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.