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Sound Bites From a Seminar: Commit. Don’t Just Try.

BY Murray Forseter

When you attend as many conferences as I do every year, it’s invigorating to come away with new perspectives on retailing and what it takes to succeed. It’s dangerous, perhaps even sophomoric, to reduce a conference to sound bites, but at the risk of showing my business naivete, allow me to share some of the key takeaways from two days in late February in Sarasota, Fla., at the Service Management Forum for Multi-Unit Executives, produced by Service Management Group (SMG) of Kansas City, Mo.

“Change is certain. Progress is not,” said Jack Mackey, SMG’s VP of sales and marketing. Kim Lopdrup, president of Red Lobster, put it a different way: “It’s demoralizing to be in a company that is not growing.”

One way to achieve progress and raise morale is by enlisting associates in the effort and rewarding them for achievements. But make sure the reward is what they want. Joe Wheeler, executive director and founder of The Service Profit Chain and co-author of “The Science of Delight,” related how Prairie Store Pharmacy of Minnesota wanted to reward its pharmacists with a trip to Hawaii. As strange as it may sound, they didn’t want that reward, said Wheeler. They desired more access to their customers. “Understand what your employees value,” is the lesson to be learned, said Wheeler.

He advised retailers not competing on price to build a business that is emotionally attractive and significantly memorable, a concept such as Build-A-Bear Workshops. Of course, retail discipline is needed, as well. Build-A-Bear, said Wheeler, strictly monitors its “sounds and shoes to skins” ratios. Every 15 minutes managers check to make sure the staff is selling the right amount of add-on sales (sounds and shoes) to the number of skins (bears) sold.

There can be a tendency in retail and foodservice to focus on the selling floor, while behind the scenes employees are not given sufficient recognition. In restaurants, the kitchen staff usually works in the “back of the house.” Not so at Pat & Oscar’s Restaurants of San Diego. There they work in the “heart of the house,” said chairman and CEO John Wright.

Many companies have product experts. “Be a customer specialist, not a product specialist,” advocated Polly LaBarre, author of “Mavericks at Work,” citing as an example Vermont Teddy Bear Co. It doesn’t sell bears. It sells peace of mind, by solving last-minute gift-giving needs, especially for men at Valentine’s Day. And for the man who has second thoughts about sending a bear with an “I love you” salutation, the company can even stop a delivery after the bear is on its way.

In the most moving presentation at the SMG summit, Liz Murray exhorted the 200 attendees to “Commit. Don’t just try.” Liz Murray knows of what she speaks. Raised by loving yet drug-dependent parents, she dropped out of high school in New York City and wound up living on the streets. Yet she made a personal commitment to take responsibility for her actions. She went back to school, graduated and is now just six credits shy of a degree from Harvard. Her life story has been the subject of a TV movie and a “20/20” profile. She regularly speaks to teenagers and business groups about overcoming adversity.

Commit. Don’t just try.

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Wal-Mart to sell earth-friendly CDs

BY CSA STAFF

SANTA MONICA, Calif. As part of Wal-Mart’s “Earth Month” the company is selling more than 20 Universal Music Group titles that come with special earth-friendly inserts. The inserts are made with special seed paper and, according to the companies, can actually bloom into wildflowers.

The inserts, in addition to being good for the environment, also offer consumers three free digital downloads from Universal Music. Universal also said that a number of its new CDs will be packaged in third-party certified, renewable recycled board and recyclable paper.

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ODP urges rejection of Levan nominees

BY CSA STAFF

DELRAY BEACH, Fla. Office Depot is continuing to urge its shareholders to reject dissident nominees and elect the company’s nominees to its board of directors at its annual shareholders meeting this April.

In a proxy statement sent to investors, Office Depot said that Alan Levan’s proposed nominees would do little to help improve shareholder value. According to the statement, Levan’s company, Levitt Corp. has seen its share price fall about 93% over the past three years and that its subsidiary, Levitt and Sons, is in bankruptcy. Office Depot also noted that BankAtlantic, of which Levan is chairman and ceo and one of his nominees, is president of real estate, construction and development, share price has dropped approximately 75% over the past three years.

Office Depot also cited news reports that commented on Levan’s failing business ventures, as well as others that said that his nominees are not qualified to serve on Office Depot’s board of directors.

The company pointed out nominee Mark Begelman’s experience with Mars Music, a company he founded in 1997 that went bankrupt in 2002. According to Office Depot, many news reports attributed this failure to a flawed business strategy.

According to Office Depot, when Levan’s other nominee, Martin Hanaka served as chairman of Sports Authority from 1998 to 2003, the company saw its price fall by about 13%.

Office Depot stressed that its directors best understand the company and are well-suited to help the company grow.

“We strongly believe that removing two of the most experienced retailing executives from our board, including our current ceo who is driving the implementation of our strategic turnaround plan, would be highly disruptive, could delay the implementation of internal and external initiatives and could damage prospects for a successful turnaround,” Office Depot said in the proxy statement.

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