Analyze 5 key areas to maximize revenues for your store

Growing your business takes strategy. How often does that strategy turn to looking inside your store’s four walls? Are you first analyzing what could be improved internally?

As with any difficult business decision, strategic management requires manageable action. To start your internal analysis, there are five main areas to consider:

• Investing in a Point of Sale system
• Ensuring appropriate inventory levels
• Revamping the publisher-to-wholesale dollar ratio
• Manage cycle counts on your inventory
• Increase stock on newly released titles

With the number of new and popular backlist titles available each year, it seems impossible to effectively manage your business without a POS system. Implementing the system that best fits the needs of your business is the first step in growing your business through internal improvements.

Martha Brangenberg at Charis Christian Bookstore in Largo, Florida, believes strongly in the value of the POS.

“Using a POS system helps me keep my sanity! Having the Christian books database at my fingertips allows my staff to speak knowledgeably to our customers.”
Once your POS is in place, stock inventory levels will be more manageable.

Steve Pickering of Lemstone Christian, a Parable Store in Marion, Iowa, also sees the value of the POS.

“At any one time, you can value your inventory by vendor, category, department number and more,” Pickering said. “Managing an open-to-buy would not be possible without a POS system that can calculate on hard quantities and cost.”

Understanding your store’s inventory levels can free up open-to-buy dollars, ensure you do not run out of stock on top-selling titles and help you better balance your title category/publisher inventory.

In addition to POS systems and inventory management, revitalizing your publisher-to-overall-wholesale-dollar ratio is imperative. Let me help break it down:

1. Write down your total business revenue for last year.

2. Divide that in half (average margin). This will act as your baseline.

3. Factor in the number of turns you want for your inventory per year (A healthy number is three turns per year).

4. Next, break out the revenue your store makes by each publisher, in dollars. Then convert these figures into percentages.

5. Now, look at the dollars made in each category (Bibles, Children’s, Fiction, Gift, etc.) by each publisher and again convert these figures into percentages.

6. Finally, compare inventory dollars in each category to the publisher’s share.

If this still seems complicated (and it is), feel free to reach out to me so I can walk you through an example. Email me at This email address is being protected from spambots. You need JavaScript enabled to view it.

After appropriately calculating your publisher-to-wholesale dollar share for each category, implement cycle counting on your inventory. Cycle counts can be done monthly, quarterly or seasonally and will help maintain your stock levels, showing areas that are in need of inventory reduction. Remember, each publisher handles returns differently, so work with each company separately to understand their process.

Here is a suggested monthly cycle rotation for your store:

Week 1: Bibles, Reference, Curriculum

Week 2: Trade books

Week 3: Children’s

Week 4: Gift

These internal preparatory actions will now allow you to grow your business’ revenue. Your final action is to ensure that your store’s shelves are stocked with new titles upon their release date. Anytime a customer visits your store and does not find the title they are looking for, the likelihood of that customer returning on a later date to buy the book is slim. Many times, customers will not even give you the opportunity to order them a copy, because they can simply do that themselves. Having the newest releases available keeps your store relevant in the eyes of a consumer, in addition to stocking the appropriate mix of best-selling backlist titles.

Growing through increasing revenue is the goal of most for-profit organizations. Though building revenue can be challenging and may mean implementing a change in your store, consistent internal evaluation is a must and will benefit you in the long run.

Benjamin Franklin had it right. “Without continual growth and progress, such words as improvement, achievement and success have no meaning,” he said. Taking action and committing your store to an internal review will make your business more profitable, helping you become a destination point for your community.

With more than 30 years of experience and numerous awards, Scott Etheridge is an expert in sales and development. A 16-year veteran of the Christian retail industry, Etheridge has produced top sales accolades, including 14.8K Twitter followers and a Klout score of 61. He serves as manager of sales development at HarperCollins Christian Publishing, and is responsible for promotions and sales analysis. Connect with him on Twitter at @scottetheridge.

Economics must dictate how you invest in your customers

Are all customers truly equal? Should you really treat them all the same? Under normal circumstances, yes—but not when investing in marketing.

That may seem shocking at first. In reality though, you make these types of decisions every day.

The first thing to keep in mind is that the foundation for all of your advertising should be catalogs. Catalogs drive more revenue, more traffic or more goodwill than email, social media and any other form of advertising. Sending catalogs regularly to your customer base is vital to the success of your store. Believe it or not, after a number of years without their big book, J.C. Penney is getting back into the catalog business. The company realized it was missing a significant piece of the multichannel approach to reaching its customers.

I’m not suggesting you don’t need to send emails or post on Facebook. I am saying, however, that those functions need to be stacked like building blocks onto a solid base of printed catalogs. Your first priority should be to regularly send catalogs to the consumers most likely to respond, then reinforce them by other means.

But, as I said, you can’t treat all of your customers the same when it comes to sending them something as significant as a catalog. Mailing a catalog isn’t as inexpensive as other marketing vehicles, so you need to make sure you’re taking as much care as possible when deciding which customers to invest in. How picky should you be though? Should you mail based on who has spent the most money this year? Or how recently and frequently they’ve shopped? On the surface, some combination of these factors seems to make sense.

But what if I told you that when it comes to how likely it is for someone to respond to a catalog, the data shows that the distance the customer lives from your store is twice as important as how recent they’ve shopped? Or that the number of times they shopped in the last three months carries as much weight as the number of times they shopped a year and a half ago? This might drastically change how you think about your mailing strategy.

Let’s assume you can easily pull customer lists using this information. How deep into your mailing list should you be mailing each month? For this example, I’m going to call customers “active” if they have shopped in your store in the past 18 months. Looking at this subsection of your mailing list, you need to know that the bottom half of these customers only generate about 10% of your revenue. That’s a lot of customers for a tiny bit of revenue. Yet mailing to each of those “halves” takes the same amount of investment. Yes, you need to periodically mail to those customers, but I would not recommend doing it more than once a year unless you’re already mailing to the top half of your list every month.

In addition, keep in mind that your mailing list is one of your most valuable assets. Are you consistently asking your customers for their email addresses? Have you taken advantage of email-append services that will help you locate your customers’ emails? Are your associates verifying address information? Keep your list clean to reduce catalog waste.

Because of the way catalogs are mailed, many are thrown directly in the trash due to a lack of forwarding. But keeping your list updated by utilizing National Change of Address (NCOA) services from the U.S. Postal Service will take your list cleaning to another level. Some stores have NCOA services available to them through their mailing partners, helping to get catalogs into their customers’ hands even if they’ve moved. These services will update addresses for customers who have moved as far back as four years ago, and then that data can be pushed back into your POS system so your in-house list is as current as possible. And after making NCOA updates, you can then determine which customers you want to mail to, even based on how far away they live.

Having enough resources to invest equally in every single customer would be wonderful, but that isn’t the reality of today’s retail model. When your customers walk in the door, each and every one is on the same footing, but when it comes to investing in them, it’s crucial that your decisions are based on all the data you have and that you’ve taken advantage of every tool available to you. Data can make a huge difference in the success of your catalog mailings—if you use it wisely.

In the next issue, I’ll be writing about using data to maintain promotion-stocking levels of every product in your catalogs and also how to evaluate the success of a catalog. Feel free to contact me with any questions, comments or potential topics at This email address is being protected from spambots. You need JavaScript enabled to view it.

Erik Ernstrom has worked in the Christian products industry for 24 years. He started as a receiver in the backroom of an independently owned Christian retail store, eventually managing that store. He has also managed a customer service department that served 300 Christian retail stores.  He now works for The Parable Group, managing the business analytics department that yielded nearly 100 million customer contacts last year.

Simple steps encourage shoppers to frequent your business

Change, downsize, sell out or close—these are the options for Christian retailers in light of today’s economic challenges. For our store, I choose change—as opposed to the slow onset of rigor mortis in sales and profits. What about you?

Congregation-based stores must find their focus to maximize sales

As I reflect on my entry into the world of Christian retailing over 20 years ago, I’ve pondered the transitions that have made our industry what it is today. Let’s dig a little deeper into these changes as I offer some suggestions that church bookstore managers can put into place now to maximize success.

Data can be scary. There, I’ve said it. Elephant in the room. Eight-hundred-pound gorilla. Whatever you want to call it. To most store owners, number crunching and data processing is intimidating, and rightfully so.

Many years ago I was sitting in a conference room with a big white board on the wall. The team had spent many hours brainstorming and planning the next big promotion that customers would just love—at least we hoped they would.