There are two broad “types” of shoppers; transactional and relational. Most are not all one way or the other, but you’ll see a mix of these two shopping motivations in your customers that can help you to work with them appropriately.
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Transactional shoppers are more interested in price than relational shoppers. They shop around and rarely make their purchase on the fist visit.
Sales Management Magic by Joe Capillo
Where to begin? The November/December issue of FURNITURE WORLD Magazine included thirteen points to attend to in this awful economy and I hope they were helpful. Now let’s take a closer look at steps you can and should take today, tomorrow and every day from now on.
I have personally been affected by this perfect storm of events that overtook us in the past 18 months, having been involved in a family business that spiraled out of control through the failure of a group of branded stores, an attempted merger with an even sicker company, and the crashing housing market. I speak to you from close to where you are. I hate to say it this way, but I feel your pain.
Here’s my advice for owners and managers at all levels, particularly small family businesses: Take control of the point of contact.
In our business, nothing fails like success. All the sales you’ve ever made, and all the sales your individual salespeople have ever made, have been closed in an environment that no longer exists. In the past, you’ve probably approached customers in ways that no longer will work, so you’d better have a Plan B.
Things may never go back to the way they were in, say 2005, 2000, or 1998. Maybe those companies that survive this will end up being one of the few places left in the neighborhood to buy furniture and thrive in an under-stored marketplace.
Perhaps other channels of distribution will become stronger than ever and the whole idea of furniture stores will become passé. But, meanwhile there are mortgages to be paid, health insurance premiums to maintain, and college educations to be funded.
Companies who hope to thrive need to take control of the point of contact between customers and salespeople. Be right there with them all the time. This is not the time to trust that things are being done well. You know that there is a consistent, wide range of performance among your salespeople, and you cannot afford to let anyone get away who could buy, and should buy from you.
Business owners and managers, particularly at the highest levels in large, multi-store companies, are just not close enough to the point of contact. In these large companies it’s understandable. But in smaller companies, it’s inexcusable. Someone from ownership or management needs to be out there every hour of every day to make this happen. You’ll close some sales that otherwise wouldn’t be closed, and you’ll learn a lot about what your customers are thinking to help you promote and advertise the right things.
TRANSACTIONAL VS. RELATIONAL SHOPPERS
Here’s some interesting information that supports this assertion. There are two broad “types” of shoppers; transactional and relational. Most people are not all one way or the other but you’ll see a mix of these two shopping motivations in your customers that can help you to work with them appropriately.
Transactional shoppers are most interested in price or “the deal” you’re offering. They shop around a lot, and rarely, if ever, make a purchase on their first visit to your store. This partially explains why close ratios for home furnishings are low compared with some other kinds of retailing. These shoppers will tell everyone they know if they believe they got a good deal at your store, so when you sell them, they can be a good source of new business.
There’s little or no loyalty with these folks, though. They’re just as likely to buy somewhere else the next time. They’re not interested in a “relationship” with your store or your salespeople, just in getting the best price. They also don’t value design help.
When you get these people back a second time on the same shopping project, they buy a very high percentage of the time because you’ve already convinced them that you’ve got great prices.
Relational shoppers on the other hand, are typically less concerned about price, or “the deal,” and seek a relationship with your store and, if they earn it, with a salesperson. These people need a lot of help with the design aspects of their purchasing decisions, and need someone they trust to tell them to go ahead and buy. These people are more likely to buy on their first visit as long as they feel they are valued and their needs for support are met. They’ll be loyal to the relationship as long as you work to maintain it. Just remember that these are different times from “normal.”
Most of us display a mix of the two modes depending on the nature of the products we’re shopping for. For example, where product distinctions are clear as in cars, or TV’s, and there is a lot of information available regarding quality, features, and pricing – as would be the case in both product categories when a rating source such as Consumer Reports exists, we tend to be more transactional. Where more consultative selling is required, as it is in furniture, little comparative information is available, and outcomes affect quality of life issues, we become more relational.
So how does this affect us now? Everyone becomes more transactional in times like this.
Still, experience shows that when customers return to your store a second time, your close ratio will be over 70% and as high as 90% for your better salespeople.
The problem is getting them back, particularly those transactional types. This is why you need a system for dealing with both types of customers the first time you meet them, and ways to determine if they lean toward transactional or relational buying. You also need a strong follow up system that is transparent to management and managed closely. Of course, before you can follow up, you have to have the customer’s contact information and permission to follow up. For this to happen, you have to serve everyone at the highest possible level, accounting for the uncertainty customers have about your products (no information or ratings available) and the affect the decision to purchase has on people’s lives.
Be-Backs are everything in our business, and in these conditions more so than ever. Everyone is a transactional shopper these days, but you can still uncover the hidden core of need if you pay close attention, and get them back one more time. This is the kind of game that needs to be coached play-by-play, on the field by the top managers working with their players in the game. This sport, unlike real sports, is one where the coaches and owners can actually play in the game.
Joe Capillo is a furniture industry veteran with 35 years combined experience as a retail consultant and retail industry executive. 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.
View all articles by Joe Capillo