Staying Alive During Slow Times- Part 4
Furniture World Magazine
By Joe Capillo
Part 4: Why you need to develop a formal customer engagement strategy.
In the July/August issue of FURNITURE WORLD, some of the simple thinking that makes sales management so much fun was addressed. My hope was that more owners and managers would begin to look at their businesses in an objective way, using key metrics to understand the effect of performance variations among salespeople on their top, and bottom lines. I also suggested that the things that got us this far, are stopping us from getting better. The way we succeed with the 20% of shoppers who purchase from us, causes us to fail with the 80% who don’t.
Now, let’s not get hung up on the numbers as they relate to you specifically. Instead, let’s look at an example that will illustrate why your close ratio, by itself, doesn’t matter.
Example: In a recent meeting with sales managers in one of my stores it was discovered through camera counting door traffic, that the actual close ratio on all customer traffic was under 10%. Reported traffic, after all salesperson edits (the “she wanted something we don’t carry, so she doesn’t count” kind of nonsense)... the flat out over-the-top periods when there are twice as many customers as salespeople in the store....and the log entries that salespeople simply didn’t make for one reason or another... the store showed a 20% close ratio. The difference between the actual close rate and reported was disturbing to the owner, but speaking from the perspective of sales performance, this actual percentage isn’t important. The fact is that if this store can move from a 10% to 15% close ratio it will get the same 50% increase in sales as if we moved from 20% to 30%. Of course the average sale would need to remain unchanged, but think of what would happen if it went up too! A double whammy!
So, what are the things that work for 20% of your shoppers, but don’t work for the rest? That depends, in large measure, on what your selling strategy is, and how it’s implemented on the selling floor by your salespeople. And it usually works better for some salespeople than for others (remember that 40% top-to-bottom variance I talked about in the last issue).
Still, for most furniture retailers it’s simple – if your customer engagement strategy is all about product, things (the furniture you carry) or about the current promotion you’re running, and that’s all your people have to talk about, it works for a relatively small number of customers. Good looking products, reasonable quality, a good sale price and finance terms, great in-stock positions, coupled with a nice, competent salesperson will get it done for the 20% (more or less) who buy. The others need something else. Here’s the thing – the products might be right, the price might be right, everything might be right except for the one thing they need that the customers who bought don’t – more help.
If all you’ve taught your salespeople is to know your products inside and out, to tell customers about their features and their perceived benefits (perceived by vendors and you) then you will only do better by increasing your traffic. Remember, I said that for the big guys that’s a good plan. For the smaller independents, it’s a tough, and expensive and a chancy proposition. When this song is sung by the salesperson, but more help is needed by the customer to make a decision to buy, it’s likely that your people have no step-up game plan. They don’t know what “more help” means, or how to deliver it. They’ve done all they know how to do.
More help means helping your customers understand how to actually use the products you sell in their homes and rooms, how they’ll fit in with other things they own, their backgrounds, or how to plan, develop and execute a room project so the outcome is what the customer wants. Even to go so far as to help them better understand what they want for their room. If you can’t do that, most of these customers join the ranks of the approximately 40% of furniture shoppers who don’t buy, but simply go home to think some more about how to be sure they’re making an informed, correct decision about their room. The thing customers fear the most is making a mistake. All some of them need is more help from your salespeople to go forward.
What’s Going on Out There?
How do you know what’s happening on your selling floor between your customers and your salespeople all day, every day? I’ve talked about how important it is to control the point of contact, or, at the very least to strongly influence it. This is where your business lies – where a salesperson meets a customer.
In some industries the customer engagement strategy is closely scripted, rehearsed and monitored to ensure that the business owners do control the point of contact. Salespeople practice written scripts until they can recite them verbatim, and are not allowed even the slightest variation. This is done to ensure that every customer receives an equal and defined experience, and to eliminate individual variations on the company’s message. Are there some people who can intellectually translate a scripted message into their own words and make it work? Yes, of course, there are. They’re the ones who write the scripts for the rest.
By comparison, where do you stand on this? How sure are you that your message, the one you want delivered to every customer, every time, is actually being delivered in an acceptable, consistent, high level, enthusiastic and believable way?
The message here is that unless you’ve actually shared your intended message with your sales staff, they have no way of knowing what you want done. If you leave your message up to each individual salesperson, you’ll get almost as many different messages as you have salespeople, and your customers have vastly different experiences. The quality of your customer’s experience in your store will depend entirely on who’s up. Think again about that 40% performance variance from the best to the worst salesperson and you will see why developing a formal customer engagement strategy is so important.
Such a strategy will help your salespeople to become truly engaged in the sales process. They will learn to determine each individual customer’s need for help and will start to produce sales from those customers who should buy from you, could buy from you, but don’t.
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