Drilling for Diamonds

Hot fashion retailer Zara has one plaudits for the way it taps into fashion trends and converts them into hot clothes that are affordable - amazingly fast.

A Zara design can go from concept to store within 30 days. Zara employs over 200 staff in its Spanish design and development team. The team churns out an amazing 1000 styles a month.

The mantra in Zara is react rather than predict. Zara’s designers don’t attempt to predict or share the market like most of their competitors. Zara reacts to what they in the night clubs, on the streets and on the catwalks and tests them in their shops. What sells is replaced quickly. The sale dogs are cut.

Its a magic formula. Customers love it. They get the latest fashions, fast and cheap.

Zara’s short lead times means it continues to deliver more fashionable clothes. Thats why customers return to the store - on average an amazing 17 times a year (most competitors average 3). The lower quantities mean the fashion items are often in short supply. Low surplus stock means Zara doesn’t have to regularly purge its stock with massive end of season sales - so margins remain high.

The huge range of styles gives the customer more choice and improves the odds of Zara getting it right. Because Zara customers know Zara is always updating its stock, Zara spends very little on advertising. Zara’s hot fashion creates massive word-of-mouth among it’s target customer base.

When Ortago Gaona, the founder of Inditex, the owners of Zara, is asked what Zara does, he replies “Zara provides freshly baked clothes.” For the staff this translates into: react rather than predict.

The Zara formula also suggests that before long we will find that a lot more fashion brands will have to own and run their own retail outlets. Zara’s “fast fashion” is built on getting daily feedback from its own stores and using it’s sales associates and store managers as “trendspotters.”

Popularity: 43% [?]

Most of us are appalling listeners. We may have 2 ears and 1 mouth - but we rarely use them in the proportions nature allocated us.

The famous editor, Maxwell Perkins (1884-1947) who is credited with popularizing Ernest Hemingway, believed no one really listens at most social events. To test his theory, he turned up late to a cocktail party where he grasped his hostess’s hand and said, “I’m sorry I’m late but it took me longer to strangle my aunt than I had expected.” “Oh, I completely understand,” replied the hostess, smiling sweetly, “I’m so happy you could come.”

Listening takes place on different levels. At level 1, the person simply hears us, but makes no attempt to emotionally engage. think of the bartender who doesn’t smile or affirm your order but turns to the fridge and gets the bottle of Stella Artois you ordered.

At level 2 the barman would make good eye contact and smile.

Level 3 listening involves engaging a person so they feel that they are the only person. They attentively listen to ever word you say and engage you emotionally.

All staff engaged in customer contact need to be able to listen at level 3. Can you?

Popularity: 16% [?]

In the 1900’s all train passengers traveling from East Germany to West Berlin had to pass through Checkpoint Charlie.

At the border, an East German officer would check all passports and travel documents. As the officer checked each passengers papers he asked the same 3 questions:

1. Who are you?
2. Why are you here?
3. Where are you going?

These 3 fundamental questions were all the officer needed to ask to test the validity of the family’s travel plans.

When you are selling to customers you need to be able to answer three questions that your customers will ask of you:

1. What makes you different?
2. What makes your company different to other vendors?
3. What makes your company’s product or solution different to your competitors?

Before you ever sell to a customer you need to be able to answer these 3 questions with clarity and conviction.

Popularity: 19% [?]