Zombie Business

Are zombies lurking around your business?

Last week, while attending a webinar hosted by Lee Wetherington from ProfitStar (@leewetherington and @ProfitStars) the term, Zombie Branches came into play.  The phrase Zombie Branches has been used for a while in the banking industry and is used to describe a bank branch that consistently losses money and drains profits from the entire bank.  Here are a couple of signs a branch has joined the undead:

  • A branch is paying out high interest rates for deposit accounts like CDs or interest bearing checking accounts, but does not have any loan customers.
  • A branch may be busy with customers all day, but the customers are cashing checks or performing a non-income transaction.

Thought this is quiet an illness, banking is not the only industry that suffers from this epidemic.

  • It’s the same plague that ended Blockbuster
  • Circuit City also collapsed under this dead pressure

Essentially all retail businesses can be exposed to this toxic disease.

The good news is, unlike the monsters on The Walking Dead these zombie branches (or zombie locations) can be cured.  Here are four examples with a financial institution point of view.

  1. Increase Foot Traffic: Start a special sale at the zombie location.  Sponsor a lunch and learn focused on a common need.  Host a fun seasonal event.  Better yet, do all three!  Just be sure you and your team are equipped with the right tools to make this a success.
  2. Cross Sell: Maybe foot traffic isn’t the problem.  As previously stated, some zombie locations currently have people coming in the door, but they are not driving income.  If the same person continuously enters the branch, find out who they really are.  Maybe they’re a small business owner in need of a new merchant services program.  Maybe they’re a person who needs a safe deposit box.  Either way, both are great services that can produce decent fee revenue and really help out a person.
  3. Increase Sales: If options one and two fall flat, maybe it’s time to work on selling.  Short term solutions like hiring a seasoned sales person mixed with a long term sales training & coaching program can shift the office in the right direction.  Throw in an incentive program for extra motivation and your team will be cooking in no time.
  4. Innovate via Technology: Take a very close look at what you are currently offering your customers.  Are you missing out on any services that can help them (and you) succeed?  Prepaid cards, mobile apps and remote deposit technology are three ways the banking industry is taking a problem and turning it into an opportunity.

Even thought these examples where examined in the eyes of a banker, the main points can be applied across several different retail and B2B companies.

So, before you decide to figuratively use a blunt object to kill the zombie (aka closing a location), remember there are other options available.

Rebranding vs Repositioning

When companies decide to perform a makeover there are a couple of ways it can happen.  Simple makeovers like rolling out a new service, can be subtle, while other makeovers can bring dramatic change.

Take the two following companies: JCPenny (aka JCP) and Taco Bell.  One company appears to be going through a rebranding metamorphosis while the other is hoping to upgrade their image into a higher class restaurant.

JCPenny (aka JCP): Last week I was having a conversation with someone and was quickly corrected when I said, “JC Penny.”  The person stated, “No, it’s now jcp.”  Later in the week, I saw one of their new commercials in which the company refers to itself as jcp.

The company has done more than just update their logo and shorten their name, in fact two of their most recent removals have caused some buzz:

  • Goodbye Coupons: No more coupon cutting to get deals at jcp.  The company decided to stop coupons and embrace a simple pricing scheme for sales.  This also included the removal of .99 cent pricing and “Every day” low prices.
  • So Long Cashiers…sort of: The idea of a cashier behind a cash register is being removed from the new jcp.  The staff at jcp will start carrying mobile devices that have credit card readers.  This will allow customers to check out anywhere instead of waiting in designated lines.

Both of these ideas stem from jcp’s new CEO, Ron Johnson.  Mr. Johnson found success with this with his former employer Apple, and even though Apple has seen success with this in their retail stores, these two changes at jcp have been criticized by competitors and long-time jcp customers.

On a positive note, not all changes have been cloaked with negative feedback.  In fact, one change has caught the attention of competitor Macy’s.  In September, Business Insider reported that Macy’s liked the idea of jcp “transforming itself into a into a collection of 100 shops within its large department stores.”

Let’s hope the short-term pains will result in long-term success for the clothing chain.

Taco Bell: For the past few months Taco Bell has been taking a stronger approach to shifting the image of their food.  “Fast Food” in general has a negative impression that it is not a high quality meal nor do people perceive the food as healthy.

Taco Bell has taken a two-punch combo to address these two impressions.

  • The Fresco Menu: People may not realize it, but Taco Bell has had a healthy choose menu they call Fresco.  The Drive Thru Diet® has been available for a number of years, but now Taco Bell has increased it’s in-store and drive-thru advertising of this menu line.
  • The Cantina Bell™ Menu: Taco Bell has kicked it up a notch by hiring celebrity chef Lorena Garcia to create and promote their new gourmet line, the Cantina Bell™.  Currently there are only three items on the Cantina Bell™ menu, but Taco Bell plans on expanding it due to it’s success and popularity.

Taco Bell hopes this will help position them to compete with Chipolte, and so far, it appears to be working.  In fact, investor David Einhorn has added Chipolte to a short sale list due to Taco Bell’s aggressive movement into the high quality/gourmet approach.

Hopefully these two companies will see long term success with their different approaches to shake up their organizations and their respective industries.  Who knows, maybe Taco Bell will become one of the shops in jcp…as long as your bean burrito doesn’t ruin any unsold Levi jeans.

Motivation vs. Manipulation

When it comes to coaching and mentoring, there are times when people unfortunately make the mistake of confusing motivation with manipulation.

Most of the time the difference between the two are simple, but there are a few situations where there may be a grey area.  Wether you are the one coaching or the one being coached, consider the following points:

  • Selfishness vs Selflessness.  This is the best metric to use when determining if the advice you are either giving or receiving is a tool of motivation or manipulation.  Just ask yourself if what you are doing will only help you or if it will help and benefit others around you.
  • Short-term and Long-term.  When coaching, the advice and leadership given should be pointing someone in the direction that will help them in the short-term and long-term.
  • Ethical and Moral Alignment.  Coaching and mentoring in the workplace is a great win-win situation.  When a company can pair a seasoned, experienced worker with an up-and-comer, it can produce great, long-term results.  It’s important to remember that any coaching or mentoring should not only be good for the company, but good for the person.  If a coach/mentor is leading someone to grow up the company ladder by using back-door deals and agreeing to do questionable projects, then not only the future of the company is in jeopardy, but so is the future of the one being mentored.

If you follow these three points, it will be clear to see if the advice you are giving (or receiving) falls under the angel or devil side of your shoulder.

If you are the one receiving coaching from a mentor and you see a pattern of manipulative leadership, run away…FAST.  Most likely the person is not confusing manipulation and positive motivation; they are purposely using manipulation for selfish, personal gain.

In other words, don’t become Evil Homer!

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