Fall 2006

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How to Make $100,000

David Stern offers tips at SSIA's 102nd Annual Convention in Orlando.

"I've been very successful and have made a ton of money in shoe repair," David Stern told attendees of SSIA's 102nd Annual Convention in Orlando. "The opportunities are there for you to make a lot of money too." Stern is a second-generation shoe repair business owner. His father bought three stores in 1946 and David worked in the stores from the age of 10. At its peak, the business grew to include 50 shops

in the Washington, D.C. area. He currently has 20 stores.

Under his current business plan, Stern opens a location with an employee, builds up sales for about a year and, if he feels the employee will be successful, enters into a license agreement. The agreement typically lasts eight to 10 years after which, the employee will own the shop.

Customer Service is Key

Success starts with customer service, Stern says. He shared six truths about customers he provides to all of his employees.

1. Customers are not outsiders to our business. They're the reason for it.

2. Customers are not an interruption of our business. They are the sole purpose for it.

3. We are not doing our customers a favor by being here. They do us the favor of coming to us.

4. Customers are the most important visitors we can ever have, whether the visit by mail, phone or in person.

5. Customers are not statistics. They are flesh-and-blood people. They have feelings and biases, and they deserve courtesy and respect.

6. Satisfying customers needs isn't everything in our business, it's the only thing.

Stern's mission statement also reflects his commitment to customer service.

• We will exceed customer expectation 100 percent of the time by:

• Greeting each customer warmly within 30 seconds of entering the store.

• Quickly and enthusiastically working with their order.

• Going the extra mile to make sure our customers are happy with our service.

• Thanking our customers at the close of each transaction.

• Demonstrating respect and dignity to customers and fellow workers at all times.

Once you have customers, Stern emphasizes, do everything you can to keep them. He offered the following reasons why customers leave a business.

• 1 percent die

• 3 percent move away

• 5 percent have friends recommend someone else

• 9 percent leave for competitive reasons

• 14 percent leave because of product dissatisfaction

• 68 percent leave because of the attitude of indifference of an employee

Handling Complaints

"The customer is always right," Stern says. "When they complain, it is because they feel they have been wronged."

He shared  the following newsletter clip.

Five magic words will go a long way toward helping you maintain goodwill when answering a complaint. Begin your response with, "I agree..." End your response with, "I am sorry..."

Almost any complaint has some merit. You should acknowledge it immediately. Then state your position on the matter. Finally, express regret.

When someone does complain, assume the complaint is legitimate. Try the American Express approach. Take a challenged charge off the bill, then investigate. Only a small number of customers (between one and two percent) intentionally try to swindle a company.

Location, Location, Location

After customer service, Stern focused on location as a key to success. He offered several tips for finding a successful location.

• Look for high SAT scores in area high schools. This is an indicator of higher income.

• If you're going into a mall, look at the anchors. Nordstrom, Saks, Lord & Taylor and Bloomingdales are good indicators of higher income. J.C. Penney, WalMart, Target and Sears are not.

• Locate near shoe stores such as Johnston & Murphy, Bostonian, Stacy Adams or Church. They've done the research about their locations, and they make shoes you can repair.

• In a mall or strip center, you want to be near other services such as hair cutting, nail salons, tailors, jewelry, optical, bank or watch repair. You should be near a mall entrance as well.

• In downtown locations, share space with a dry cleaner or other service provider if the space is too big. You need a location where people wear suits. Transit centers work well.

• Expect to pay $2,500 to $4,000 a month in a good location. You should be able to earn $4,000 to $6,000 a week.

• Sunday is the second business day of the week. Wednesday is the slowest. The busiest hours during the week are 5 p.m. to 8 p.m.

• Your name should include the words "shoe repair" so people know what you do. We used the trade name Cobblers Bench and no one knew what that was.

• In leases, negotiate maximum hours, such as 10 a.m. to 9 p.m. Otherwise, you'll be forced to open holiday hours in malls.

Sales and selling

• Retail sales should be 20 to 30 percent of your business. It takes months to build a repair business, but retail items sell right away. Do not carry items that are carried in local drug or grocery stores. Tell customers you are a higher end store. Limited space means you need to be selective in the items you carry. You should get a 100 to 200 percent mark-up. You get the highest mark-up from laces. Keys are big sellers, as are umbrellas.

• Evaluate retail items every year and get rid of what doesn't sell.

• You must be a sales person first and a repair person second. Sell protective soles, heel plates, shoe shines and waterproofing.

• Finding help is a challenge. But there are many people who have worked in factories overseas. You can train them to do heels, protective soles and finishing in four weeks or less. The rest takes another six months.

• Uniforms show professionalism and authority. They make it easier to sell products and services.

• Require prepayment. Explain to customers that you can't afford to have people not pick up their shoes. So you have two choices. Raise prices for everyone to make up for the dishonest few, or ask for prepayment and keep prices down.

• Customers use credit cards to pay for 85 percent of their purchases compared to 15 percent 10 years ago. You have to accept them.

• Find a  finder you can trust and buy what you need, when you need it. On-time delivery from your finder means money in the bank for you, not on your shelves. Buy what you need. Don't load up to save 10 percent. Don't buy anything just because it's on sale.

Advertising

• Sales go up when we advertise and down when we do not.

• Direct mail has worked best for us. We offer discount coupons. The amount is sizeable with no mention of men or women. We want to encompass everything.

• Yellow Pages advertising is important. We have large ads in the shoe repair section and smaller adds under luggage repair.

• We have also found Lucky 7 cards and Value Shoe Shine cards to be very effective. They bring customers back into your store and give you more changes to upsell repairs and sell retail.