Management, Leadership, and Success -

There's a lot to talk about here, and I think that these issues are paramount to forming and growing a successful sales organization. I've been witnessing an especially depressing work environment where people are not valued, managers work tirelessly in the service of themselves, and there is no organized training, development, or reward system for employees - even though the company (which will remain nameless here) touts itself as being employee-dependent and offers pathways to "improvement".  The issue is that while these programs exist, their application for low-level employees is entirely dependent upon managers allowing employees to interact with the system, and there is no internal control system to ensure that all employees have the opportunity to do so.

I believe strongly that you "manage" things: Systems, plans, policies, paperwork, reporting --- all the systemic things that help employees do their jobs. People do NOT need to be "managed" - they need to manage themselves, and be given all the necessary resources to do so.

You COACH people. You develop them through formal training combined with on-the-spot coaching. And, coaching happens in-the-game! Coaching in the business of personal selling requires having a "game plan" - which has been my overriding theme forever.

Leadership in our business means bringing people to their goals. That's THEIR goals first because if your people achieve their goals, you will achieve, and surpass, your goals. Almost everyone wants more than they're getting, so this is no surprise, and it's leadership that gets them there. you concentrate on them, and you all winIncluding your customers. Most sales managers and owners I've met concnetrate on their own goals - the company goals, but in one-to-one selling environments they can't get there without individual performance at the point of contact. So, change your focus.

When dealing with individual sales performance I like to begin by ranking my staff by the two critical metrics that make up sales performance: Close Ratio and Average Sale. Determine the store averages for both metrics, then see who is above and who is below these two averages. Close ratio is the big item here because relatively small variances are actuall big in their affect on overall performance. For example, if average sale is equal between two individuals, but one closes at a 20% level and another at 22%, that's a 10% variance in total sales. If one is at 20% and the other at 25%, that's a 25% variance in total sales.

Close ratio is the toughest thing to fix because it requires changes in the way salespeople engage customers, determine needs and wants, offer solutions, present products, and close sales.

Average Sale can be easier to undersatnd and fix if you look at the one thing that MAY be the indicator of performance - sales-by-salesperson-by category. Lookiing at it first as percentages of total sales will show you where work is needed. For example, in most stores the highest ticket sales are bedroom sales. Salespeople who are weak in bedroom (set) sales will have issues with average sale - but any category can be viewed this way and a training program developed for individuals by category.

Close ratio also has a "prime factor" and that is Be-Backs! Customers who return to the store (and MAYBE to the salesperson) a second time on the same project. More "Be-Backs" equals higher close ratios every time. My long history of tracking these matrics shows that first-time shoppers on a new furniture project, buy around 10% of the time. But, on the second visit, the close ratio exceeds 70%.

Enough for now? Watch for more.

Retail Coaching Defined

Coaching for Performance Improvement  

What is Coaching in the Sales Performance environment?

Coaching in the environment of one-to-one selling on a retail furniture selling floor is different than coaching a sports team where individual players make up the team, but are dependent on the other players’ performance for both individual and team success. Think of an NFL running back being dependent on linemen clearing the way. Once past the line-of-scrimmage, the back is largely on his own, and individual skills are predominant. While it is important, in our retail environment, to each individual that the team succeeds overall, an individual salesperson can do well on his or her own.  He problem is, the selling strategy he or she uses is entirely their own.

In our world, teams don’t engage individual customers – individual salespeople do – so it’s purely a one-on-one relationship – like Golf or Singles Tennis. What is different, and missing in most Furniture Store systems is the overall, guiding, selling strategy – the GAME PLAN in sports terminology. Given the importance to the organization of each individual customer engagement, the lack of any written, planned, executed, and coached selling strategy has always amazed me. The ONE POINT where customer contact occurs is usually unscripted, undocumented, unplanned, and unobserved.  No one is observing the game being played to make necessary adjustments to behavior to comply with the written selling strategy of the company. There is no written selling strategy.

This leads to there being no “coaching” based on the COACH actually observing the “game” being played and coaching individuals based on what actually happens out there between a salesperson and a customer. In my long experience on furniture store selling floors, when there is an observation made by a sales manager or team leader, it is usually a one-off situation wherein the manager, having overheard or seen something happen between a customer and a salesperson either inserts herself into the game playing the role of salesperson,  and whether successful or not, moves on. Without timely follow-up coaching, feedback, additional training, re-observation……no learning takes place. Learning, in my way of looking at retail sales training, is only proven through execution, and the only way to know if execution takes place is to observe it, review it with the salesperson, and coach it – many times.

Additionally, the coach doesn’t have to be the greatest player. She just has to fully grasp the principles underlying the strategic game plan, and understand how to gain the trust and respect of the individual players by being dedicated to their individual success, and to the goals of the team – the store and the company. Leadership is an art, and not everyone can do it well, but those who can deserve respect and followers.

Why Do People Follow Their Leaders?

Here's an idea that I picked up along the way: people don't follow you because of what you know, or what you can do. They follow you because of who you are - how you act and interact with them and other people. They follow willingly because of how you treat them, value them and their work,  help them to succeed, support them, teach them, and learn from them.

Of course, the things you do, know how-to-do, and teach them to do, are important to the organization, but the organization isn't a "who" - it's an "IT" - a mental construct that is inorganic in structure, like an Organization Chart, but filled with real people doing real things - tasks that interwoven with everyone else's tacks make the organization, in a way, "alive". To the extent that you can help people learn the things you know and coach them to actually do those things is a measure of leadership - and willingness of others to follow you. it's coaching that makes the difference.

This is why I talk about sales "management" in a kind of abstract way because I firmly believe that people don't need to be "managed" .... they need to be given the knowledge, information, training, support and COACHING to manage themselves. You can manage things, systems, processes, planning, inventory, but people you have to lead. Leadership isn't about what you know or can do, or have achieved, but what you can help others do or achieve. How many great coaches in sports have been able to develop star players who play at a far higher level than the coach ever achieved? Of course, these players come to the game with already high levels of natural talent and playing proficiency that has been developed at lower levels of play. This is not usually the case in businesses like ours and our "managers" often allow some of these people to fail through simple neglect of the basics I spelled out above: learning, coaching, observation, feedback.... the basic formula of true coaching and development.

One other major weakness in retail organizations - particularly narrowly focused ones such as furniture stores - is that there is no written game plan (how we play) to guide them. While in sports there have been such notable innovations as the West Coast Offense which is a defined way to pay - a game plan that all players and coaches understand. The point is - there's no West Coast Offense in the furniture business. When I developed Customer Driven Selling along with other members of our company way back in 1993, it was an attempt to provide our clients with such a "way-to-sell", and now my newest effort titles Essential Success Selling carries this onward for today's retailers who face a world of different obstacles, problems, and opportunities. We're all up against the on-line sellers these days and they are doing great - mostly because of price issues and ease of shopping from home. Stay tuned for more on all this

Developing Your Selling Strategy

The first building block in the Foundation is strategic planning, setting the foundation stones for how you want your company and your sales staff to deal with your customers. But, where to begin?

Following up on one of my previous Blogs, the first step is to clearly document your thinking and that of your best advisers, salespeople, partners, and business writers. I say this because one of my favorite foundation issues came from Steven Covey, author of "The Seven Habits of Highly Effective People" and "Principle Centered Leadership" , my two favorite business books ever.

Covey wrote; "Sometimes, the way you SEE the problem, IS the problem."  So I suggest you look deep into the things you think about your business and about the performance of your people in all areas, and find out what's really going on in your business. As an outside consultant, I was able to use a technique that opened many doors for improvements to both new pathways and better results all around. We'd get everyone together in a conference room or break room and pass out Post It pads, all the same color, and ask one simple question: "What things need to change?"  Everyone was to provide three suggestions by printing (no writing) which I collected and simply posted to a wall space. We would change the question to suit the group and the company. I would gather these and ask a random volunteer to sort them by area of the business. Then I'd pass out some sort of small colored sticker - 10 to each person and ask each individual to place their stickers onto the Post It notes they believe needed the most immediate attention. They could place all 10 on one item or spread them around according to their beliefs in what things required the most attention.

There might be Sales Department issues, Office issues, Delivery & Service issues, Merchandising issue..... all would come out in these wide open sessions. Most clients told me that this was the best meeting they ever held. It's simple to do and fun, but should be monitored by a neutral person.

This is as "Old School" as it gets, but it was very effective in opening discussions that may have been buried in the company culture. Owners had to be very open to this and most were. From these discussions, the foundation of change were built and the beginning of a strategic plan developed for the company.

In the area of Customer Engagement and Retention when our attention was focused on these areas, new doors opened and everyone began to feel "connected" to developing a better company. This was a way of putting "First Things First" - another of Steven Covey's foundation principles.  So, think about tapping into the pool of talent and intelligence of all of your employees as a way to begin.

Management or Leadership? What's the difference?

This is my view of this issue. I have believed for decades that in our business there is far too much "management" and far too little true leadership. What's the difference? People follow leaders and they obey managers - most times. In the military, true leaders are in the field, on the line with the troops. They go in to battle along with the troops. Managers are somewhere else (in their offices) doing planning, recon - important things that guide the people out front - "in the trenches" as we used to say. 

My thinking regarding planning and strategy development requires a lot of "management" work and front line sales managers (leaders) as well as executives need to be involved in the process - the people need and deserve a plan for success that is based on what your customers need and want, and someone has to see to it that this strategy is actually implemented by salespeople. Plus, no strategy is perfect from day one, so front line managers (leaders) must be able to suggest changes to the overall strategy based on the realities on the floor. Unless you think this way, your business can become unresponsive to changes in your environment which are caused by external issues - like the general economy, political upheaval, economic issues (like the bankruptcy recently of one of the top-ten ocean shippers of furniture products) that affect both your business and how people think about major purchases like furniture.

Of course your selling strategy has to be melded with all of your other strategic initiatives in merchandising, purchasing, pricing, marketing, service and delivery, but too many retailers haven't learned the "holistic" nature of it all. The point is that leaders take the things that managers give them, develop training for how to incorporate these things into the work of salespeople at the point of contact, and implement them on the floor when the defined opportunity presents itself. Your customer engagement strategy, when implemented, will tell you when that is.

Leadership in our kinds of selling requires a lot of planning, development of approaches and specific ways to present products and to understand the real issues your customers are dealing with. In other words, training - which includes both specific dialog you develop with the input of your team members, suppliers, top performers, and competitors. Remember this: If you want something to be said in a specific way, write it down. Ensure that everyone "gets" it - then be a true coach and watch the game being played. Think about this: When you watch a ball game on TV, are the coaches in their offices doing administrative things? NO! They watch every player on every play and make adjustments accordingly.

My goal has always been to have the highest paid sales people in town. They have to earn it, of course, but everything you do as a sales force leader is to make this happen. Follow the metrics, because they tell you everything if you analyze them correctly. You have TWO key metrics to be concerned about: Close Ratio (first), and Average Sale. For starters that's all you should be concerned about. But, the next one is product category sales by salesperson over time. You will have differences in Average Sale for example. I've seen this difference from my top performer in this metric, to my lowest to be as high as 40%. And, the most common cause? Bedroom sales!

For most full line furniture stores bedrooms are the highest overall ticket items in the lineup. I know you're getting this, so I won't belabor the point, but leaders as coaches and trainers can fix these kinds of things through training, observation, feedback and follow up.

More on true coaching next time.

What Are the Four Foundation Blocks of Great Sales Management?

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To me, the four foundation issues for developing a great, successful sales management system are:

1. STRATEGIC PLANNING. Developing a strong, customer-focused selling strategy - your "game plan"- tells everyone on your team how you want the "game" to be played. You spell it out in detail from the point of greeting a customer to the point of saying goodbye. You have a detailed methodology for truly engaging each customer and each customer "type" such as first-time shoppers on a new home furnishings project, and "be-backs" (customers returning again on the same project) and for follow-up with those who do not purchase that day.

2. TRAINING and teaching specific behaviors and,  based on your strategic plan, both off the floor in "practice sessions", and on the floor in-the-game. In other words you TRAIN and then COACH the "game". This should be the daily task of sales management in one-to-one retailing where all revenue moves through a personal interaction between salespeople and customers.

There is, of course. a high need for product training all the time and for additional strategic training around how to present each product to a customer. If you want it done a specific way, using specific words or phrases, write it down and practice, practice, practice. Don't leave anything up to individual "interpretation" - arm your salespeople with the right stuff.

3. COACHING in one-on-one sessions between sales managers (coaches) and salespeople (players). Coaching should be based on achievement of goals. Both goals - yours (the company goals, and theirs, for higher income and a better quality of life.

In too many companies in the retail furniture business  - the top  three principles owners and top level management people appear to use to "manage" salespeople are: 1. Intimidation, 2. Threat, and 3. Fear.

Intimidation and threats come in the form of statements or conditions that state or imply outcomes such as: "If you don't sell (this much) you'll be fired. Or "if you are in arrears this much, you'll be fired." Fear, a human emotion that differs in effect among individuals , is the desired result of intimidation and threats with the expected conclusion that these things are what's required to "motivate" employees to perform better. "If they don't perform better, we'll get rid of them and get new ones" seems to be the "leadership" principle involved.

4. GETTING AND USING THE RIGHT METRICS

There are two foundation metrics that every furniture retailer has to know, and has to know them by individual salesperson - overall numbers are useless, but interesting. The two critical sales performance metrics are: Close Ratio and Average Sale. Of course in order to know your close ratio, you have to know your actual, accurate traffic count - in a one-to-one selling environment you must know exactly how many customer opportunities you get to serve over any time period.

Most furniture stores are not like Walmart where nearly everyone who enters the store makes a purchase, and can do so without interacting with any employee - even at checkout. Our business requires not only personal interaction, but high-quality interactions due to the nature of the purchases being made.

If you have a salesperson who closes 30% of the sales contacts she engages and another who closes only 20%, the variance in performance is 50%! So, if your store average is 20% close ratio, meaning you DON'T close 8 out of ten opportunities, closing only one more out of every ten raises your sales by 50%!  Improving from 2 of ten to 3 of ten is a 50% improvement.

Without the customer traffic metrics you cannot know this and therefore cannot change it. 

In any group of one-on-one sellers there will be a range of performance (ROP) among the staff, and it is here, in these metrics, that the opportunity for improvement lies. More on this next time.

 

Strategic Sales Plans for Furniture Retailers. The Foundation of It All.

If there is one common weakness I've seen in working with hundreds of retail furniture companies it's the lack of a clearly written customer engagement strategy that forms the basis for all customer interactions, starting with "Hello, welcome....." and proceeding through the engagement until the customer makes a purchase and/or leaves. 

In sports terminology, this is a "Game Plan" - it's a "How we play the game here" kind of statement, and it should form the foundation for all sales training, management training, and coaching on the selling floor. Note that I separate "training" from "coaching" because sales training isn't only about the quality of the training material, or the way that it's delivered to people, and it isn't about the other side of training or teaching - learning. It' really all, and only, about execution in the end. That's turning the ideas, concepts, and systems learned into actions by the trainee. This is why, to me, coaching is the primary role of sales managers.

We coach to the plan - the strategy. In my earliest position as a sales manager for Ethan Allen in New England our strategy was clear - get into the home, because that's where the problem was. Even when the solutions were clear as to which things to offer to a customer, the "problem", for her, was in her home - her room. So, remember this: To your customer, the purpose of being in your store is not about the furniture first. It's about the ROOM first, then it's about the furniture. A lot has changed by now about how people shop for furniture - and buy it - but not that. In the end, it has to work in her room, and all of us have heard many times, something like: "Oh I like it. I just don't know if it will work in my room."

In my game plan - even today - there will always be a time to say "Tell me about your room. What are you hoping to accomplish there?"

More on this next time. Think about it, please.

Sales Leadership vs. Sales Management vs. Sales Coaching

I've been at this game of sales management in the retail furniture industry for over 40 years now. I've seen the good, the bad, the ugly, and the great. So. at my advanced age, I want to pass along as much as I can through this Blog. Remember, the things I write here are matters of opinion, but no one can be absolutely positive about matters of opinion. Everyone has to fit any idea into their mental structure and philosophy of life - of how things should be. So, here goes...

I don't believe in "managing" people. I do believe in managing things, systems, non-human stuff that needs to be organized, controlled, counted, moved around, accounted for... like inventory or just plain old "stuff".

I believe in helping people, coaching them in the sense of sports coaching, leading them to success - teaching them how to "play the game", how to play their position, how to interact with team members, but remember, in the retail furniture business, in bricks-and-mortar stores, there is seldom, if ever, a "team" working with a customer. It's usually one-on-one selling - or maybe one salesperson and a couple, or a family, but there is seldom a "team" approach applied. In this regard, "team" means that group of people who work face-to-face with customers. It's singles tennis, not baseball.

People need to manage themselves. In work situations they need a structure, training, guidance, advice, a purpose (usually outside the workplace - like a family to support) or inside the workplace - the ability to succeed, to be respected and valued as a contributor to the success of the company and the "team" - and, most of all, to the quality of life for their customers. 

Salespeople need to have achievable goals for themselves, and a pathway to get there provided by the company - which, to me, is one of the purposes of the company - to help employees achieve their goals. I think the goals of the company should, and must be of equal importance as the personal goals for income and job satisfaction of the people who make up a company. And, for retail salespeople who go face-to-face with customers everyday on issues that affect peoples' homes and lives, achieving those goals is intimately connected to the company's success.

More on this next time.....

Welcome to my BLOG - Living on the Top Line

Living on the Top Line means that this blog is about sales, selling, and sales management focused on the retail home furnishings (furniture) business. I've been involved in the retail furniture industry for 44 years now, and my book, also titled "Living on the Top Line" was written after the 2008 financial crash to help furniture retailers deal with what I call, the new retail reality.

Since then, things have gotten even more confusing and competitive for furniture retailers and their salespeople and support employees with the advent of online retailing of furniture - something that a lot of people in our business said would never happen - and I want to offer some ideas, suggestions  to salespeople, managers and owners of Bricks & Mortar stores that might help improve your business and the quality of life.

I have found over my years working with hundreds of stores as a consultant and adviser that the one common missing ingredient is that lack of a well-thought-out, written selling strategy (or system) that everyone fully understands and is committed to every day. It's the Game Plan that spells out how you will meet, greet, serve and retain customers in this new retail reality.

I hope I can deliver on that promise, and look forward to feedback from everyone. You can reach me at joefcap@gmail.com with comments or questions.