Monthly Issue
From Home Furnishing Business
May 19,
2015 by in Business Strategy, Industry 
By: Tom Zollar
In a recent article we talked about the fact that it is the owner and manager’s responsibility to find and develop the right players to make a team successful.
While having a great coach is critical to success in any performance related endeavor, the players—or the salespeople—really must make things happen in the game. Therefore, the process of recruiting key employees is highly important to an organization.
From a sales perspective, recruiting is an integral part of the larger process of staffing a store to provide the best experience for consumers. Recalling our discussion about missed opportunities in the February issue, if a store doesn’t have proper staffing levels, it will never be able to maximize the customers’ response to what it offers.
Staffing and recruiting go hand in hand to guarantee a store has the right people, as well as the right number of people.
Staffing is the process of planning for the needs of an organization in each department or business area. As Jim Collins calls it in his book Good to Great, this is defining the bus and all of the seats. It involves several important processes including: organizational development, organizational charts, chain of command design, and job plans and descriptions. Without going through this process first, the chances of successfully recruiting and hiring the right people within a business are not likely. A complete compensation program for each area also needs to be appealing to those targeted for hiring.
One of the most critical functions in retail is determining personnel needs or staffing levels for the sales floor and reviewing or reacting each month to changing situations and demands.
A common question I get is—how many sales people do I need? The response is usually—how much business do you want to do?
In truth, this is the most basic consideration. In this case, people are money. The simple rule-of-thumb approach is to divide targeted sales volume by a store’s historic average or its targeted, sales per staff member. As an example, a store has an eight-member sales staff that sold a combined $4.8 million last year. The average per person was $600,000. Based on a market analysis, the store has the traffic and share potential to do $6 million this year. Simple math says the store needs 10 full-time sales associates to hit the goal.
The store could try to get its current salespeople to increase average sales by 25 percent to $750,000 each. That, however, is unlikely to happen.
While the correlation between the number of salespeople a store has and the volume a store can do is undeniable, it is not the right way to look at staffing a sales floor. The real question is: how many people can handle and still deliver the required service level customers need to have in order to maximize the shopping experience?
This is the most critical number for retailers to know because it is the only way to properly match staffing levels to the traffic levels. Without it, retailers run the risk of being understaffed and allowing salespeople to drink from a firehouse. Of course a store could also end up over-staffed in which case it will become hard for good people to make a living. If that happens, the best ones always leave first.
For the record, most stores tend to be understaffed, since the sales people constantly resist any additions to a sales team.
We also must understand that this number varies greatly by store based on products and services offered. Here are some general guidelines based on experience:
Store Profile Ups per Month per Associate
· High velocity, low-to-medium priced, no sold orders 140 to 180
· Low-to-medium; some sold orders 120 to 140
· Medium-to-upper; heavy sold orders and some design 100 to 120
· Medium-to-upper; heavy design and some in-home 80 to 100
· Upper with mainly design and in-home 60 to 80
Of course it will also be different for each of salesperson based on selling style, design skills and personal pace. However, the historic average per associate is what should be used to establish staffing levels. Once that’s determined, it becomes a matter of establishing expected traffic levels and dividing it by this number. In other words: if the sweet spot for monthly salesperson ups is 80 to 100 and a store normally gets 1,000 ups per month, then the store will need a minimum of 10 full-time sales associates to properly serve customers.
After reaching a targeted staffing level, retailers should constantly track, review and rate employee performance to make decisions on future needs. If a staffing change is needed, recruiting the best available talent is imperative.
Recruiting is the process of finding the best candidates to fill vacant or soon-to-be vacant positions. It is the ongoing part of the process that Collins refers to as “putting the right people in the right seats on your bus”. Once roles are defined and people are in position, inevitably some of them will need to be replaced or additional staff will be needed to accommodate growth.
One of the most active areas of turnover in retail is on the sales floor. It is so active and so important that recruiting selling staff should be a constant, ongoing effort.
Keep in mind—recruiting is not an event, it is a journey. You need to train and coach managers to constantly search for talent in the community. Many of the best have special recruiting business cards they give to waitresses, shoe salespeople, clerks, receptionists—anyone they think would make a good candidate for your sales or management organization Drafting the best talent is a key ingredient to building a winning team.
Get Recruiting
Hiring the right people for the job can be overwhelming. Check out these tips to ensure you don’t make a hiring mistake.
· First, look within the company for current employees who want to and can step into a new role. It is amazing how much talent already exists in an organization. Don’t pigeonhole. Most want to grow and evolve, so if you they aren’t offered an opportunity to grow, the good ones eventually leave to find growth elsewhere. We have seen many top salespeople come out of the office, customer service and yes, from the warehouse and off the delivery truck. Always start recruiting efforts from within.
· Set up ongoing programs within the organization to recruit customers, friends and others through current employees. This is a great way to find talented and interested prospects. Most successful retailers have a reward or bounty program that pays a bonus to employees who recruit new people to the company. Teach employees the words to use and coach them on driving home the message. If a customer seems to enjoy the process, a salesperson could broach the subject of employment.
· Always have in-store and exterior recruiting signage to encourage walk-in candidates. This is the most cost-effective way to generate candidates. Place signs in visible places such as by the street, near the entrance and at the sales counter. Make sure the message is specific, exciting and positive. Something like: “Looking for people that want to have fun helping clients create beautiful homes. Join our team and grow with us.”
· Consult with other retailers, local businesses and vendor sales representatives about potential candidates. Good people who want to develop and evolve are highly visible to the people they interact with. Always share needs with reps and other business people. Ask them to let you know if they meet anyone that would make a good candidate for your team. Your local Chamber or any other business organization is a great resource, use it.
· Local job fair participation if applicable, along with connecting with local colleges or organizations that might provide access to prospective employees. Most people at these events or coming out of college do not look at retail as a career. However, present the case for your company as a potential long-term growth opportunity, you have a good chance of finding some interested candidates. Some great retailers, including City Furniture, have been successful in recruiting talented and motivated long-term employers from local colleges. Don’t disregard this potential source if it is available to you.
· Personal recruiting by management within the community at other businesses like restaurants and mall stores. This is possibly the most powerful opportunity you have, and it is probably the most overlooked too, because it takes a consistent, active effort to get it done. One of the best places to actively recruit new talent is at your local mall. The salespeople at mall stores understand retail, have terrible hours, earn less than you are probably going to pay them and have little growth potential. Store managers at places like Eddie Bauer and many shoe stores are well trained and underpaid. With the cutbacks, most support people have been let go, forcing the manager to do much more work with no extra pay—they are looking.
· Online recruiting sites and service providers like Monster.com, Indeed.com, etc. are good resources for finding sales and management. Some charge fees, but they will work with you to help maximize return. Learn how to search and review resumes to whittle down the ones to follow up. It’s easy to create a great resume today. Be careful or you will end up wasting a lot of time.
· Advertising in local markets for prospects is still an option although to do it right can be costly. One efficient way to share your message is to include a hiring statement in all your ads. If you run a dedicated recruiting ad, avoid the classified section. The people you want to attract are currently employed and not looking there. Pay a bit more for placement and the rewards will be greater.
· Use a headhunter if necessary. Typically the most expensive option, strong recruiters are effective. National recruiting services are mostly used for management searches, but some retailers have also found experienced designers using them. If you are located in or near a major metro area, then there are often local recruiting agencies focused on retailer needs.
Editor’s Note: Tom Zollar is retail operations practice manager for Impact Consulting where he creates and delivers sales training for retailer sales associates and managers, facilitates retail performance groups, coaches managers and helps retailers grow their business. In other words, he’s our resident coach.
April 16,
2015 by in Business Strategy, Industry
In the last issue we focused on the need for the sales manager in a home furnishings store to be its sales team coach to maximize performance.
In future articles we will discuss the duties, tasks and talents necessary to do that, like observation, feedback, training and communication. While most readers agree setting up such a system is the right thing to do, many said they had struggled to make it happen on a regular basis in their store. A myriad of daily interruptions and distractions consistently pop up making the task difficult.
In many cases, that happens because we miss one of the most important steps in the coaching process—planning. In sports you must have a solid game plan before competing. It’s the same in business. Everyone has heard of the Five Ps of Business—Proper Planning Prevents Poor Performance. (Many of us might be aware of a sixth P, which I chose not to include since this is a family magazine.)
Successful organizations always have a plan in place to manage the most important areas like finance, inventory, marketing and physical assets. Since sales volume fundamentally drives retail, it makes sense to have a solid plan in place to manage that area, too. While most can put the numbers together fairly well, many tend to struggle when it comes to creating a blueprint to make things happen on the sales floor. We may know the ingredients to success, but without a proper strategy in place, we can’t make them happen consistently to drive sales growth. We understand the why and what, we just stumble with the how part of the success equation.
Here is an outline of a simple, fun approach to executing a sales plan that will help incorporate the power of team coaching into sales management efforts in the future.
Step 1: Treat the year like the coach and the owner of a pro football team would treat a season. You’ll play 12 games in the season, and each game pits you against an opponent presenting different challenges and opportunities. Your first game is against January; the second against February and so on until November and December when the playoff games determine success or failure.
Create a game plan for each game or month that maximizes the impact of advertising, merchandising and sales efforts. The person in charge of executing the plan is your sales manager or coach.
Step Two: Organize the plan’s execution for each game or month. Remember, each game has four quarters—the weeks. During the pre-game or kick-off meeting at the start of the month, the coach reviews the plan with the players, or in this case, the salespeople.
Be sure to present and review advertising and promotional efforts; address any new or special product information; and discuss staffing needs for events. Be sure to announce goals for important measurements like volume, growth and revenue per up, and train the staff on how to use key elements of the promotion to close sales.
Pump up the team and keep them motivated with monthly contests to drive performance. During the first week, the coach watches the game and tracks each member’s performance, helping where needed, being on the sales floor and in the game.
At the end of the first quarter or week, the coach meets with players individually, updating them on the team’s—and their performance—during the first week. All team members receive individual feedback on how they and the team are doing.
Above-average team members get positive reinforcement during brief, informal meetings. Team members with sub-par performance get special attention including additional training and coaching through formal one-on-one meetings on how to improve. The coach then reviews the game plan and covers any changes or new elements with the team.
During the second week, the coach again watches the game, tracks each team member’s performance, specifically following up with under performers to ensure they follow suggestions for improvement.
At the halftime market, or at the end of the two-week period, the coach should meet with team members to discuss how the game is going and announce additional events or elements to the game plan for the second half. All team members should receive individual feedback on how they and the team are performing.
Players above the team average receive positive reinforcement and are encouraged to continue their efforts in one-on-one meetings with the coach.
During the third week, the coach observes the game and tracks team member’s performance and again, follows up with under performers.
With roughly a week or so to go in the game at the end of the third week, the coach continues to keep all players up to date on performance through the first three quarters and double downs on efforts to drive sales. This is where great sports coaches shine because they know what needs to be done to win the game and focus on helping individual players rise to the challenge of a strong finish.
Team members are given individual feedback on progress. Above-average members are positively encouraged to continue their pace, and those team members who are below the average are given special attention, training and coaching in formal one-on-one meetings to improve their stats.
The coach reviews the game plan, covers any changes or new elements and provides positive motivation for the team to win the game.
Once the game is over, the coach leads the celebration after a victory and the post-game analysis following a loss. It is now time to discuss what the team did well and where it needs to improve. Congratulate the stars in public, and coach those that failed individually. However, there’s no need to dwell on either for too long. It’s now time for the kickoff meeting for the next game.
Besides, champions never rest on past victories. They focus on future triumphs.
Remember, you can only play and coach one game at a time. If you and your team focus on winning each game and put enough effort into the process, chances are you will win most of your games, netting a winning season.
Every coach should have a few tools to help build the best sales team possible.
An individual feedback report is an easy way for both the coach and the sales team to track needed information. It includes sales performance numbers for the team and for individuals.
It presents the information month-to-date so the coach can keep the team aware of ongoing progress. The format makes it easy to hand out and discuss with team members on a weekly basis. This example comes from the proprietary SalesWorks Online software program, available through FurnitureCore.com and Impact Consulting Services.
An individual performance report, like the one below, is another tool for a retail sales coach. A performance report shows each individual’s month-to-date performance along with an analysis that shows how much those that underperform the store average are leaving on the table.
The report calculates what each person’s results would be if they were at the store average in closing rate and average sale instead of at their own level. The last column reflects the total sales that were missed had both performances numbers been at the store average. This information shows managers where the greatest potential for improvement lies so he or she can focus their efforts on that area with individuals. It is also very easy to calculate the lost income by person, which can be used to help motivate them to improve. This sample report also comes from the SalesWorks Online program.
Editor’s Note: Tom Zollar is retail operations practice manager for Impact Consulting where he creates and delivers sales training for retailer sales associates and managers, facilitates retail performance groups, coaches managers and helps retailers grow their business. In other words, he’s our resident coach … without the whistle.
April 16,
2015 by in Business Strategy, Industry
Boy, is it ever time for spring.
I need to buy a new Market tie—or maybe more than one. It has been a long winter.
I spend a portion of my time in the publishing side of the business and also in the sometimes brainiac environment of business intelligence via FurnitureCore. My primary focus, however, is management consulting and, more specifically, the strategies to create high performance companies.
The process is fairly straightforward. It involves taking the more traditional approach to strategy by assessing a company’s strengths, weakness, opportunities and threats—A good, old-fashioned SWOT analysis. Since we work only in the home furnishings industry, we are able to drill down to a significant level of specificity.
One area of investigation is external factors. These are defined as factors outside the control of the company that may significantly impact the performance of the company. The first quarter has seen an abundance of such.
First, we had the slowly emerging dock strike. Then, Mother Nature commanded a repeat performance of last year with her blow of extreme winter weather in the Northeast. These events are following in the not too distant past one of the most extreme financial disruptions that the United States has ever experienced.
All of these factors are, for the most part, outside the scope of what a company can control. These repeated body blows are when the president and the senior management team of a company earn their pay and more. It is also at this time that the leadership is defined. This is when all eyes go to the end of the conference table with implied looks that say, “What should we do?”
First of all management must believe that it will be over. The dock strike will be settled. Spring will occur even in Providence, R.I. And, yes, the recession will end. There are three steps that you may want to consider as you go forward.
· Initially, one must understand the financial impact of what has happened. This translates to cash flow.
· Next, manage the expectations of your customers by keeping them informed.
· The third action is to make long-term decisions. These should be carefully thought-out decisions. Resist the urge to make a decision that may impact the company—good or bad—and must be answered for later.
And oh, yes—go buy that new tie.
April 16,
2015 by in Business Strategy, Industry
Stanley Furniture is jumping back into the youth and nursery furniture category at this month’s High Point Market with the introduction of Stone & Leigh. The company shuttered its iconic domestically produced Young America brand last April because the model was no longer profitable. Now, Stone & Leigh will follow the Stanley’s current business model as a design, sourcing and marketing house. Glenn Prillaman, president and CEO of Stanley Furniture, took time to discuss the company’s new strategy for youth.
Home Furnishings Business: What is the name of the new youth division, and how did you come up with moniker?
Glenn Prillaman: Stanley is a design, sourcing and marketing company with plans for growth through a diversified product line. The flexibility of our operations model allows Stanley to bring exciting new products to market each year. Our new nursery and youth product line, Stone & Leigh, is our newest introduction. The new brand’s name speaks literally to its connection to the Stanley brand’s authentic identity. The brand narrative offers a storybook tale of a young boy and girl who live in an imaginative house in a small pastoral town and experience the wonder of nature and exploration. The children’s names each share a piece of our company's American heritage and authenticity as a proud manufacturer of quality furniture
Our founder, Thomas B. Stanley, was a farmer turned industrialist who later became the Governor of the Commonwealth of Virginia. In 1957, as part of Her Royal Visit to America to celebrate the 350th anniversary of the landing at Jamestown, he hosted England’s Queen Elizabeth at his home in a storybook occasion all unto itself. Stoneleigh is the name of the Stanley family home located in the town named for the family. Stanleytown, Va., is also where Stanley Furniture was founded in 1924. The Stone & Leigh brand is both authentic to the heritage of our company, and a whimsically imaginative journey we look forward to taking with boys and girls around the world.
HFB: Share with us the strategy in shuttering Young America a year ago and then relaunching the youth category this year.
Prillaman: For several years after the housing crash of the late 2000s, Stanley did everything possible to profitably operate a domestic manufacturing platform supporting an upscale case goods product line that was distributed through smaller independent brick-and-mortar retailers. Ultimately, production of the Young America brand had to be discontinued as profitability could not be reached within a reasonable amount of time. The Young America product line had been designed to capitalize on the competitive advantages of domestic manufacturing. A multiplicity of finishes, unparalleled product safety assurances and the cache of a product Made in the U.S.A. insulated the brand’s marketing narrative from copycat import brands. The product could not simply be transferred as is to a source in a foreign country without retail interruption. So rather than an abrupt halt to service, we executed a carefully orchestrated shutdown of the product line and the supporting domestic factory.
This helped Stanley’s retail customers with an orderly closure to the relationship the brand had created between them and so many consumers after decades of operation and more than $1 billion of sales in the nursery and youth business. This effort required a tremendous focus from our management team.
When all was said and done with Young America we continued to have customers tell us no competitor had filled the void we left in the marketplace, we felt confident in our ability to source a new product line designed around the competitive advantages of our company’s overseas operational model and marketing expertise.
HFB: How will this youth product differ from Young America?
Prillaman: I answer to some extent above when I say that Young America was designed around the competitive advantages of domestic manufacturing, while Stone & Leigh is designed around Stanley’s business model as a flexible design, sourcing and marketing company. From product design, to branding and marketing, to logistics, the business model moving forward is quite different. What will not change is our company’s commitment to design leadership, superior product safety and quality and dependable service. We expect our customers to always expect these efforts to be well executed at Stanley.
HFB: How broad is the premier introduction and what do the price points look like?
Prillaman: The Stone & Leigh brand introduces both nursery and youth product. There are five original designs for each of the two product categories and multiple finishes featured with each design. The feedback we have received from the retail partners who have already committed to the product tell us that we have developed a product of exceptional value.
HFB: What sort of projections do you have for Stanley in this category?
Prillaman: It would be irresponsible of me to attempt to project sales for any new product introduction. What I can share is that Young America was generating $40 million in annual revenues when we discontinued the product line. Stone & Leigh has been specifically developed and designed for today’s nursery and youth market. The values are evident when you see the product and you come in contact with the new brand. We believe the birth of our newest brand represents a significant opportunity for growth not just for Stanley, but also for our retail partners who intend to attract a younger, affluent, female consumer into their stores.
March 12,
2015 by in Business Strategy, Industry
By: Bob George
When I began to think about this issue, I put on my nostalgia glasses and reflected on the past, the past of gallery programs, clean distribution, and manufacturers defined by a single product category or even a specific style.
It all seemed so straightforward heralding a simpler time. However, after talking with those who lived it, my memory realigned with reality, and I concluded it was not as perfect as I had remembered it to be.
Today, manufacturers are pursuing e-tailers they once sworn not to sell. Retailers are embarking on trips to the Far East and are encountering the manufacturers they will see in the near future at Market. And, don’t leave out consumers. After spending an afternoon in a local retailer’s showroom being educated on the features and benefits by an informed sales person, they are joyfully surfing the Internet to find a better price for goods. The question becomes—Is anyone loyal anymore?
Everyone makes excuses.
Manufacturers
· E-tailers allow us to make a better margin.
· Retailers take my product shots offshore and buy direct.
· And so on. . . . .
Retailers
· Why not go direct? The manufacturer doesn’t provide services anymore. Manufacturers’ representatives no longer train our sales associates.
· Where is product photography when they have collateral? They don’t supply the images I need.
· And so on. . . . .
Consumers
· Why not buy on the Internet? It is convenient. Why pay for that store? They make too much profit.
· They don’t sell the total look.
· And so on. . . . .
Could it be that partnership is the answer? Sometimes the more you have to define it, the less likely it will succeed. The question becomes how do you define workable partnership for the furniture industry? Let’s look at this from three points of view.
Manufacturers believe they can conceive a product that consumers would really want. They also feel they can produce that product on a timely basis at a level of quality that the consumer anticipates.
On the other hand, retailers believe consumers in their communities recognize the value that they as retailers can deliver at a level of service they expect. They also understand this purchase needs to be in an environment that makes the transaction a pleasant experience.
Consumers believe retailers should make a profit and also stand behind the products they sell. In addition, they expect the retailer to be a contributing member of the community and a supporter of the well being of society.
I know you’re asking to what utopia am I referring? The answer may be a version of utopia, because in reality the question becomes, how do we get each party to ‘own it’, to look at things from the other party’s perspective?
Or is it all over?
Many of traditional retailers and manufacturers competing are from distribution channels that do not have two distinct partners. In other words, the retailer is the manufacturer or the manufacturer is the retailer. As traditional retailers source more and more product offshore, will the channel just collapse? Who wins? Will our industry, perceived as low profit, emerge with this new structure?
What will we lose? I believe a great deal.