(By Alec Drake) A Kmart assistant manager in a smaller market came up with the “Blue Light Special” idea. The promotion and its announcement in the store created excitement, kept shoppers there longer, and helped move inventory, clogging up shelf space. The Kmart corporate executives got wind of this promotion and quickly spread the concept across the country. Another retailer, Sam Walton, who was in the early stages of building his mega-brand Walmart, declared the idea genius.
Listening to a Freakonomics Radio podcast, I heard an interview with John List, an economist, on his book, “The Voltage Effect: How to Make Good Ideas Great and Great Ideas Scale.” John described his perspective on “scale” and touched on Kmart and the “Blue Light Special” as an example that failed.
What Happened to the Blue Light?
We know the phrase, “Bigger is not always better,” and in this case, going big was not better. Kmart corporate decided to manage this promotion and predetermine specials, make them the same inventory at all stores, and build a forecast going out months for sales activation. The eventual disconnect between the “local” success and the corporate oversight pushed the promotion’s success downward. The “Blue Light” at Kmart dimmed, even after a brief period in 1999, as a free internet service supported by banner ads.
The rest of the story… Kmart once had thousands of stores in the U.S. and abroad. However, Kmart as a retail brand deteriorated due to competition from Walmart and Target, several bouts with lousy management, bankruptcy, and eventually being folded into Sears Holdings. Today there are ten stores, with only four operating in the U.S.
What Lessons Can Radio Learn?
The Orange Light of Caution:
As companies scale their sales effort, it’s essential to consider the direction of decisions as they take what has changed in business processes and apply these insights to new structures and protocols. Yes, change is the road to growth, but to reach growth goals, you need a proper balance in local selling (relation-based) and transactional scale (leveraging technology) where it’s effective.
One small example comes from the pandemic. There is newfound comfort in virtual meetings and appointments. Sellers can scale their time to be more productive using these platforms. To balance your use of technology, send additional emails with actionable content to help your prospect or client’s business goals. After placing an order, send your customer a handwritten thank-you note or cookies to their employees to show appreciation and promote the partnership.
The Green Light of Action:
We have learned to take nothing for granted and that change can be fast and disruptive. As your sales strategies adjust, keep aggressively prospecting in local markets. There is no red light to keep you from understanding who your local prospects are and the customer’s needs and offering solutions. The diversity of a more extensive customer base and local revenue streams will lessen gaps for revenue drops with specific categories, attrition beyond your control, and unexpected events.
Take action to keep stretching your mind and learning something new. Listening to podcasts with local category business leaders while exercising or commuting to work can help you find a window for self-improvement and fresh insights. Push outside your comfort zone of industry knowledge to learn more about the business around you. Be a businessperson in sales instead of a salesperson in business.
- Great ideas can come from the bottom of an organization. Be careful to support them and not crush them with complicated oversight or controls that are too tight.
- No matter how big or successful, any brand or company must be moving toward serving its customers first and staying one step ahead of its competition.
- Change is the road to growth. There will be the unexpected ahead; strengthening prospecting for new business and diversity across categories and revenue streams is vital.
- Balance your sales strategies between leveraging the technology and support for important client relationships.
- Sales improvement and self-improvement go hand in hand.
Alec Drake is the President of Drake Media Group and a revenue management advisor. You can reach him at [email protected] or visit his “Sales Success Library” for more helpful articles at Drakemediagroup.com.