Staying Alive During Slow Times - Part 2
Furniture World Magazine
By Joe Capillo
Part 2: Consumer research suggests ways that you can stay connectedto your customers throughout the stages of the room furnishing process.
There isn’t much research available to home furnishings retailers that addresses their customers’ motivations and behaviors, leaving us adrift and on our own when it comes to strategic planning for long-term success. In furniture store after furniture store, a kind of institutional myopia exists that surrounds the issue of defining the nature of businesses relative to customers. Worse yet, most attempts to do this are merchandise-centered, and not focused in any way on providing the customer with a unique, competitively superior store experience. A merchandise focus might be an effective strategy when the goods on display are very different from items that customers encounter in other stores. But, what are the chances of that happening? I mean, we’re talking about the furniture industry here. There hasn’t been a style innovation in our industry since someone invented the term “transitional.” That’s unless you consider the home entertainment category which was actually driven by the electronics industry.
Some retailers have attempted, with limited success, to substantially change their “customer experience” by altering the physical nature of their stores. New architectural elements, layout and signage helps customers to perceive, on first impression, that a store is somehow different. In truth, however, customer experiences in our business involve personal interactions. In just about every furniture store, customers cannot obtain detailed information or make a purchase without interacting with a salesperson. And, to quote the Bard, there’s the rub.
The quality of your customer’s experience is completely in the hands of your salespeople. Just as they control, through their skills and their actions, all of your revenue generating capability (see Part 1 in the March/April 2007 issue posted to the sales management archives on furninfo.com), they also control how your store is viewed by your community of potential customers.
This is not to say that this situation is always bad. In fact, all of your sales revenue has been generated by these same salespeople, so you may be thinking that things can’t be that terrible. Or can it? Your best people – those who continually perform at the highest level and earn the highest levels of customer loyalty, are just the kind of people you want creating, nurturing and managing the customer experience in your store. These people are the ones who come to work every day believing that they will develop a professional, lasting relationship with every customer they meet. They know that just because a customer doesn’t buy today, does not mean she’ll never buy in your store. These few top performers know that there is a decision-making process involved in making home furnishings purchases, and that staying connected to the customer throughout this process, no matter how long it takes, is their ticket to success as they define it.
Some Helpful Research
Thanks to forward-looking companies like Lexington Home Brands, there actually is some research available that looked at how people, women in particular, go about making a major home furnishings purchase. It seems there are five identifiable stages of thinking and action involved, and it’s important for retailers to know this kind of information when strategically planning how they will interact with customers. Why? Because this research looks at how our customers make decisions about where they’ll buy. Given the sameness of product offerings across most of the stores in our industry, that process is of paramount importance to all of us.
Stage One - Dreaming
In the earliest stages of thinking and action, whether remodeling a kitchen or bathroom, or redoing a living room, family room, or any other room in their home, women look for ideas – a place to begin. This is why there are several dozen magazines devoted to remodeling everything from closets and garages, to all the other rooms in the typical American home. Some women will actually show up in your store in this stage.
It is important for furniture retailers to have an attack mode strategy for dealing with consumers who enter their stores. Looking for ideas turns out to be a real, legitimate reason for a woman to visit your store. That’s why the wide-spread opening “qualifying” question (usually preceded by “Hi, howya doin?”) “Are you looking for anything in particular?” is a real turn-off. Trying to sell her at this point just isn’t going to work.
In fact, if your store isn’t full of “ideas”, but just products and salespeople who get in the way, you will be taken off her shopping list.
This explains why there are several dozen popular television shows featuring room make-overs that are widely watched by women. It’s the ideas thing. There’s a lot – a whole lot – of web shopping during this stage, too.
Stage Two – Exploring
Very much like stage one, this is the time when shoppers try to find those items they’ve seen in magazines, on the web, or on TV. Here, again, you should not attempt to “sell” her. She does not want to be pushed or manipulated at this point. Instead she is seeking to reconcile the picture being formed in her head, fuzzy and incomplete as it may be, with the merchandise and displays found in local stores. Smart retailers (and salespeople) should try to connect to the customer’s internal picture right here. This should not be an informal process. Practiced strategies, systems and methods should ideally be put in place to do this.
The interesting thing about these early stages is that it can take a long, long time to complete them. Prospective customers in these stages feel no dire sense of urgency. Customers asked during this relationship-building time, how long they’ve been shopping for a particular room, will say that they’ve been shopping for as long as several years. This piece of information is vitally important to professional salespeople because it verifies their contention that keeping long lists of shoppers, whether or not they’ve ever purchased anything from them, is the biggest source of new business they have.
This thinking also ties in to research done in the early years of this decade that found that 40% of surveyed consumers who shopped for furniture in the previous year reported that they did not buy. So, I wonder, does this mean that as many as 40% of your shoppers over the past, say, several months, have not purchased? I think it does, and I believe that this is where those truly great million-dollar salespeople thrive. They know this and they stay connected. The rest simply don’t, and neither do their retail owners and managers.
Stage Three – Planning
When you meet a consumer in this stage of the decision-making process you can connect to their project, which is the real crux of the matter for them. Or, you can remain item-focused and get the same kind of results you’ve always gotten. Average salespeople will close about 20% of these kinds of engagements, while the best salespeople (those with the best interpersonal skills and product knowledge, plus who help put a room together) will close around 30% of them. That’s a 50% variance. Unfortunately, those below average salespeople who have lower skills, knowledge and abilities will close around 15% or fewer.
Planning is where the real fun begins, and the strategy of the best salespeople is different from what is considered “normal”. They do not meet customers with the intent to sell. Rather, they greet them with the intent to understand first, and it’s this subtle difference that makes them great. The planning stage is where consumers need more help than most furniture stores are set up to provide. It’s that missing level of service that makes great salespeople and great stores... great.
But, again, planning is not the end of the process by any means, and if as many as 15% of these people buy during the planning stage, I’d be surprised. This is where the least understood and most promising aspect of strategic development for stores comes into play. Customers who return a second time after the planning stage buy about 60% of the time – that’s a 60% close ratio on be-backs. Combined with the comparatively low close rate for first-time shoppers (first time on this project, that is), the average for your store is derived.
Stage Four – Selection
The planning completed, it’s time to buy. However, if you meet customers earlier in the process during dreaming, exploring or planning and don’t connect to them or to their project, you are unlikely to be included in the selection process.
Stage Five – Enjoyment
How could it be possible to become truly connected to a customer’s room project (whether the customer buys a whole room or one piece) and not want to stay connected to that customer after the furniture is delivered? After all, when does real satisfaction happen? Is it after they’ve made the purchase and left your store with nothing but a piece of paper and less money in the bank, or when the furniture has been set up in their room? The enjoyment stage begins, of course, when they have it, and enjoyment of the result, is what she was seeking all the time. She wasn’t looking for this sofa or those tables as disconnected items. All of the features you pointed out and the benefits of those features have no meaning outside of the one benefit she really wanted all along – a beautiful room that makes her feel good. A room she can look at and say. “I love this room!”
So, how connected are your salespeople to every customer after every delivery? Are they in the “Pandora’s Box” mode of thinking, which I call the Ostrich syndrome, fully prepared to give up their, and your, connection to the customer because they don’t want to hear about any problems? Think about this. The enjoyment stage lasts a long time. Every time your customer sees the room and gets that good feeling, your store gets a boost in her mind. Retailers complain that there’s no “customer loyalty” any more, but loyalty today has to be earned by how you serve people, and how much they believe you really cared about what was important to them. Make the calls.
Thanks Lexington for bringing this all together and helping to make sense of some of the consumer motivations and actions we encounter every day in our stores.
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.
Read other articles by Joe Capillo