Hey guys, have you ever come home from work and found that your spouse or significant other purchased and positioned something new and different in your home? Maybe it was a small table-top accessory, or a new picture on a wall. Or, some really neat blue decorative bottles placed on the counter-top in your bathroom. Maybe it took you a week to notice this little thing, but once you did see them you had to admit they made the room look and feel different – and better.
This happened to me when I came home to find a new mirror hanging where another hung before. I’m not sure how long it took me to notice, but my first reaction was why? The old mirror had a perfectly fine reflection.
The old one reflected my image perfectly, but what it didn’t reflect, was my partner’s sense of style, of design, of beauty.
Why did I tell you this little story? It’s to illustrate that people can be a little slow in noticing what can and should be improved. Sometimes we look at our reflection in a mirror and are so focused on the gray hair, or small winkle, that we totally miss the fact that someone has replaced the mirror! And this phenomenon is especially true in the furniture business. Retail managers often focus so hard on closing sales today (which is like a gray hair or wrinkle) that they totally miss a greater truth. More about this later.
The other point of the story is that not only did it take time for me to notice that the mirror had been changed, It is likely that my wife had been unhappy with the old mirror for some time before she decided to buy a new one.
Think About All Those Buyers
Now, think about all those potential buyers out there, mostly women, who seldom shop for furniture. Face it, our stores are not on everyone’s weekly shopping list. Unless, of course, there arises a need in her mind. Again, no emergency exists as is the case when a refrigerator or stove stops working.
Over a decade ago, I stumbled upon a consumer research study that laid out the thought/action processes women go through to make a major furniture purchase decision (and to her, they’re all major). The steps are Dreaming, Exploring, Planning, Selection, and Enjoyment. Of course that final process of enjoyment is the reason why all the others matter. In this study, there was no indication of the timing of any of these processes, but you should know from carefully monitoring your shoppers’ behaviors, that each can be separated by long intervals. Of course you do monitor this, right?
Critical Sales Metrics
For over 40 years I’ve tracked the critical sales metrics in our business, the most important of which are Close Ratio and Average Sale. Close ratio in our business is not the same as the general retail “conversion rate” because of the nature of our selling process. It’s not off-the-shelf stuff. There’s a lot going on in our customers’ minds, and the consequences of making a bad decision are costly both financially, emotionally, and can be long-lasting. We measure close ratio by-the-visit because we have to personally interact with a shopper each time she comes in. And when she leaves, we cannot be sure we’ll ever see her again. Unless, of course, we do right things, right!
The point of all this is that we’re dealing with deep-rooted issues that include far more than the pricing, selection and the availability of merchandise. If the focus of your sales training and of your sales staff is primarily on pricing, selection and availability, you are missing a lot of sales. There are personal issues as well, such as style, design, and the desire to create a beautiful, comfortable, affordable home. Shoppers see oceans of goods, about which most of them know little. In many cases a lack of help at the point of contact with sales associates is a weak link, due to a lack of focus about what most customer are trying to achieve.
She’s not trying to achieve the purchase of a new item. Shoppers are trying to figure out how a purchase will affect the look and feel of their homes, their rooms, and make them better for themselves and their families.
On the other hand, you and your sales associates may be trying to close sales today. Based on long-term studies of retail furniture store traffic, this one aspect of our business stands out in stark relief: When a woman in the early stages of the decision-making process visits your store for the first time on this project, there is a 10% chance she’ll buy today. If you can get her to return a second time on that same project, there’s a 75% or higher chance she’ll buy. Your 20% close ratio is made up of some first-time shoppers and some “be-backs” (whom I define as returning again on the same project).
The Immediacy Paradox
Therefore, for 90% of your shoppers, the real goal of that first visit for you and for your salespeople, should be to get a second visit – not to close a sale today! This idea makes many retailers feel uncomfortable. There’s a focus in our industry on closing customers today so they don’t walk and buy somewhere else. It’s human nature. But to achieve better close rates, experience has shown that a change of mindset can be transformative for your business. To do this though, you have to do things right, and, more importantly, do the right things.
Higher Close Rates
The danger for you and your business is to see achieving a close today, on the first visit, as being the norm against which everyone is measured. To change that mindset takes training and coaching.
The process of achieving higher close rates starts with the knowledge that most customers simply cannot be closed on a first visit. For the many shoppers who have not yet progressed far through steps of Dreaming, Exploring, Planning and Selection, patience and follow up skills to get a second visit are key.
Your opportunity for growth is not among the 10% who buy today. You cannot grow that segment through closing skills. Your opportunity lies in the rest of your customers through better engagement skills, better connecting-to-the-projects skills, and better customer relationship management skills – meaning following up to make sure that the next visit happens – the one you’ll close 75% to 90% of the time.
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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