OK. For all the football fans out there who are operating retail furniture companies, think of the dominant teams in the NFL over the decades – like the San Francisco 49’ers, the Dallas Cowboys, the Steelers, where the right strategy (ie: the West Coast Offense) and outstanding execution by the players on the field made for years of success and multiple Super Bowl Championships.
Someone’s brain conceived the strategy. A playbook was developed and written. Great players were drafted and trained in the strategy, the coaches taught, drilled, taught again, and drilled again. Every player knew his role and the role of every other player. Then the players executed on the field. Of course opponents eventually developed defensive strategies to counter the West Coast Offense, but it is true that some teams still utilize it, or some variance of it, successfully.
But what happens if every player decides to execute the plays their way, instead of the way the team management wants it done? Instead of blocking this opposing player, they decide to block that player. Instead of kicking the ball, the kicker decides to run. Imagine the results if there were no structured plays, no coaching, and no adherence to the playbook. Chaos would result and team goals would never be met. Of course there is always the need to react to the situation on the field, and the great players can do that, but it all begins with a set strategy.
In furniture retailing our opponents are not our customers, but we do have to engage them, understand, convince and serve. We have to do it better than our competitors and seek to consistently exceed our customers’ expectations to achieve our goals. Yet many stores have as many different strategies as they have salespeople. Everyone has “their way” of doing things, and often the outcomes are widely divergent, providing a wide range of performance from the highest to the lowest performers.
Everyone gets the same number of customer opportunities, but with far different results.
Today, with the inception of whole new worlds of consumer-centered communication tools, and the continued growth of online information, shopping and purchasing of home furnishings, things have changed dramatically. But, have we?
I’ve been around retail furniture stores for 40 years and a lot of things still look pretty much the same, except for the “made in China” labels on just about everything. I remember when the goods we sold at Ethan Allen were made in Vermont or New York State. Most of the players in our industry continue to believe that it’s all about the “stuff,” but I have argued for decades that it’s really all about the people and the room first – then it’s about the stuff.
When things were cruising along nicely in the 1980s, 90s and early 2000s, just about every business strategy worked, and not much importance was placed on strategic thinking or execution. As long as new home sales (and of course used home sales) were booming, everyone was a retail genius. It really was all about the stuff needed to fill all those new homes and rooms. But now, things are different, and still retailers are applying the same old strategies to a reduced audience. Yes, there’s still a lot of business to be done, but the competitive environment is sharper than ever, and in case you haven’t noticed – everyone’s selling the same stuff. Just like always.
So, how can you get better in tough times? How can you do the three things that are the prime objective of every retail business: attract, satisfy, and retain an ever growing number of customers? First of all, do better with the shoppers you already have instead of always spending to get new ones. Here are some suggestions:
1. Have a selling strategy that is clearly stated in writing and ensure that each employee fully understands it. If you develop and adopt a new strategy or a new wrinkle to an old one, retrain everyone. Cover every aspect of the selling equation, and make your sales associates and coaches (otherwise known as sales managers) partner to ensure that your strategic approach is executed. If the only time your “players” hear about the company’s selling strategy is in initial training, you can’t expect them to take it seriously. Your selling strategy has to be a “walk-the-walk, and talk-the-talk” everyday issue for everyone from the sales managers to the CEO. Corporate initiatives fail most often because of a lack of attention from the top.
2. Connect your sales associates to your customers in every way you can. Don’t hold back email because of your fears of abuse or misuse. Figure it out and protect yourself technologically, but if you are not using email marketing directly from individual sales associates, you’re missing a huge opportunity for additional business.
People build relationships with people, not companies. Why should you continually spend additional marketing dollars to get non-buyers back when email is virtually free? And, it’s also personal, one-to-one marketing to prospects your sales associates have already met, know something about, and with whom they (hopefully) have a good relationship. If you view not closing every sale today as failure you’re on a track to continuous disappointment.
The fact is that with close rates still hovering around 20-25% for many furniture retailers, the real situation is even worse for first-time shoppers on a furniture purchasing project. In my experience, backed up by substantial monitoring of the flow of business over many years, first-time shoppers in your store purchase about 15% of the time, and this will be higher for your star performers and lower for your not-so-stars. On the second visit, however, closing rates are 70% or higher, and that’s how you get your 20% close rate overall. The question is – how many shoppers make a second visit? Again, experience shows that this varies among salespeople depending on the quality of their work, but the best I’ve seen have as many as 15-20% of their total monthly opportunities as return shoppers on a project.
3. Categorize your sales training. That’s right, train by category for product knowledge, presentation, and selling skills. First, that’s how people learn best – by category. Second, different emotions, feelings, and thought processes apply to purchases made for different rooms and uses. Unique presentation and sales approaches have to be used for living rooms and bedrooms. Dining room presentations require different questions and setting up alternate visions for customers. Dinettes often have a completely different emotional foundation with people than dining rooms. If you are not tracking salesperson performance by category, start now. All of the furniture-specific computer systems retain this information, and I can predict that you’ll be surprised when you look at individual salesperson performance by category over at least three months. You’ll find that some sales associates just don’t know how to sell some things. The great people tend to be great at everything. Keep the categories fairly broad. Consider master bedroom a category, youth bedroom another, and separate formal dining and dinettes. Sub-categorize leather upholstery by motion and stationary. Make it make sense.
4. Live in the metrics. They tell you what to do. Measure everything, and use the metrics to do something. If you’re keeping sales metrics you don’t use to manage today, in the game, on the field, throw them away. There are three parts to the sales success equation: Number of customer opportunities, your closing ratio, and your average sale. That’s it! Salespeople can take actions in all three areas to improve their sales and their income, and the start of everything is shoppers. When they bring a shopper back to become a customer, that’s their impact on your traffic. If you don’t know that you live on return shoppers on specific projects, take the time to measure this and find out just how important those second visits are to your business.
Joe Capillo is a 41 year career veteran, experienced in managing and consulting with furniture retail operations. He is also a contributing editor for Furniture World Magazine. He is a contributing editor to FURNITURE WORLD and a frequent speaker at industry functions. See all of Joe’s articles on the furninfo.com website.
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