From Home Furnishing Business
By Bob George
This adage has been a constant admonishment to me during the course of my career. Those for whom I have had the pleasure to work know that we are constantly exploring ways to approach the home furnishings business. The foundation of that exploration is always based on the question, “Will it allow the retailer or manufacturer to sell not only more today but also, equally as important, more in the future?”
From my perspective, improving the selling function is out of vogue. It was a hot topic 15 years ago when the retail store was populated with an army of sales consultants, each with a “unique” program of five steps or 12 steps, or some other method of selling, a list that goes on and on. Yes, there are still consultants, including my firm, Impact Consulting. However, the eyes of retailers and sales associates begin to glaze over when the suggestion of sales training comes into the conversation. Why is that? Perhaps the fault lies in a case of over-promising and under-delivering. Could it be a situation akin to binge dieting? Positive results may have been swift. Unfortunately, however, they were short-lived.
This does not mean that training doesn’t work. We can look at other retail sectors and find them spending millions in this area. Why? The answer is simple. The incremental gains put millions of dollars to a company’s bottom line. Consider a typical salesperson taking 150 opportunities each month with an average ticket of $1,500 and a close rate of 25 percent. This person is a great asset. He or she will sell $675,000 each year earning $30,000 to $35,000 in commission while contributing $145,000 to $150,000 to your fixed cost and ultimately enhancing the retailer’s profit picture.
However, what would make this good sales person reach that mythical level of the million dollar sales person? Simply put, it would be a close rate of 33 percent and an average ticket of $1,750 or some combination of these two metrics. For those who want to simplify even further—the sales associate would need to sell three more customers per week with a lamp or area rug added to each ticket. On the one hand, this is simple to calculate; on the other hand, difficult to execute.
Let’s address the “how” of doing this. Every weekend we watch sports, sometimes in person, often on television. We observe the coach actively involved in the game maybe running up and down the sideline or shouting from courtside or the sideline. We see this coach yelling at his “charges”, making suggestions after every play.
Let’s take that approach into your store. Is your sales manager on the floor, observing, coaching, motivating the “players” or is that office door closed with his or her attention focused on paperwork? Ask yourself—which is more important?
Using a final sports analogy, we know that, in preparation for a game, the participants may spend hours studying the problems encountered in the last game and readying themselves for the next opponent. Relating this to your store, the sales associates should be assessing their sales techniques used earlier. Approaching this analytically, they can place the positive tactics in their “re-use” baskets and either rework or retire the unsuccessful methods.
Before you get the idea that the retail management is blame free, evaluate your investment in training methods. For less than $2,000 annually per sales associate, you can train a million dollar writer. You entrust that sales associate with 150 Ups per month—1,800 each year. Is it not worth slightly more than a dollar per Up to provide the training? After all, you have spent $23 to create the opportunity. The return is an additional $180 per customer per year for an investment of $1 per customer.
Initially, I said that “nothing happens until you sell something.” In essence, the “happening” is that you will increase your bottom line by 30 percent to 50 percent.