Our second email is from Nathan Isaccson from Beverly Glen in Los Angeles.
Nathan writes…. Dear Bob, thanks for your show, I listen to it at work and it helps me focus my thoughts on how I can do better tomorrow. My issue is that my family operates a DVD and Video game rental business, and we have been unable to think of a hook that will get people in the door, rather than go to a competitor of which there are quite a few. Competition is pretty tough as less people seem to be renting movies and the vending machines are also biting into our business.
Nathan, thanks for your email, I understand your position. It must be tough with ‘on demand movies on TV, Netflix and vending machines as well as other stores competing against you.
I also understand that the margins are pretty skinny. Nathan, the first thing to realize is that price is not the major influencer in the majority of purchases. Most business owners jump in about here and say “well it is in my business”. Nathan, I’ve been consulting to businesses for nearly 40 years and I’ve never known it to be true. The car industry says their business is about price yet look around………. There are lots of Mercedes and BMWs. Certainly not bought on price.
When you go to the supermarket, do you buy brands or generics? Most people buy brands even though they know that the generics are identical.
So you don’t have the lowest rental prices in town. Firstly ensure your store has a good ambience, maybe some music. You must always be really happy and friendly and call people by name if you can. Popcorn is cheap, perhaps give each customer a bag of popcorn that you pop fresh on the premises.
A few years ago we created a promotion for a company called ‘Civic Video’ where we promoted “If you don’t like the movie you rented, we will swap it for free”. At first they thought we were nuts……. The envisioned people renting Kings Speech or Mission Impossible and then bringing it back, swapping it and never actually paying for another movie in their life.
The reality is that people are honest. The promotion increased rentals over 200% and less than one quarter of one percent, that is 1 person in 400 returned the movie to swap.