Sam Walton is a good model for low-cost business and marketing. Do not miss his example. If you look at the lists of characteristics of successful people, you likely won’t find thrift or even greedy among them. However, in the case of Sam Walton, the man who for a long time remained at the top of the list of the richest people in the world, we must consider him an important factor in his success. Although the founder of the retail chain Wal-Mart drove an old car and didn’t tip in restaurants, his stores conquered the United States so perfectly that the competition was helpless against them.
Lehits entrepreneurs are being inspired everywhere. It doesn’t matter that it’s a big company. Every great work started at once.
We’ll be interested in how he does this And what inspiration can we derive from it.
When Sam Walton was demobilized after World War II, he took all of his savings, borrowed some money, and bought the franchise store franchise from Franklin stores. It was working fine, Because it follows the principle of “small margins, big size” ( He thought the same way, for example Tomash Bata). He quickly became the series’ best seller. He actually had nine stores in the early 1960s, but he wasn’t satisfied. Love the concept of discount stores. What we can also expect from a humpback.
To conquer the market, you need to be the best, not just the cheapest.
First step strategy
Initially, he persuaded the Franklin Department of Stores to walk in this direction, but he did not. So he chose his brother and set up the first store of Walmart’s future network. But it had a trick. Discount stores are no longer a novelty at the time, and in most large cities you will find one. However, there was a countryside that the chains had not yet rushed. On the contrary, he was close to Walton because he was born in such a small town. Thus, instead of spending money fighting competition, he set out to occupy a virgin land ( Or “blue ocean” as it is written in the book Blue Ocean Strategy)
It was a great move. City-center merchants dominated their future markets, with soaring prices and little understanding of customers. He didn’t have much to do with them. More importantly, when competition from discount chains began wondering how Walmart could grow three times faster than it did, it was surprised to find that it couldn’t follow it in its area. Walton made his choice Places big enough to feed his shop, but not others. So he didn’t have to worry about anyone spoiling his business.
Many entrepreneurs believe that this strategy only works when there is no competition. But even Sam Walton got into places where, of course, there were some merchants. He just came up with another sales concept that turned out to be more successful. Importantly, he did not accept other followers in the conquered area, who did not pay to move with him to a relatively small market.
But it also works the other way around. If you have a store in the countryside or in a smaller city, you should take into account that although the chains will not invade you there, they will entice your customers to shop with them. Don’t believe it just at low prices. If the merchants in small American cities did not let themselves calm due to the prosperity and stop caring about the needs of customers, then Walton likely lost the battle with them. They had the advantage of a home playground where everyone knew them. So Walmart had to be Not only the cheapest but also the best. It was necessary to “fit” and adapt to the mentality of the people. For this reason, for example, workers came to greet shoppers at the door, help them put their purchases in their bags, and bring them to the car.
Entrepreneurs often complain that success in a small town is unforgivable. this is not true. People will be happy to accept your success if they get something from it. Above all, better care. So if you want to occupy your market, you have to be the best, not just the cheapest.
Save where customers can’t see it
Of course, famous cams cannot be limited to using an old car. His stores rescued wherever possible but so the customer wouldn’t see or feel any of them. Young men greeted him with a smile at the door and offered him purchases in the parking lot. This is not what the savings search looks like. But behind the scenes, it looked different. Which – which Today, almost all goods have a barcodeTo be able to quickly check-in at the box office, thanks mainly to Sam Walton. This saved time and money. Therefore, it was also advanced in using computers, data sharing and automated logistics management.
Let us stop at labor costs. The famous humpback certainly didn’t overpay its employees. However, its stores do and operate better than the competition. why? Again such a wonderful step. Moneychangers who only read merchandise bar codes do not have to be qualified and thus are better paid. Then the “subsistence” factor consists of the aforementioned assistants, who can be cheap part-time workers, since the main purpose of their work is desire and success. Otherwise, how to save? Give employees a share of the profits. Thus, Walmart has about 2 million enthusiastic partners, who are paid according to the company’s performance.
So Walton’s policy was to save traffic, however Don’t skimp on factors affecting customer satisfaction. However, if you look at the many local traditional stores, you can see that the owner has no idea what he can provide and what he cannot provide. The savings are usually reflected in the places the customer feels the most: underpaid saleswomen, poor lighting, equipment wear and tear, neglected cleaning … and unfortunately, that also reflects on the impression of shoppers. Although old calculators have now been replaced by more modern technology due to electronic records of sales, they are usually the cheapest solution, raising the customers’ feeling of unprofessionalism.
Sam Walton says a smile costs nothing
Even today, Walmart follows three of Walton’s original rules: respect for people, customer service, and the pursuit of excellence. Above all, the “three meter” rule says: “I promise you that as soon as I reach three meters from the customer, I will look in his eyes, greet him and ask him if I can help him.”
I already mentioned that Sam Walton came from the same city he later set up his stores. So he knew the mentality of the locals and came out of their way with a culture that differs from the urban and cosmopolitan nature of the other cuts. He tried to make it to him The stores became part of the local communityAs was the case with the small indigenous merchants who replaced them. Finally, go with the “Satisfaction Guaranteed” tagline on store signage (to satisfy your customers, download the in-store marketing e-book).
Successful merchants, on the one hand, are in keeping with the times and introduce the necessary innovations, on the other hand, they are rooted in the local environment. A common mistake is for an entrepreneur to take one of these two penalties, but not both. To succeed, it must wash out both the modernists and the traditionalists. And above all, always remember that a smile does not cost you anything, even though it is a hard currency ( I will also convince you of that in the article The economic value of a smile).
Advertising of foreign funds
Wal-Mart uses up to ten times fewer flyers than competitors. It doesn’t spend a lot of money on other forms of advertising, such as TV ads. Sam Walton decided to “take care” of his suppliers. He simply preferred merchandise that customers knew well. They got used to it or knew about it through advertisements. Then it was enough for such products to appear on the shelves, and this in itself led to an increase in sales. On the contrary, the competition spent large sums to promote itself.
Walton was also good at calculating how costly promotional discounts are. Therefore, he came up with the principle of “Always Low Prices”. It has one big feature. Customers don’t get discounts like raisins, but they buy everything.
Even today, we can usually meet with support from suppliers. But you should always consider whether these wings, posters and other promotional materials are used to increase your overall turnover, or just to increase sales of one item at the expense of others.
The Walmart example also shows that customers can be attracted without being bombarded with discounts. the important is , To make them feel good when shopping.
How to succeed against a lot of competition with the help of intuitive marketing
Among the chains that were Walton’s rival in the beginning, they do not exist today. They cannot provide exclusivity. This is the essence of success. Lehits entrepreneurs have facilitated this with the attitude of global companies, which, with few exceptions (such as IKEA), cannot be different enough from others. Basically, they’re not difficult to get over if you don’t get carried away with imitating them. If the chains say customers just want discounts and don’t want a human approach, then do the opposite. You have nothing to lose, as you still cannot be a price competition winner.
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