Another Timely Topic

Another Timely Topic

by Robert Hendrickson

It was the first Fall Event Wendy and I have missed. Besides all the business value that takes place, seeing clients who have become friends is like a big family reunion. Not being in Burlington was a huge disappointment but necessary given family responsibilities.

One topic I was anxious to hear discussed in Vermont was the trifecta of Average Sale/Customer Count/Revenue. Ever since Steve's June 12 WDR commentary reporting how a dip in average sale accompanied by a continuing drop in customer count was a concern, I've looked forward to The Fall Event to discuss what could be done to address the issue.

From a number's guy like Steve, his suggestion in the WDR that "an internal push in Average Sale should be considered" makes perfect sense. But from a marketing guy's perspective, "an external push in Customer Count should be considered" sounds like a lot more fun with much higher potential.

A note here that Steve and I have always shared a "I sure wouldn't want to do your job" relationship. It's why I asked Steve to join The Group as soon as he sold his garden center. "You help people with the numbers... I'll help them fill their parking lot" was the plan. Steve says his approach to business is always black and white... numbers don't lie... while my marketing world is a varied shade of gray. We both like it that way.

So here's what I would have said in Vermont if anyone would have been interested in addressing the Average Sale/Customer Count/Revenue issue.

"I remember the call like it was yesterday... not more than a decade ago when it actually took place. "Robert", the caller began, "has other garden center owners noticed they keep achieving similar gross dollars each year but it's because their average sale is going up faster than their customer count is dropping? That might be okay for now but at some point this ain't gonna work."

I knew this would become an issue (wasn't sure how long it would take) as garden centers started believing that cutting their marketing budget due to "economic concerns" was necessary and without consequences. Later, a race to see how little could be spent on marketing became a badge of honor when comparing business expenses with other centers. Then came the delusion that social media was actual marketing and could sustain the financial needs necessary to meet ever rising business expenses.

From a marketing guy's totally biased belief, instead of resting on the false security that squeezing more and more out of the same customer base was a legitimate business model... that spending fewer and fewer dollars on marketing wouldn't result in a diminishing number of shoppers... that spending 30% of sales on people and 47% of sales on stuff is acceptable but a mere 5% of sales in an effort to pay those people and get rid of inventory was somehow unacceptable... garden centers should have been trying to increase their customer count with aggressive marketing focused on why gardening and garden centers are important to the health and happiness of every demographic in the country.

My friend Wally, a very successful garden center owner since retired, reminded me for years that my first Retail Rules of the Road from the early '90's was the best and only one he needed...


Retail Rules of the Road #1:
"There ain't no margin 'till the stuff gets sold."


And nothing gets sold without a steady flow of customers. And nothing assures a steady stream of customers more than a "cool" store with aggressive, effective marketing.

When a company watches what's happening with their numbers more than watching what's happening with their customers, eventually Retail Rules of the Road #2 comes into play...


Retail Rules of the Road #2:
"Without customers, nothing else matters."


I believe average sale comes with an eventual ceiling. Getting fewer and fewer people to keep paying more and more is not a business plan for success. But... getting more people to come shop more often by increasing/improving marketing and the shopping experience is only limited by available parking.

I guess each garden center gets to decide which path to take.


Got questions or need more information about your marketing programs?
Give Robert a call or email!
Robert Hendrickson
Cell: 443-255-8282


Robert Hendrickson is founder and a service provider for The Garden Center Group and our "guru" for how to best tell your story. 

REMEMBER: Your interaction (by phone and email) with Group Service Providers such as Robert Hendrickson, Steve Bailey, Sid Raisch and Jean Seawright, are included in your retainer!


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