The most successful stores will have sales models that focus on creating a total shopping experience for their customers.
Standing in XYZ Furniture store I recently witnessed a salesperson greeting a man and woman as they entered the store. The salesperson opened with “Can I help you?” which brought about the expected response, “We’re just looking.” The salesperson countered with, “If you see anything you like, we have a great financing program, and I would be glad to help you with it.” As the salesperson left, the man commented to his wife, “Do we look so poor we can’t afford to shop here?”
This salesperson was playing the “Old Selling Game.” He wasn’t attempting to make a sale; he was trying to take an order. This was evident when the salesperson started closing the sale without first getting to know anything about his prospects. This is a problem in many stores and is responsible for many of the difficult situations faced by storeowners today.
The old selling game is played using price promotion and attractive financing packages. Building a business on low prices no longer works because there is always someone offering lower prices and better financing. By most standards of traditional measurement, the XYZ Furniture store mentioned previously is a good store, a dominant player in their market. They have a positive bottom line in spite of their sales team. Just imagine how profitable this store could be if the sales team was selling instead of taking orders.
The biggest challenge facing furniture stores is that consumers have changed the way that they buy furniture; the way most stores sell it has not. Today’s consumers ARE different. The growing number of dual-income families, means both husband and wife are working 8am-5pm and beyond. They are stressed, overworked and out of time. Recent events around the world such as 9/11 and economic swings in the economy have shifted their focus back to the home environment.
Those factors combined with increased competition from alternative furniture distribution channels such as the Internet, TV shopping channels, and warehouse-buying clubs is changing the way people buy furniture.
The latest consumer research in buying behaviors tells us that lack of time means consumers are not visiting as many stores as they did in the past before making a buying decision. So, in an environment where stores have less time than ever before to capture the consumer’s business, what is the best way to effectively compete? It is by creating the best furniture shopping experience possible.
How did Starbucks, come out of nowhere and become the number one destination for coffee in every market they entered? They didn’t try to sell the cheapest coffee in the market. Instead they turned buying coffee into an experience.
Create a Shopping Experience
The new selling game revolves around serving as opposed to selling customers. Stores playing the new selling game take the time and effort to do research in their market. The fastest growing stores learn to create a shopping experience that reflects the incomes and lifestyles of their target customers. They learn what these consumers want and need and take steps to powerfully differentiate the experience they offer from the experience offered by the competition. Competitive operations may be down the block, across the country, on TV or in cyberspace. An indispensable factor in delivering this kind of experience is the way retailers prepare their salespeople. In the process of serving customers, salespeople can create a unique shopping experience that gives them a strong and lasting competitive edge.
Hire Right and Train Often
The first step in creating an experience for shoppers is to staff the floor with the right salespeople. It is rare in any industry for a “natural born salesperson” to walk in the door and begin a successful career in selling. In furniture, that fact is reflected in part by the bottom line. They have recognized this fact about “natural born salespeople” in other industries, and have taken steps to create them by hiring right and training them often.
Stores with stable sales floors have learned to train both the sales team and sales managers to create and deliver a customer focused buying experience as opposed to pushing price and financing.
Retail executives need to be able to identify the attitude and skill-sets needed to staff the floor with a team of people who can create the right customer experience. Of these two attributes, proper attitude is the more important, because it is easier to find people who have the right attitude and train the skill, than to find people with the right skills and train the attitude.
Consider the sales recruiting and training program at GE, which for years had a 20-30% sales growth rate. They actively recruit salespeople. They look for people who have the right attitude and train them in selling skills, because they know that they can’t train attitude. At GE, they don’t wait for the “right people” to walk in the door, they actively hunt for them in advance of need. Sales managers at GE spend part of each day scouting potential talent.
In many furniture stores, sales managers wait until they have an opening, then run a series of help wanted ads. The result is that they are forced to select the best of the available candidates instead of the best possible candidate.
Outside of retail furniture, fast growing industries train and retrain their salespeople at least once a year. This training and retraining is the key to delivering a consistently superior shopping experience to your customers.
Most furniture storeowners say that they train their salespeople following the “XXX” or “YYY” system. When asked about the last time they had a training session, however, they may mention that it was as long ago as three years. Stores that fall into this category, will find that many staff members who received training will have left, so a number of salespeople will have an incomplete understanding of the way they are supposed to approach the sales processes.
Create A Reason To Return Often
One of the major problems seen in furniture stores is that they haven’t created a selling environment capable of getting their customers excited about their furniture shopping visits. Many people spend a lot of time in a store the first time they visit. If they come back a second time, they see that everything is still the same and they leave in a few minutes. After that, the only way to get them back is to have a compelling event such as a sale to bring them in.
It is essential for storeowners to use every tool at their disposal to create excitement. One product category that should be used more often to create excitement is accessories. Statistically your customers will replace furniture items several times over their lifetimes. The same people will continually shop to buy accessories to upgrade the look and feel of their homes.
Go to any bookstore in town and look at the traffic. Many people who browse in bookstores return week after week because they know that they will see something new each time. That expectation is part of an enjoyable experience. Even if they don’t find anything they want to buy, these customers have an incentive to keep coming back. When your store is accessorized properly, you can create similar expectations and generate repeat traffic that will help you to maximize the return on your advertising dollar.
Accessories have a faster selling cycle than furniture, so buying and displaying them creatively will help you to increase inventory turns. Skillful buying and placement also allows you to more frequently alter the look of your showroom at minimal expense. The appearance of change encourages customers to browse and explore. Rotating accessory items creates an environment that asks your clients to return often to look for ideas that will help them keep the look of their homes fresh.
“A journey of ten-thousand miles begins with the first step.” Creating a successful customer experience can often be started with a simple accessory sale. When customers are in the process of buying furniture, they may visit your store, but not be ready to make an immediate major purchase. Salespeople, who try to force a sale before their customer is ready, risk losing the chance of ever making the sale.
Creating a positive experience for customers often requires that salespeople pace themselves. Helping customers to make a simple decision on an accessory item, as a first step, can help them begin to create a desired look and feel in the room they are furnishing. Once they make a purchase, no matter how small, they bond with your store, dramatically increasing the odds that they will return and buy the rest of their major purchase from you.
Be More Proactive Than The Competition
The traditional method of generating business is passive. It consists of running ads and hoping people come in. Increases in advertising spending and a concurrent explosion in the number of ways consumers receive advertising messages have made this method less effective. In a recent seminar we asked a group of retailers to look at copies of their newspaper ads. The store names and logos had been cut off and many of the owners had trouble identifying which ads belonged to which stores because they all were so similar. Just imagine how confused their customers were!
Aside from the fact that retailers need to do a better job of telling their unique story in ads, this exercise points to the need for retailers to be more proactive in developing their markets beyond advertising alone.
Car dealers face many of these same challenges. One Acura Dealer, facing declining traffic due to a flood of new competitors, experimented with using a phone center. His team began calling medical interns and the new attorneys in law firms offering a “No Obligation” 24-hour test drive on a Friday or Saturday night. In the first year of the experiment, sales were up by 12 units a month over the previous year with almost no increase in expenses.
One furniture store followed a similar approach. They simply became proactive about having salespeople follow-up with past customers. On the first day of the program two salespeople made a total of ten calls and booked two appointments to make house calls. These two calls turned into sales totaling $26,000.
Instead of having salespeople sitting around waiting for people to walk in the door, look at ways you can use your sales team as a traffic generator.
New Revenue Streams
Look for value-add products or services that you can offer to your existing customer base.
In the late 1970’s, a chain of service stations faced stalled growth and declining profit margins due to increasing levels of competition. The owner looked for new revenue streams and a way to set his stations apart from the competition. He installed FOOD MARTS in each of his stations that had competing stations on the opposite street corner.
It worked! People faced with two stations, offering the same product at nearly the same price, preferred his stations. Not only did they buy gas, they also often bought snacks and drinks adding to his revenue. His activities revolutionized gas stations. Today, it is rare to find a service station that doesn’t sell food.
Aren’t there high-margin, impulse-buy items you can offer to complement your core business lines? What other consumer products can you add to your business that would complement selling furniture? What other services might you offer through your store to people who buy furniture?
Build Relationships with Customers
In a lot of furniture stores, salespeople stand around waiting for customers to walk in the door.
Generally the number one complaint that salespeople have about their stores is low traffic. No matter what your traffic is, most salespeople who are “door dependent” feel that it is too low and the major reason they are not hitting their personal income goals. They blame their inability to reach their income goals entirely on your marketing efforts.
• “If he would advertise more…”
• “If he would lower prices...”
•“If he would do more direct mail...”
• “If he would advertise differently....”
• “If we had a better location
”Instead of allowing them to place blame, storeowners need to start teaching salespeople to create a shopping experience that builds life-long customer relationships. Getting to know your customers is the key to building relationships.
Research shows that for every dollar you spend making a sale to an existing customer, you spend seven to make a sale to a new customer. A periodic properly designed and executed survey of your existing customers’ impressions of their shopping experience in your store will go a long way toward helping you retain them as customers and attract more new customers.
What are you doing to develop your existing customer base? Do you have a plan to develop one-time customers into lifetime clients? Do you know what the lifetime value of a customer is for your store? Do you have a follow up plan? Do you have a plan to keep in touch with customers? Do you have a way of transferring orphan customers to salespeople for follow up? Do you have a way of monitoring customer development efforts?
Winning the Game
The difference between stores that grow and those whose sales slow, will have more to do with the quality of their selling model than any other factor. And the most successful stores will have a model that focuses on creating a total shopping experience for their customers.
John Egger, CEO of Profitability, Inc., helps retailers refocus their marketing strategies from the current M.A.D. (Mutually Assured profit Destruction) policy trend, to compete against other industries and stores based on value. Inquires can be sent to John care of FURNITURE WORLD at jegger@furninfo.com.