How to sell to small to medium-sized brick-and-mortar stores

by Jun Loayza on October 15, 2010

brick and mortar sales

For the past 4 weeks, I have gone store to store selling our yet-to-be-completed mobile application.  When other startups focus purely on the technology and hope to make sales once they launch the product, our team has attacked both sides of the equation: sales AND product.

Who should read this post: A founder of an early stage, product-based internet/mobile startup that targets brick-and-mortar businesses.

What you will learn: How to sale to small to medium-sized brick-and-mortar stores when you don’t have a completed product and therefore no case studies or credibility.

How to sell to small to medium-sized brick-and-mortar stores

In the past 4 weeks, I have accomplished the following figures:

  1. 1. Approached 183 restaurants, cafes, salons, and retail stores
  2. 2. Spoken with 107 owners and managers
  3. 3. Found and converted 42 first-movers

What is a first-mover?

A first-mover is a business or user who jumps at the chance to use your product even though you don’t have any case studies, prior experience, or proof that your product will work.

How I found the first-movers

The answer is quite simple: I do NOT discriminate.  I choose a location and walk into every single store on that street and do not stop until I’ve approached every store.

An easy mistake: At first we focused only on stores that had a lot of Yelp reviews, had a Facebook or Twitter profile, or that had used Groupon.  This would help us identify first-movers and allow us to use our time effectively, right?

Wrong. Instead of saving time, we ended up spending hours on Yelp, Facebook, and Twitter trying to identify the right stores.  Furthermore, since stores are scattered across a city, we spent hours in the car traveling from one business to the next in search of the owner, wasting valuable time.

The solution: Choose an area that is densely populated with restaurants.  Spend all day in this one location and visit every store.  Don’t even hesitate or think, “This store would most likely not use my product.”  This kind of thinking gives you cold feet and causes missed opportunities.

There have been many times when I almost did NOT walk into a restaurant because I felt the owner would not want to use our product.  I end up walking into these restaurants anyways and come away with a potential client.  Don’t discriminate!!!  Walk into every store.

Face-to-face vs. the Phone Call approach

I tried both methods and stuck with the one with best results.

The face-to-face approach has by far had the most success.  Actually, it is the only successful method that I saw.

Everyone is selling a product to brick-and-mortar stores: Groupon, Living Social, Town Hog, SCVNGR, Four Square, Yelp, Google, etc…  The method that they primarily use is the phone because it’s the most cost efficient, making the phone call the most crowded method.

I called and pitched our product to about 20 restaurant managers and owners, the result = 0 meetings.  The reason:

  1. 1. Business owners are tired of sales calls – they get way too many everyday
  2. 2. Business owners are always busy – it’s too easy for them to say, “Sorry, I can’t talk right now because I’m too busy,” and then hang up
  3. 3. Business owners don’t understand new technology – you need to be in front of them to make them feel the benefits of your product

Use the face-to-face method when pitching brick-and-mortar businesses.

Casual dress vs. Professional attire

I converted more clients dressing casual than I did dressing professional.

The reason: business managers and owners hate sales people.

When I walked into a store wearing a collared shirt and dress shoes, the storeowners immediately saw me as a sales person and immediately put up a defense.  Business owners hate spending money, and if you look like someone who is going to ask for money, they will kick you out of their store.

When I began to wear chucks, jeans, and a casual shirt, I started to get a lot more positive feedback from owners.  When I said hi, they weren’t immediately put off by my clothing or assumed that I was there to sell.  The result is that they approached me with an open, receptive mind and I scheduled a lot more meetings and closed more clients.

No one cares how you do it.  They only care about the value your provide

I know you hear this advice all the time, but it’s still so easy to forget it in practice.

The first version of my pitch:

“RewardMe is a universal rewards program for every store in the US.  We utilize a micro-frequency to detect if your customers use our app and immediately reward them for shopping at your store.  Shoppers will earn points that can be redeemed for rewards at your business.”

Needless to say, the storeowner looked back at me in complete confusion.  “What’s a micro-frequency” or “I don’t need a rewards program” were common responses to my pitch.

The current version of my pitch:

“RewardMe is the “frequent flyer miles” for your business.  We turn a new customer into a regular customer, and drive this regular customer to invite 15 of his friends to your restaurant.”

Now storeowners reply with, “How do you accomplish this” or “Can you really bring more referrals to my business,” allowing me to schedule a 15 minute conversation where I can close the deal.

I’ve realized that if you pitch the value well enough, the potential client will ask for the “how”.

The greatest opener I have ever used

My original opening line:

“Hi, I’m Jun Loayza from RewardMe and my product helps drive repeat and referral customers to your restaurant.  I’d like to schedule a time to show you the value that my product can bring to your businesses.”

This opener was actually very effective.  ~20% of the business owners that I spoke to using this method scheduled a 15-minute meeting with me.

I of course was not satisfied with a 20% return, so I decided to experiment with different openers.  After a few iterations, I came up with this:

The current opening line:

“Hi Mark, I’m Jun and I’m an entrepreneur.  I’m not here to sell you anything.  I’m actually here because I’d like to schedule a 15-minute chat to learn more about you and your business.  My goal is to find out if what my team is building matches your needs as a business owner.  Are you available later today or tomorrow to meet?”

And you know what?  80% of the time I’ve given this pitch, the business owner asks, “What are you building?”

This is perfect!!!

They have asked me what I’m doing, giving me permission to pitch them!  Without them knowing, I’ve turned an ask to do research into a pitch for a sale.

Use the above methods and you will find those first-movers for your product.

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  • http://www.jeffhaines.com Jeffrey A. Haines

    There is a lot of info out on the web about selling web services, but when you’re selling a B2C product to a company whose entire business is based on in-person transactions, it definitely makes sense to approach them the same way they serve their customers. Instead of coming off as an invasive annoyance like 90% of the other organizations that have contacted the business, you’ve approached the prospect in a respectful way, and on their terms–and then you pitch to them in a way that shows the immediate benefit of entering into a relationship with you.

    There is some really terrific reasoning, evidence, and wisdom here. Great post, Jun!

    • http://JunLoayza.com Jun Loayza

      Thanks Jeff!

      Checked out your projects on your site. Keep up the great work!

  • http://blog.tarynzhang.com sunny

    Wow, your business is hauling butt! That’s impressive. I am stunned at how much energy and drive you have. And this blog, by the way, is a wealth of information for any young entrepreneur. Thanks for providing this phenomenal resource on the web. I’ve bookmarked it and will be visiting frequently in the future.

    • http://JunLoayza.com Jun Loayza

      Hey Sunny,

      Thanks so much for your encouraging words. I’m going to make it a goal to blog more often.

      Good luck with your startup as well!

  • http://ideaeconomy.net John Bardos – IdeaEconomy

    Very impressive Jun,
    You are a great entrepreneur that is destined for huge success.

    I think a lot of your success comes from your personality and charisma. I am not sure if everyone can pull off what you can accomplish.

    • http://JunLoayza.com Jun Loayza

      John, good to hear from you!

      You still in Japan. I’ll be reaching out soon to connect via Skype.

      Thanks so much for your encouragement.

  • http://shr30.blogspot.com Shreenath Regunathan

    Jun,
    It’s interesting in the consumer goods worlds – a lot of what you are saying is basic must-do and some sales people forget the basics!
    Good article and great honest feedback

  • Isaac

    Jun,

    What times did you find were the best times to visit the restaurants? I’m trying your process and the owners are never there.

    Thanks for everything.

    • http://JunLoayza.com Jun Loayza

      Call beforehand to get the times of the business owner.

      Best times are 10am – 11:30am, 4pm – 5:30pm, 8:30pm – 10:00pm

  • http://orkiv.com Alex Senn

    Jun, your simple view of how to sell a product inspired me to go out and sell to merchants for the first time with my new software company Orkiv. It is designed to help merchants take control of their digital coupon campaigns, with added loyalty, customization, and all-in-one marketing capacity it is a great add on to any website. I appreciate your valuable findings on the way to your own success.

    My question came when I came across the big box stores. What should you do and can you do while “out on the street” to get in with the big box stores? Is it worth talking to managers about your product so they can tell their superiors (bottom up approach) or would it be better to use LinkedIn, cold calls, email etc. to try and reach the true decision makers at the top?

    Thanks again for the insights.

    • http://www.junloayza.com Jun Loayza

      The managers of large retailers or franchises have very little say when it comes to the use of new technology at a store.

      If you’re going after franchises, it is useful to get introduced to the franchisee – we’ve closed many deals through franchisees, but even then, it’s a long shot and a long sales cycle.

      Cold calls are horrendous. I’ve tried them and they don’t work.

      LinkedIn InMails have proven mildly useful. I definitely recommend you take a stab at them.

      Introductions are most important. Furthermore, we found most of our success from sponsoring tradeshows and conferences.

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