us into, a mastermind, with a tremendous amount of super smart people, who again brought us all sorts of information, helped us think differently about our business.
And then Randy ended up joining that mastermind. And when Randy joined the mastermind, we became better friends. The relationship became deeper. He impacted our business in a more meaningful, more profitable way. In fact, Randy is the person responsible for the Retail Sales Academy.
So do you see? The lifetime value of our relationship with Randy Gage is immense. And I know that there are thousands of retailers out there who would say the lifetime value of their relationship with me or us here at WhizBang Training is immense. Sometimes it’s immeasurable.
But here’s what I want you to recognize. Here’s the important point here, is that when you think past the here and now, when you think past the person, the event, the promotion, the relationship, and recognize what comes from all of this, all of a sudden you see your business bigger. You envision a bigger, better future for your retail business. And I just want to say that when you envision it, it is much more likely to become your reality.
So your action item, should you choose to accept it, is to start writing down. First of all, watch the Real Retail TV episode on lifetime value of a customer, and figure out the lifetime value of your customer. But just spend some time thinking about the promotions you do, the people you know, the relationships that you have within your industry, and look at what it’s meant to you in the long term. Start to train your brain to think long term. Start to understand the lifetime value of all of the things that you do in your business.
So if you liked that, I would encourage you to participate in our communities, to go to WhizBangTraining.com and sign up for our tip of the week, to go to Facebook and join our WhizBang Retailers community. And, of course, invest in the Retail Mastery System. Go to RetailMasterySystem.com. It is the best resource for independent retailers anywhere. And I can tell you, there are more ideas with six-figure lifetime values on them than anyplace else in the planet.