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SYRACUSE, N.Y. -- It was all "action" and no "cuts" at the New York Association of Convenience Stores' (NYACS) 2007 Trade Show and Conference, held here May 15 to 16. This year's show, themed "NYACS Goes Hollywood," brought together stars from the industry, including Nice N Easy Grocery Shoppes, Sunoco, XtraMart and others, who gathered to share ideas, learn from educational sessions, see the latest in new products and relax at an authentic Irish bar for a drink or two.
The show kicked off with a "celebrity-filled" welcome party at Coleman's Authentic Irish Pub. Guests at the party donned mystery personas that had to be discovered through yes or no questions. A-listers in attendance included "Star War'"s Mark Hamill and Billy Bob Thorton.
The next day, retailers sat down to learn strategies to help their businesses. One session titled "What's My Convenience Store Business Really Worth?" was presented by Gary Papay of CK Business Consultants Inc. According to Papay, there are "five-plus" factors that influence to value of a convenience store -- location, earnings, hard assets, image and risk factors, plus timing.
The two most important factors are earnings and timing, Papay said. Earnings are "a major driver as far as value goes," he explained, noting that a top-notch establishment will not sell for its full value if the earnings are not solid. Meanwhile, timing is the most important issue to consider because with the right timing, store owners can walk out the door a millionaire, while the wrong timing can cause store owners to walk out without anything, he said.
In addition, knowing the value of the business is not just for exit planning. "You want to know if all your hard work is paying off," he said. A number of events can require a valuation of the store -- including remodeling or expansion, refinancing, mergers and acquisitions, divestures, estate and retirement planning, foreclosure, partnership dissolution, insurance purposes, litigation support and buy/sell agreements.
Further, Papay gave the "five Ds" that can have "a profound impact on business. They are: death, disability, dissenting owners, divorce and declining markets. He advised retailers to use an appraiser for valuations. He also gave the following figures to consider:
-- businesses with $1 million to $2.5 million in annual sales sell for less than $2.5 million;
-- businesses with $2.5 million to $10 million in annual sales sell for less than $10 million;
-- in the next decade, 50 percent of small- and medium-sized businesses are going to sell;
-- 85 percent of business owners don’t know the value of their business, and
-- the same percentage do not have an exit plan.
Later, keynote speaker Linda McKenna opened eyes with an insightful look at customer loyalty. Customer frequency is not loyalty, she said, explaining that some customers may visit daily just because a store is convenient. However, if a newer, brighter, cheaper location were to open up across the street, "the customers that stay with you and don’t go across the street are loyal customers," she said, noting this was the "acid test" for loyalty.
Similarly, so-called "loyalty cards" are better-defined as "frequency cards," as most consumers have multiple cards for the same retail channels, she said.
Loyalty is defined as voluntary retention that is grounded in emotion, according to McKenna. To generate an emotional connection with consumers, she offered a list of tips to use in the store:
-- Communication. Watch the cashier interact with the customer and observe body language, words and the tone of voice. Also, create a unique greeting and thank-you beyond the "How are you?" and "Have a nice day." She advised "Are you having a good day?" and "See you tomorrow," both of which can open up communication.
-- Recovery Strategies. McKenna admitted that there will always be complaints, but those customers are really saying: "I'm mad, but I'm giving you a chance to save me." The tricks to save customers who have complaints are: never interrupt the customer; have only one person attend to the customer; acknowledge feelings; ask the customer's name; never ask "what's the problem" and give the customer options to solve the concerns.
-- Feedback. Create two-way communication by asking frequent customers what they would like to change in the store. This technique gains valuable information and also begins a relationship with the customer.
-- People. "You have to hire the right people," McKenna said. To get employees to deliver to customers, they must see a commitment to the customers from management; their connection with customers must be measured; meetings should be held where employees are listened to; systems must be in place for hiring -- "hire for attitude, train or skill," she said; and have a recovery strategy that allows employees to have the authority to fix customer complaints.
Lastly, McKenna gave one final tip to attendees to build loyalty -- hang a sign in an area employees frequent that says: "They may forget what you said, but they'll never forget how you made them feel."