It’s 2:30 in the morning; you are sitting in bed in a cold sweat. The veins in your neck and forehead are standing out. All of a sudden you hear, “Where are all my customers?!” It came from you -- you screamed those words. When you awake, you realize that you are having a nightmare.

There has not been a retailer anywhere who has not had a nightmare about his or her business. Nightmares like this are caused by stress – more than normal, everyday stress – due to anxiety about the bottom line. About a year ago, I had a phone call from a retailer who had a nightmare like this one, but his nightmare was real.

In mid-December, a retailer called our office. He stated his problem as being merchandise mix. So I asked him to tell me about his merchandise, customers, price points, and how and when he does his buying.

Then I asked a question I thought would never cause such a problem:

Q: “How much do you have in markdowns?” A: “I don’t understand, what markdowns?”

Q: “How much merchandise have you marked down, and how do you take those markdowns?” A: “I take 10% off everything.”

Q: “I don’t understand -- everything in your store is 10% off?” A: “No, I mark the merchandise up 50% and then take 10% off.”

I figured that I must be phrasing this question incorrectly, so I started again:

Q: “How much did you buy for the Christmas season?” A: “About $600.”

Q: “Retail or cost?” A: “Oh, cost.”

Q: “You mean to tell me that you will only do $1,200 worth of retail business this Christmas?” A: “Oh no, I only had to buy very little for this season.”

I sat there a moment to gain the courage to ask the next question.

Q: “How much of your merchandise is left over from last year, and is any of it marked down?” A: “About 60-70% is from last year -- you know, the merchandise that did not sell.”

Q: “Do you understand the reasons and principle of markdowns?” A: “Yes, you need to mark down your merchandise, like a sale, to get more customers in your store.”

It was the 12th of December, and his sales were next to nothing. I explained what markdowns were and how and when to take them. I asked him if he had any red pens; the first order of business was to start marking down old and seasonable merchandise. He did so, and he had a 30% increase in business by the end of the month.

His problem was not his merchandise mix -- it was his merchandise. He had no turn because he prevented the turn from taking place. His customers were so familiar with his merchandise and knew he was not changing it, that he was no longer meeting their buying needs.

This is just one example of how customers can be driven away. Most of the time this is done unintentionally, and the problem isn’t realized until it is too late.

Markdowns and sales play key roles in bringing customers into your store. However, as the buyer, manager, and/or owner, you want to have as few markdowns as possible. Simply moving the merchandise around the store(s) can make a world of difference.

In the situation above, all of those markdowns could have been avoided by some merchandise movement and promotions. Competition has never been greater -- your customer is always looking for something fresh and exciting to keep them coming back.

Improving Appeal

Other factors that can cause “lack-of-customers syndrome” include pricing, quality of merchandise, your personnel, and store condition.

Personnel play a key part in your store’s customer appeal. Store dress codes have a big effect on customer relations. If your salespeople can wear your merchandise, then they should be wearing it. However, this does not mean that they should dress only in clothing from your store(s).

Your store’s hygiene policy is probably one of the most important aspects of your store(s). Customers will overlook a cluttered store if they think they are getting a real bargain, but poor dressing and hygiene is intolerable.

The store’s policy on dress code should be plainly understood by all those who work in the store. It must be understood that they will be sent home to change if they are not dressed appropriately.

A store’s dress code also pertains to makeup and jewelry. Today, it is becoming more and more accepted that men can and do wear earrings. However, if this is not appropriate for your clientele, it should be prohibited.

Poor work habits are another key problem. Customers are very fickle: If they see salespeople standing around and not offering to help, they often get annoyed; if they see them working too busily with the merchandise and ignoring them, they may just leave.

Most retailers forget that service is the name of the game. If you do not make your customers feel wanted, they will not return.

I do not believe in having your staff standing around and waiting until the customer either walks through the door or is ready to purchase something. Your staff should always be busy doing something while always remembering that the customer pays their salary.

Eye contact is the most important skill in customer service. Even if you are at the register or helping one or two customers, just looking in the direction of the new customer who just walked in says a lot. Stores that fail to have good customer service will not be here for very long, no matter how long they have been around.

Underrated Factors: Cleanliness and Newness

When was the last time you redecorated your store? Has it become drab and outdated? Customers look for ambience when shopping -- if they have to weave their way through old, broken fixtures, they will not come back. Look at your competition: What colors and fixtures are they using?

This also brings us to cleanliness. Is your store clean? You may have the best merchandise, fixtures, and layout, but if your floor has not been vacuumed, the mirrors cleaned, and the fixtures dusted, you could be faced with a major problem.

No employee should be permitted to leave at the end of the day/night until the store looks like it can open. Your store should be ready to open as soon as you come in every morning.

Pricing, Quality, and Social Consciousness

Are your prices driving your customers away? Almost every retailer -- or any business, for that matter -- worries whether their prices are too high. However, having low prices can also be a deterrent.

A good example is a store on L.A.’s Rodeo Drive -- a very upscale, service-oriented area. What would happen if a store opened that offered merchandise that was 40% less than everyone else’s?

First, that store would be swamped with business. But would it last? NO! We can be so overly concerned about overpricing ourselves that we forget that we could also undercut our competition too much. Customers do not expect to get the same high quality of merchandise and service on Rodeo Drive that they would receive at a discount store.

Shop your competition regularly; you should always be very competitive with them without undercutting them so much that you drive your customers to them.

How is the quality of your merchandise? One hot subject in recent years is whether products are U.S.-made and environmentally safe. But is the quality there? You owe it to your customers to make sure it is.

Do not just buy because the tag says it was made in the U.S. or is biodegradable. As much as the customer may be looking for those tags, if the merchandise falls apart in two weeks, they really won’t care where or how it was made. They bought the merchandise from you, so you are responsible.

Merchandise Management

Customers will pay higher prices if they know that they are getting a better piece of merchandise for their dollar. Now more than ever, this is the most important area of merchandise management.

Just as important as your pricing and quality of merchandise is how it is displayed. A display draws people into your store; it shouldn’t drive them out. Many retailers think that displays are meant to help sell something. In fact, the main purpose of a display is to sell the merchandise around it -- to draw attention.

Displays should be attractive and exciting but never in the way. It is also important to use your fixtures as displays, but remember that the customer needs to be able to obtain the merchandise with ease. Also, displays should never be so high that they obstruct the view of the merchandise of department.

Remember that your store needs to welcome the customer. If you make it difficult for the customer to walk through the store, they will stop shopping there.

Your displays should often include signage. However, nothing is more upsetting than seeing hand-made signs. In-store signage is very inexpensive and improves store image.

Descriptive signs such as “Summer,” “Spring,” “Just In,” etc. help the customer find merchandise that otherwise may go unnoticed. Be careful: As helpful as signage can be, too much can look overdone and cluttered.

Some retailers think that signage is unnecessary. However, proper signage plays a key role in your merchandising -- it tells the customer where your merchandise is, and it presents them with merchandise they might not have known you carried.

As you can see, there are a great many reasons why you could be driving your customers away. Many retailers do this without even knowing it. These problems can be easily corrected, which can bring higher profits if followed and maintained over a period of time.

In today’s economy, there is little room for mistakes of any kind. The most important people in the retailer’s business life are the customers. Sometimes that can be easy to forget. Take a close look at your store. Are you making it difficult or easy for them to buy?

Copyright (c) Elements of Success; David Wing and Retail Advisors. All rights reserved. For reprint permission, contact David Wing at david@retailadvz.com, or 1-800-624-5261. Visit the Retail Advisors at http://www.retailadvz.com. Helping Independent Retailers Since 1988.