Why Does Your Bike Shop Exist? And Why Should Anyone Care?

As of December, 2013 Simon Sinek’s Ted Talk, How Great Leaders Inspire Action, was ranked number three of most watched Ted Talks with over fourteen million views. And deservingly so, many businesses have used Sinek’s talk to guide their strategies. The talk is referenced in dozens of books and Specialized, Trek, and Cannondale have all used the talk in presentations to their retailers. One of the reasons the video is so popular is because Sinek explains how inspired leaders and organizations think differently than everyone else. They do this by first defining why they do what they do. Then they say how they do it and finally, what they do. I will break that down a bit further.

The Golden Circle. Smart leaders and organizations work from the inside out. Starting with why. 

What. Every bike retailer in the world knows what they do. These are the clearest definitions of their business and for many reading this book, the most common list of what bike retailers do:

• Sell bicycles, equipment, and apparel
• Repair bicycles
• Fit bicycles
• Coaching and/or consulting

How. Many bike retailers can even define how they do it. This is what many people in business refer to as their unique selling proposition, or USP. This is what makes doing business with one IBR better than shopping from their competition. Here are the most common answers I hear to how people do what they do.

• Perfect location
• Great selection
• Experienced and highly trained staff
• Family owned
• Detail oriented
• Fastest turn around
• Competitive prices
• Awesome shopping experience
• No intimidation or pushy salespeople

Looking at this list, many retailers will agree that those are all things their business offers to their customers. That’s the catch, every IBR believes they offer these things and no owner or manager will say otherwise. No bike retailer in the country will tell their customers, “We have a crappy selection of bikes, moron employees, and we do really shitty work.” If everyone is offering the same thing, what makes anyone truly special, different, or unique?

Why. Where companies struggle is defining why they do what they do, and to quote Sinek “It is not to make a profit, that is a result and it is always a result. By why I mean, what is your purpose, your cause, or your belief?  Why does your organization exist? Why do you get out of bed every morning? And why should anyone care?” When retailers effectively define why they do what they do, they are speaking to the emotional center of their customers. Here are some of the best I have heard.

• We live and breathe triathlon.
• We believe you deserve the best cycling experience.
• We believe the bike should never be an excuse.
• We believe cycling will change your life.
• We want to grow the Portland commuting scene.
• We provide a service with a performance benefit.
• We want more cyclists riding more often.
• We are mountain bikers to the bone.

When retailers define why they do what you do, many of the day-to-day business choices become a lot easier. For example, let’s pretend a retailer has defined their why as, “We live and breathe triathlon.” What brands do they carry? They carry brands that have a dedicated focus to triathlon. What type of people do they hire? Triathletes, preferably people who live and breathe triathlon. What publications do they advertise in? They advertise in publications that triathletes read. What events do they sponsor? That’s easy, they sponsor triathlons. What would be the best way to grow their business? Possibly with swim and run gear. People do not buy from businesses that have what they need; people buy from businesses that believe what they believe. 

If you found this post valuable, it would be great if you shared it. Thanks - Donny

Where Loyalty Programs Go Wrong

One of the oldest sales strategies is to reward repeat purchases. An old school example would be your neighborhood coffee shop that had a punch card telling you that after you buy nine lattes you’ll get the 10th for free. A more recent example would be when checking out at Petsmart or Petco (or thousands of other retailers) they will ask for your phone number, pull up your profile, and offer the lowest price possible on every bag of dog food.

If you're thinking of running a loyalty program I've put together some quick tips.

Do not call it a loyalty program.
These programs are not the definition of loyalty. These programs are about bribery. You are paying your customers to be repeat buyers. Treat them as such. Don’t paint a happy picture over it. People are smarter than that.

Instead I would brand the program after the business. Donny's Bike Shop Carbon Club or Donny's Bike Shop Deals. 

Make it digital.
Having your customers carry a punch card is silly. Put their purchases in your POS system and track it digitally. When it is time for them to receive their tenth inner tube free, just tell them. Customers will thank you for tracking the little things and will recognize the value of giving you repeat business.

Don’t ignore the data.
The primary value for Petsmart and Petco is not in having a repeat customer, that is a byproduct. The big value is in having thorough data of their customers’ shopping habits. By recording their customers purchases they will have a detailed understanding of what inventory to carry, when people or more likely to buy dog toys, when people are likely to test a new brand of food, and so. No reason why the same data can't work for bike shops. 

Consider having the customer buy in.
Rather than discounting for loyalty, Amazon sells loyalty through their Amazon Prime membership. For $79/year (soon t be more) membership gets you access to all sorts of rewards including free or discount shipping, free streaming of movies, and other discounts.

In a bike shop you could sell a quarterly or monthly membership package that gets people buying now for value given later. 

What are some loyalty program you run? If you have a moment to comment or share it would great to hear from you. -Donny

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Check out the book. Leading Out Retail is a creative look at bicycle retail and teaches retailers simple strategies on how to increase profit through service, what the most important question to ask every customer is, and how to manage the dreaded Timmy Factor.

What Happens Before We Buy?

Have you ever visited a store and saw something awesome, then went home and checked it out online, then asked your friends about it, and then went back to the store to buy it? 

I like to call these points in time, micro conversions. Nearly every purchase we make is preempted by a micro conversion or a series of micro conversions. When someone is overwhelmed by micro conversions it can become too much to handle. The desire to purchase is like an enormous weight on their shoulders. These are the people that walk into the store, throw down a credit card, point to a bike and say, “That one. Now!” 

In bike retail it’s easy to focus on the macro conversion (when someone makes a purchase). That’s where we find the glory of the sale, that’s where the commission is, and that’s when we feel the satisfaction of a job well done. 

However, I like to remind retailers- without a healthy strategy around acquiring micro conversions, we will never see macro conversions.

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The True Definition of Bike Shop Marketing

Merriam-Webster defines marketing as “The activities that are involved in making people aware of a company’s products, making sure that the products are available to be bought, etc.” I would confidently say that this is the most boring definition of marketing I have ever read. Instead I believe that effective marketing- unlike advertising or branding -means only doing two things.

1. Maintain a positive connection with customers.

2. Be extremely helpful.

How do you maintain a positive connection? How are you being extremely helpful?

Thanks for reading. If you found this valuable, it would be great if you shared it. Thanks- Donny

Sales Per Sq. Foot in Bike Shops? Take A Guess.

If we were to center a microscope over brick and mortar retail what many people tend to find is that it’s a real estate game just as much as a retail game. If an IBR can earn significant dollars per square feet then they’ll have opportunities to set up business in a location with great traffic, parking, and amenities that facilitate a positive shopping experience. If they cannot earn the dollars per square foot then they’re blocked out of the prime locations and will work harder to convince customers to seek them out. This is how the phrase, “We’re a destination location” was born.

Sales per square foot is a popular metric used in the retailing industry and is simply the average revenue a bike shop creates for every square foot of sales space. Investopedia, a website dedicated to educating people on finances, investing, and more defines sales per square foot like this, “Sales per square foot is used by businesses and analysts alike to measure the efficiency of a store’s management in creating revenues with the amount of sales space available to them. The higher the sales per square foot, the better job management is doing of marketing and displaying the store’s products.”

Signature Cycles. It would be a safe guess to say they are outside of average for bike retailers.

According to the National Bicycle Dealers Association the average square footage of a bike shop in the United States is 4472 square feet.  In a survey done by RetailSails, a retail and consumer goods consulting firm, they measured the average square footage of the nine most successful retailers in the US. They found that the average retail space of Apple, Tiffany, and Coach was similar to bike shops at just under 5000 square feet, the difference was how much those stores earned per square foot- and it was a drastic difference.

Apple was the runaway leader by far, earning $6050 per square foot nearly double over second place Tiffany & Co. The yoga-inspired apparel store Lululemon came in third at $1936 per square foot. And what about bike shops? Depending on their size a bike shop will earn between $100 and $250 per square feet.  While most bicycles are more expensive than most Apple products, and require a highly knowledgeable and educated staff, they have the same earning power as a low-end department or a RadioShack.

It’s this kind of earning disparity that tells us bike retailers are clearly playing the retail game, not the real estate game. This means there will rarely be a bike retailer next to an Apple store, Tiffany & Co. or even a Lululemon. Most IBRs simply can’t afford to run a profitable business in those locations.

Since IBRs are playing the retail game they have to convince people to find them and when they do, the people working at a bike retailer have to win them over with an engaging experience, incredible product knowledgeable, and a rooted sense of trust with all cyclists walking in.

Thanks for reading this far. I know you're busy, but if you found this valuable it would mean a lot if you shared it. Thanks - Donny

Can You Stop Using the D-Word?

In the bicycle industry many retailers refer to themselves as an IBD or Independent Bicycle Dealer. IBDs have often classified their work as selling bicycles, bike repair, cycling apparel, tools, and accessories. However the IBD is an aging dinosaur in need of a new moniker.

I believe that there is a difference between an Independent Bicycle Dealer and an Independent Bicycle Retailer (IBR or simply bike retailer). An IBD is a dealer and, just like a drug dealer standing on the corner, they schlep a product. Moving product as fast as possible with little or no concern to who buys it or what they do with it. An IBD doesn’t care about the community, an IBD doesn’t care about their reputation, and an IBD will do anything to make a sale. The IBD discounts, cuts deals, screws over their vendors and their customers. They look for the easiest way out of everything while trying to snatch every dollar from the people silly enough to buy from them.

An IBR on the other hand is constantly focused on creating a positive shopping experience. They care about the look of their store.  They never stop striving to improve the services they offer. They work to cultivate a positive community, and the IBR creates a lasting engagement with their customers. The IBR never needs to cut corners or slice prices, their customers recognize their work and see value in everything they do. The IBR may not be cheaper, but they are different, they are better, and customers see themselves as partners.

Are you an IBD or an IBR?

Thanks for reading this far. If you found this valuable it would be awesome if you could share it. Thanks - Donny

Facebook for (Bike) Retailers

Your Facebook post was brilliant but no one liked it, commented on it, or shared it. So what happened? Are you wasting your time on Facebook? Is social media really worth the time and effort?

This quick lesson plan teaches you the basics of being awesome on Facebook. This is not a strategy, this is tactical! I wrote it for bike retailers but really, these rules apply to anyone- big or small- brand, business, or person. 

Winning at Facebook. A How-To Lesson Plan for Bike Retailers. from Donny Perry

If you found this valuable I would appreciate it if you took a moment to share it. Thanks - Donny

When Bikes Ruled The World. A Trip Back In Time.

Imagine a moment in time when bicycles were the biggest topic for everyone to be talking about. It happened and greatly influenced bike culture today. 

The greatest year to be a bike retailer in the United States was 1972-1974. These are the years many industry veterans refer to as the Bicycle Boom. Time Magazine said it was “the bicycle’s biggest wave of popularity in its 154-year history.” In the early 1970s there were approximately 15 million bicycles sold each year which, for the first time in decades, surpassed car sales. To create a sense of how big this boom was, seven million bicycles were sold in the US in 1970- and only 200,000 of those bikes were lightweight 3-speed or derailleur equipped bikes geared toward adults. The majority of bikes sold in 1970 were children’s bikes, approximately 5.5 million. By 1972 the bikes for adults grew 40x with sales breaking 8 million making it the first time since 1890 that nearly one-half of all bicycle production was geared for adults.  The Bicycle Boom was so enormous that the US has yet to match those annual sales numbers.

We can give credit to the Baby Boomers for sparking such growth in the cycling during the early 70s. As many of the Boomers were in their early twenties they were seeking inexpensive transportation and a new form of recreation and exercise. Boomers also had an eye on reducing pollution and they saw the bicycle as their answer.

But the Baby Boomer’s weren’t the sole cause, it was a perfect storm of events as manufacturers in Asia were producing lightweight and affordable bikes for adults. Brands like Fuji, Miyata, and Nishiki are credited as the brands of the Bicycle Boom. They were so dominant that they caught US manufacturer Schwinn on their heels, unable to produce a bike that could compete on quality and price. This arguably started Schwinn’s 20-year demise from their throne as the brand of choice in the US.

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National Geographic, May, 1973. Grove, N. “Bicycles are Back, and Booming.”

The three largest US-based bicycle manufacturers still operating today were all born from the 70s Bicycle Boom; Cannondale in 1971, Specialized in 1974, and Trek in 1976. Many of the bike retailers in the country also began in the 1970s and the ones that were already in existence saw massive growth. Bicycles were in such high demand that bike retailers weren’t the only ones cashing in- department stores, gas stations, and small garage shops popped up like flies, selling whatever bikes they could get their hands on. Prior to the boom many bike shops were known as one-stop fix all service centers and you were just as likely to find a grease covered mechanic working on a lawnmower as a bicycle.

If bike retailers that started up in the 70s played their cards right, they rode on four more distinct waves in the cycling trends. They likely continued to sell lightweight, Asian-made road bikes in late 70s and early 80s. They expanded into BMX in early 80s but by the end of the decade were focused on the massive growth of mountain biking fueled by American manufacturers like Specialized, Cannondale, and GT. Mountain bikes would carry them through a good chunk of the 90s until 1999 when road cycling made a monstrous comeback on the coattails of Lance Armstrong’s Tour de France performances. As the 2000s came into focus many bike retailers could have also jumped on board with the growing army of triathletes.

From 1970 to 2000 IBRs grew from sales and service to true community hubs. People would walk into their neighborhood store, grab a magazine, and talk about the sport. Discussion bounced from newest bikes, to comparing technologies, dissecting suspension systems, and which riders were lighting up major tours. Club rides started at the IBR and when they finished everyone would grab a beer from the communal fridge. Everyone knew each other’s name and every store had a distinct club-like feel. If you were in the club, you were in for life. If you weren’t in the club, you were only a purchase and a bike ride away from earning the secret pass to belonging. It was a true subculture. Bike retailers were their own niche and the center of all cycling knowledge for their community.

If you read this far and found this article valuable, I would appreciate it if you shared it. Thanks - Donny

Is it Time to Fire Grumpy Bike Mechanics?

They're surly, they're grumpy, and they hate anything that isn't within their tight criteria of a legitimate bicycle. I'm talking about the angst-filled bike mechanics. 

Stored in my closet I have a small, but obscure collection cycling movies. One of my favorites is the 1998 French-Canadian film, 2 Seconds. The movie follows Laurie, a professional downhill racer who loses her job due to a string of irresponsible behavior, and returns home to Montreal to become a bike messenger. There she struggles for acceptance from other messengers, is confused by the job, and questioned by her brother if she is doing anything productive with her life. After crashing her bike Laurie finds a nondescript bike shop hidden in an alley and there befriends Lorenzo, a cranky, surly, ex-pro roadie who is owner and operator of the shop.

The two characters have a wonderful back and forth banter throughout the movie. In one conversation they play a game of one-ups-manship by sharing war stories from their life as professionals. Lorenzo show his scars, Laurie shows hers, Lorenzo shows the tan lines that have permanently burned into his skin. Laurie describes how lackluster sex is with her girlfriend thanks to the saddle sores.  If you haven’t seen the movie, it is worth hunting it down.

I bring up the movie because the character Lorenzo was portrayed perfectly by Dino Tavarone. His portrayal of the character embodies this idealized vision of what many people believe a bike mechanic is and how we should expect one to act. Lorenzo is older, likely in his 50s and has a salty demeanor. While he appears to be working a disorganized clutter, you have a sense that everything has been put in its proper place. He communicates in grunts and stares, and if you dare walk in with a non-Italian bike he will lash out at you for such an insult to his craft.

His social manner aside, Lorenzo does have some skill. He displays an air of knowledge and experience so deep that no one would question the quality of his work. Some would even go as far to say that Lorenzo is a master mechanic or even a guru. Yet even with these skills it’s hard to ignore the one glaring truth- Lorenzo is an asshole. In a garage all by himself he does fine but he can be a nightmare in a retail business with a mixed bag of coworker personalities, customers bringing in department store bikes, and riders who are repeatedly asking to borrow his tools. Modern day bike retail would be Lorenzo’s nightmare.

What will be Lorenzo's future? Will he learn and adapt or will he be replaced by a new generation of technicians?

Thank you for reading this far. If you found this interesting I would appreciate it if you shared it on your social channels. Thanks - Donny. 

Getting Paid Hourly? 5 Ways You Can Get Screwed!

If you’re working for a bike shop and getting paid hourly there are some things you should be aware of.

1. Minimum wage in the US as of 2009 is $7.25 an hour. Anything less is illegal.

2. Your boss is not required to pay overtime for Saturdays, Sundays or holidays unless you went over the forty hour mark on those days.

3. If you’re under 20 years old it is legal to pay you $4.25 per hour for the first 90 days of employment. Luckily it is illegal to terminate someone making $7.25 or more and replace them with an employee making $4.25.

4. Many states do not require breaks or meal periods for hourly employees.

5. While the laws are very clear that overtime happens after 40 hours in a seven day period, it is not so clear on how many hours per day before overtime is required. Working 11 hours in one day may not equal 3 hours of overtime.

If you’re an owner or manager- don’t be a jerk, don’t do these things.

In the US, you can learn more about the labor rights by visiting the Department of Labor. 

Thanks for reading. If you found this article valuable I would appreciate it if you shared it on your social channels. Thanks- Donny