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4 Things You Should be Doing Right Now to Regenerate Your Business1. Get your website up to speed.
Speed means selling directly from your site to consumers in your delivery area. If you're not already doing this you're a couple of years behind the times to say the least. Forget all that usual "conventional wisdom" about customers having to touch and feel furniture. It's true for some and untrue for others, and you'll miss those people when they find something they can buy online. If you make this easy enough for them, and have a 100% satisfaction guarantee to eliminate the risks, you can make those uncertain shoppers into raving fans with a little creative thinking. Put someone great in charge of this initiative and stop betting your future on door traffic that might never develop. You've got two whole generations coming through the cycle that have grown up online. You need to go to them instead of waiting for them to come to you.
2. Make the customer's experience exceptional.
Make the experience in your store at least as good as you make it look on your website. Managing your customer's store experience and making it exceptional is one of the critical retail issues worldwide. In today's retail reality the same old thinking and methods aren't going to work like they did for, oh, fifty years or so. When you realize the simple truth that your business isn't about the things you sell, but rather about your customers rooms and homes you'll be able to break the hold of the past on your creative juices and look for new ways to engage, serve, and hold on to your customers. There are countless solutions available to consumers from thousands of sources, both in bricks & mortar stores and online.
Improve the quality of your salespeople. Have a selling strategy that ensures a great experience for every customer every time and put managers and coaches in place who can make it happen. Have a written merchandising strategy to support your selling strategy (not the other way around). Internally, concentrate on your people's goals, they'll probably be higher than yours, and let them concentrate on their customers' goals. Provide training and coaching to get customers and salespeople to where they want to be and everyone will win in the end.
3. Live in the metrics.
Take control of your business by understanding all of the critical metrics that tell you what to do, where to make adjustments, what s working and what's not. There are critical sales metrics, merchandise metrics, financial metrics that can keep you fully informed on a daily basis. If your computer system has these reporting capabilities and you're not using them, start tomorrow. Use the metrics to tell you where specialized training is needed. Manage your range of performance in both people and merchandise.
Develop and provide training by category where you'll find there is a range of performance in people's abilities to sell some categories. Flow your inventory and pay attention to turns and cash-flow. Make quick decisions about what to keep and what to dump. Don't buy discounts, buy quick turns. Discounts for quantity are specious at best, deceptively appealing. Work with vendors who can help you generate positive cash-flow and don't live with poor selling merchandise in your mix. Track inventory performance daily. Invest in a sales management system targeting the front-end of your business, and, for heaven's sake, count your customers.
Use all the online tracking devices you can find to track how your website traffic acts on your site. You cannot improve what you do not measure.
4. Use every available communications method at your disposal.
This is a whole new thing for owners and manager to think about. Social networking, Facebook, Twitter, email as your primary customer communication tool and things we haven't even seen yet. This is critically important for businesses that want to grow in this changed world. A media-based strategy alone will not give you the thrust you need in this environment. Go direct to people through e-marketing, instant messaging, blogs, email, and attract a whole new world of consumers.
Now, you also have to do nearly all of the things you've always done, except maybe not so much. You know the 80/20 principle, so think hard about getting a lot better at the 20% of activities that now provide 80% of your results and don't worry about the 80% of things you and your employees do that don't matter all that much. Besides, there are a lot of new things that will soon be part of the 20% that really matter.
(Posted 2/16/2010 by jcapillo) |
What you don't know about your customers can kill your businessDo you know the percentage of furniture shoppers who make their purchase on their first visit to your store? Do you know what your closing ratio is on shoppers making their second visit to your store on the same purchasing project?
Do you know how many of those first-time-non-buyers actually make a second visit? Do you know the number one reason furniture shoppers report for not making a purchase? How about the second reason?
If you knew these answers do you think you might be able to take actions that would greatly improve your chances of getting shoppers who don't buy on their first visit to return?
I can tell you that the reasons shoppers don't buy have less to do with what you sell and much more to do with how you sell it. Your customer interactions are in the hands of individual salespeople (unless you're IKEA or another such self-service furniture retailer) so you should have more control over those interactions and be able to learn the things that are on your potential customer's minds around making the right purchase decision. However, if your selling focus is on your products and closing techniques, you lose way more often than you win.
It's simple to understand, too. Furniture store conversion rates (close rates) continually hover around the 20% range. Even if you track your store's close rate at 30% (which is 50% higher than my number) you still miss something 70% of the time.
In "Living on the Top Line" I show you how to deal with all these issues and build a selling strategy around properly opening the sale, and giving the lady what she wants - more help! It could mean 50% more business if you do some simple things better.
(Posted 1/10/2010 by jcapillo) |
The Real Heros of Furniture RetailingOn this last day of 2009 - pretty much a terrible year for most furniture retailers - I can't help thinking about the one group of people in our industry who, in the words of Rodney Dangerfield, don't get no respect.
They're also the most undervalued, under-coached, over-managed, underpaid, and under-trained people in the business. They're also the most important people in the business, but because of all the over/under things I stated above, our industry and its relationships with consumers suffers greatly.
I'll state my position right up front so there's no mistaking where I'm coming from: These people are our industry's face to the consumer. They see all our customers - every one of them. The owners of retail companies don't, the manufacturing leaders don't, reps don't, no one in the industry press does, none of the gurus of furniture design do.
Every day, in all the furniture stores in America and around the world, retail salespeople generate all our revenue, for most traditionally structured stores, every dollar of revenue passes through a salesperson. Think about that.
I read many industry publications. I marvel at how much hype and hyperbole can be generated around some new product introduction (as if someone has invented a new room for homes that no one every heard of before) while we're still furnishing the same kinds of rooms we furnished in 2000, 1990, 1980, 1970 - and as far back as anyone can remember. Same old, same old.
My favorite topic in the press is who's working where this week. The industry is like a giant recycling bin. How does any of this affect how consumers interact with us, make their purchasing decisions, and finally buy?
Remember this: all the hype and excitement around those new product introductions, new innovations in design or construction or materials, all the dreams of furniture designers and makers, all the plans of retailers and marketers across the industry, comes down to the interaction between one salesperson and one consumer. Nothing else matters. Every time I've attended a market, and that's hundreds of markets, I think the same thing: The wrong people are here!
I'm devoting the year 2010, to improving the way our industry views, values, and supports the tens of thousands of people who face our consumers every day - the ONLY people who are out there every day with your customers.
(Posted 12/31/2009 by jcapillo) |
Here's how to generate 15% more sales with no more shoppers than you're now getting.It's a matter of knowing and understanding the range-of-performance among your salespeople in every major category you sell. Let's say you have fabric upholstery, leather upholstery, reclining upholstery, bedroom, youth furntiure, casual dining, formal dining, occasional, entertainment furniture (non-upholstery), mattresses (bedding), home office, lamps, rugs, accessories ... in other words, a lot of categories.
Whether you're a traditional multi-vendor, multi-category furniture store, a branded store or independent the following will be the case: When you look at sales by cateogry by salesperson over a long time-frame of 90 days or more, there will be some people who have great numbers in a category while others have terrible numbers in the same category. My two favorite targets are upholstery and bedroom, and upholstery can be broken down in a couple of ways as a further drill-down.
These are usually the two categories that provide around 70% or more of total store sales. Anyway, the differences in volume generated by full-time people on matching schedules often varies widely - sometimes by 50% or more.
What's really startling is when you indentify your shoppers by category - like in "what were they shopping for?" you find that your salespeople will all get about the same number of opportunities in each category. This is because of the random nature of how customers come through the door and not because "she gets all the good ups."
My point is this: if you don't know these critically important things about your business, you're letting tens or hundreds of thousands of dollars walk out the door each year due only to poor selling skills in just some categories. For multi-store companies, large regional chains, and national branded stores, the missing sales you could have, should have, and would have made if skills were better are in the millions of dollars per year. You already got the traffic - you attracted the customer to the store, and you failed when they got there.
We all know that to really sell upholstery well you have to have a sense of fashion and style and be able to deal with customer's uncertainty and fear of making a mistake. Some salespeople can do it, and some can't.
In bedrooms you have to be able to talk about master bedrooms differently than guest rooms or children's rooms, and you have to determine what look and feel the customer wants in the room. The master bedroom is a very personal space, unlike upholstery that usually fills more public spaces. Some salespeople can do it, and some can't.
If you want to know why your business isn't better, just slice and dice it in more detailed ways and always, always deal with individual performance because that's where all your revenue comes from. You'll soon see that the only thing equal among salespeople is the number of customer opportunities you give them. Mostly, it's not their fault.
Read more in "Living on the Top Line" my new book available at Amazon.com.
(Posted 12/11/2009 by jcapillo) |
Retail furniture sales is a high paying job if you know what your doing. If you're selling and not earning $50,000 or more, read this.Fifty thousand dollars! More than any other earnings figure, this is what salespeople tell me the want when I ask them for their goal for themselves. I'm not interested in what they think their bosses want, or what they "wish" they could earn, but what amount in their paychecks would make a substantial difference in their quality of life. Fifty thousand dollars is the most stated number, so while there are a number of salespeople in just about every store who earn this amount or more, the great majority of retail furniture salespeople earn below this amount.
Over the decades, our industry has earned somthing of a "low pay, long hours" reputation - as has most front-line retail jobs. I believe there is one reason above all others that people selling furniture don't earn more money - a lot more money - and that's because they don't believe it's possible for them to do it. That non-belief proves true every time, because thoughts are like magnets and affect behavior, motivation, drive, and results. Henry Ford famously said it nearly a hundred years ago when he said; "Whether you think you can or you can't, either way, you're right."
Of course merely thinking positively won't make anything happen. Rather, positive thinking simply allows things to happen when your course of action is in line with your beliefs. But, you need some help. You need a coach to keep uour focused, make sure your skills are top-notch, measure everything, translate and report to you on how you're doing along the way, and coaching you using proven ways to improve your performance and achieve your goals.
First step: Hire your boss as your coach. The person you directly report to is the person who should be responsible for helping you do the right things (not just doing things right), keeping you on track, observing your "game", teaching, measuring, and suggesting ways for you to improve. You are in a position where you may not be able to choose your coach, but you surely can use the person who's there.
Second step: Understand fully all the things that go into achieving your goal. We'll cover them in our next few blogs, and you can find them in my book titled "Living on the Top Line" available at through the link on my website at www.joecapillo.com/solutions store.
(Posted 11/27/2009 by admin) |
It's time to really know your buisness, and it all begins with how many shoppers you getThere is one starting point for all retail performance analysis - accurate traffic counts. But the most accurate door counter in the universe won't help you improve unless you can drill down to the individual salesperson level and know how many opportunites (shoppers) each salesperson engages.
Here are some simple truths about shoppers and salespeople you must understand. I don't state these as being my opinions, but as facts that apply to any organization that allows individual salespeople to serve individual consumers in a one-to-one selling engagement.
1. If your salespeople are on a rotation system where your goal is to give all salespeople equal opportunities, you are likely losing business. Performance, as measured by dividing total written sales by total customer opportunities will show as much as a 60% variance from best to worst.
2. Your lowest performers take more customer opportunities (UPS) than you best performers, multiplying your losses.
3.Because the result of the division is influenced by the combined affects of close ratio and average sale, you can have the same result with one factor being high and the other low, showing that improvement is possible at all levels.
4. If you further identify your customer traffic by those who are first-time shoppers on a given project and those who are returning a second ot third time on that same project, you'll find that your close ratio on first-timers is very low, while on return customers (be-backs) it's very high.
5 You'll also find that those be-backs buy more than first time shoppers who buy.
For all furniture retailers trying to survive in the most difficult market environment ever, improving individual performance at the customer level is mandatory. The sales you need to remain profitable are right there in the minds and bank accounts of shoppers who already came in, could have purchased, would have purchased, and should have purchased, but didn't because of one simple thing your weakest salespeople didn't do; provide more help.
For answers on how to manage these variances, make those lost sales, and improve your top line, email me at joe@joecapillo.com.
(Posted 11/20/2009 by admin) |
Get Your Salespeople to Their Goals for 2010Every business sets financial goals for the fiscal year and develops plans to achieve them. There's a difference between goals and budgets, but it's more a terminology thing than a disconnection. You want your business to be profitable because that's one key element in the very nature of a commercial enterprise, but do you think about your employees the same way?
Now is a good time to look ahead to next year, and commmit to bringing everyone in your orgnization to their personal income goals for the year. Understand that doing this will require taking many people out of their comfort zone in terms of what they believe they can achieve and what they're willing to actually do to achieve it. Nonetheless, it is a legitimate responsibility of sales management to do just that.
Of course when you commit to helping people achieve their goals you have to be prepared tell them how to do it, assuming that if they knew how they'd already be doing it. Wishful thinking is not a strategy. Can you list specific behaviors, actions, and performance plans for your salespeople to follow on an individual basis to achieve more than even they think they can? Do you have a management and coaching system in place to ensure they do these things? If not, your disconnected from the biggest potential gain in sales you can have - bringing salespeople to their own personal income goals.
If you can achieve this one thing, you don't have to worry about much else in your business on the selling side. Yes, you need a plan, and yes, you need a well documented selling strategy or system, but I know of nothing that can pay off more than bringing individuals to their own goals. I can assure you that when you drill down deeply into people's financial goals, you'll find that if you could help them achieve these goals - assuming they're reasonable (and most are)- your business will exceed your financial budgets by a lot. Their goals will always be higher than the one's you set for them. In fact, the goals you set for people LIMIT some people because they believe that if YOU don't think they can do more, why should they?
Send me your thoughts on this at joe@joecapillo.com
(Posted 11/11/2009 by admin) |
Sales Training Will Make the Difference - When It's Done RightWhen I think about all the things retail furniture sales managers have to do that have nothing to do with making the next sale, but rather saving the last sale - I wonder....
The three areas of knowledge salespeople deal with require a high level of training, particularly with new salespeople. I think that about half of a retailer's customer service issues (incoming calls) could be stopped with better training in all three areas: Systems (how your company works), products (the things you sell), and serving customers - the real purpose of having salespeople in the first place.
What happens in many companies is that sales managers become "technicians" and spend their days dealing with systems issues, process stuff that should have been done right by salespeople in the first place but wasn't because they truly didn't know how. They don't deal well with the systems we employ, and rather than improve training and performing constant update training to sharpen skills, we allow our "sales" managers to handle all this stuff.
As for products, there are so many thousands of things to know about all the different stuff you sell that most new people never learn it, and this causes lost sales, "bad" sales, misinformed customers, customer dissatisfaction, and lots of incoming service calls that also usually find their way to the sales manager's ear.
In the art of selling, where everyone's attention should be focused to ensure optimum performance and customer satisfaction, salespeople are pretty much on their own. Sure, there's some initial training, but once you set them free on your customers, they're pretty much on their own to succeed or fail.
A few succeed at high levels. A few fail, and many perform around some agreeable norm, but unless you carefully measure your revenue per customer opportunity, this is hard to see.
Because the sales manager is usually tied up in technical matters - fixing problems that never should have happened in the first place - the art and skills of selling usually go unmanaged. Training usually stops with the end of the salesperson's initial training period.
The reason sales training often fails is that there is no real compelling management system to ensure that the things learned in training are actualized on the selling floor. Managers are too busy handling service issues, sales order management, price tagging, and management reports to spend any time on sales.
For more on this, go to my website at www.joecapillo.com and click on the link to my new book on sale now at Amazon.com in the Solutions Store tab.
(Posted 11/5/2009 by admin) |
How to Get More From Your Current Customer TrafficThe more things change the more they remain the same. Heard that before? I see it every day in my retail travels, and I continue to see that the most important way for retailers in late 2009 and after is to improve the individual performance of salespeople by providing them with a simple "to-do" list that targets the primary drivers of sales performance in our business.
I believe there are two prime principles that drive our business and to get the maximum revnue from every customer opportunity you have to be good at both these things:
First, work through the ROOM. It's the room where your customer's uncertainty lies. It's the look and feel of the room that brings uncertainty to many purchasing decisions, and many shoppers will delay making that decision until they are certain that there will be no costly mistakes made. Solve the room issues, reduce the uncertainty, be able to show it visually, and you will make a lot more sales.
Second, because of the complex decision making process around design issues, a high percentage of shoppers (90%) will not buy on their first visit to your store. This means your goal should be to perform at so high a level on the first encounter that a second visit is assured. Second-time shoppers on a project buy 70% of the time or more, so getting them back is everything!
You can measure this yourself but if you don't maintain traffic records, you can't. Customer visits start everything, so you must begin any effort to improve with that stat. If you don't count traffic in total and by sales associate, begin today.
Visit our website at www.joecapillo.com and go to the Solutions Store to buy my new book on how to do all this and make the changes you must make to succeed in this strange new world of ours. You can also go to Amazon and look for "Living on the Top Line". The book is for everyone in furniture retailing, owners, managers, and salespeople.
(Posted 10/24/2009 by admin) |
Living on the Top Line by Joe Capillo, NOW AT AMAZON.COM |  | |
My new book Living on the Top Line is now available at Amazon.com. I've distilled decades of experience in managing retail furniture stores and advising some of our industry's biggest and smallest players inot 243 pages of simple things you can do to transform you business, and capture every available consumer dollar, while building long-term relationships with your customers.
Use 80/20 thinking and working rules. Concentrate your training, learning, and working efforts on those critical things that generate 80% OR MORE of your sales and profits. Minimize the attention to the other 80%, or farm it out, or buy better operational systems, but spend your time on sales, because 100% of your revenue comes to you there.
This is simple thinking - if you spend 10% of your time out on the floor with your salespeople and customers, and this generates 100% of your revenue, what would happen if you spent 80% of your time out there with salespeople and customers applying a proven strategic plan to how your customers are served? My experience and research shows that if your last 1,000 customers generated $250,000, you can generate $300,000 from your next 1,000 simply by doing the things you'll learn in "Living on the Top Line." That's a 20% increase in revenue with no additional ad dollars, no additional customers.
I'll show you how, and it works every time when you do your part. Go here to buy the book:
www.amazon.com/Living-Top-Line-How-Furniture
(Posted 10/17/2009 by drimsky) |
Watch for my book - coming soon to AmazonLiving on the Top Line is a guide to developing and implementing selling and management initiatives that will serve all furntiure retailers in this now retail reality we're living. Tha "Top Line" is of course the top line of your P&L statement where things have been pretty rough lately.
After 35 years of working in and around furntiure retailing, I've tried everything - or seen everything tried, and this book is the result of all those years of being an intimate observer and participant in the retail wars.
There is one important answer to a lot of today's retail challenges: Concentrate on individual performance if you're a store where salespeople generate all your revenue. You won't solve your problems with just promotions. Your expenses will go up, and your profits down. The problem is in the variance in results between your top performers and your lowest performers. If you're like the retailers I know intimately, you don't need any more customers, you need more results form those you already have.
I'll let you all know when you can buy the book of answers.
(Posted 10/8/2009 by admin) |
Changing times mean changing your workMy message today is that owners and managers in the furniture business have to respond to changing times with different management actions than they used before. This means they have to do different things just as their salespeople have to do different things.
First among these in my mind is to move coaching right down to the customer contact level to become involved directly in customer engagements as a partner with the salesperson. Now, I expect that many managers and owners reading this will think I'm crazy because I can't know their individual situations - how many salespeople they have, or how many stores in remote towns, and how many different things there are to do. This reminds me of the decades old thinking regarding rating the things we all have to do as either urgent or important. Getting your next promotion and the advertising in place to attract more customers from a declining overall number of potential consumers can seem urgent, and it is. But understanding and influencing what happens at the adtual point of contact in more important to your immediate and long-term success. Here's why.
If your traffic declines by, say 20%, and you change nothing you do, your close ratio and average sale are likely to remain the same as they were before, hence your sales revenue declines by 20%. In the current market environment with consumers being extra cautious, these two critical elements of your sales equation might even decline if you continue to apply old selling methods and closing techniques.
If you could change some things that some salespeople do when working with customers and improve your close ratio and average sale by 10% each, you can maintain sales revenue at the same level. This also means that had you done these same things before the traffic decline, you would have done a lot more business with the same number of customers. Oh, there's that coulda, woulda, shoulda thing.
There is a range of skills among your salespeople in all performance areas and metrics. You should know which people are below your store averages for close ratio and average sale, and why they perform that way. You can't improve what you don't measure and you can't fix things you don't know are wrong.
Get down to the point of conatct to see where more coaching and more involvement can get one more customer out of ten to buy - just one more could improve your sales volume dramatically.
(Posted 8/22/2009 by admin) |
Bad News/Good NewsI read today that things are getting worse for some of the industry's biggest names - like La-Z-Boy, Ethan Allen, and Furniture Brands. You can find this bad news story at www.wsj.com in an online article titled "Furniture Retailers Look to Trim Costs."
Calling La-Z-Boy and Furniture Brands retailers in the usual sense of the term is just not right. Ethan Allen is different from those two companies in that they have been a totally vertically integrated manufacturer/retailer for many decades, being the first to acknowledge that they had to control their own point of contact with the consumer marketplace to optimize their `potential. The driving force behind this was Nat Ancel who put it this way: "Our mission is to help our customers understand how to use our products to enhance their quality of life, not just how to buy them." But, Nat also knew that his company could not serve multiple masters. If you want Ethan Allen products, you go to an Ethan Allen store.
La-Z-Boy and Furniture Brands are, first and foremeost, manufacturers. They have been involved in direct retailing, also for decades, but are not cellular retailers - they weren't founded to do that - they were founded to manufacture. Retailing has been a secondary effort, aimed at controlling, to some degree, the distribution and availability of their products to consumers in key markets where traditional retail distribution cannot provide them with the exposure they know they need.
Of course retailers are looking to trim costs! Who isn't? But this article misses the point that these companies, except for Ethan Allen, are primarily manufacturers and the costs they are trimming are manufacturing costs. Consumers are too, and this is different than what has been experienced over the last few decades when demand was driven largely by the housing boom that provided millions of new, empty rooms to be filled.
La-Z-Boy is on the right track with its retail philosophy of providing consumers with help using their products to enhance the comfort and beauty of their homes, and their quality of life. It may be in a much stronger position for recovery than Ethan Allen because of its position on the price scale as many consumers trade down in every aspect of their purchasing.
Every consumer who enters a furntiure store today is golden, critically important, and deserving of the highest level of servce you can provide. The whole idea of "customer service" may now undergo the transition it should have undergone a long time ago in furniture retailing. Not after-the-sale service in the traditional sense, but service in the level of help provided free to consumers around how to use the products offered to create beautiful rooms and homes. That fundamental need will not undergo a diminished level of importance to consumers as home remains a haven for families in uncertain times.
The challenge for furntiure retailers will be how you will choose to respond to this most basic human need that your customers bring through the door. Old methods, old systems, old messages, and old customer engagement strateiges will not carry you forward as consumers seek to cut costs and still attain desireable outcomes for their families. The demand is there, and will be there, but you will have to earn the right to fulfill it. Call me or email me, and I'll tell you how you can do it.
(Posted 8/20/2009 by admin) |
Do you control your moment of truth - the point of contact?You're in a business where, historically, face-to-face personal selling has been the backbone of the business - retail home furnishings. No off-the-shelf purcahses here, no, everything, and every dollar goes through a salesperson.
Do you control the point of contact with the shoppers you bring through the doors? Do you have a defined "customer experience" that your salespeople are trained to deliver? If so, do you have a sales management system that ensures that all shoppers and customers receive this level of service? Can you see it happening or at least monitor the results?
In this age of instant-messaging, Tweating, Facebook, My Space - your people should be aware that consumers have changed their thinking about purchasing everything from food to furniture, and that different approaches and communications methods will have to be devised and implemented to retain customers in the new global retail reality?
However, if you believe that the customer experience is centered in your store or on the things you sell, I believe you need to think again. If the story you tell is centered on you, your products, services, and promotions you might be telling the wrong story. The real customer experience is centered on her needs, her family, her home, her room. To reach consumers today, and begin their experience with your store, you need to tell their story, not yours.
(Posted 7/31/2009 by admin) |
Here's All You Need to Know About the Recovery For Furniture RetailersIts already here! In fact, its been here forever but you didn't need it when we were furnishing all those McMansions with five bedrooms, three living or family rooms including the master bedroom "suite" in Tarrytown New York that I grew up in. You didn't see it then and now, when you need it, you can't find it. Here's what I'd like you to do. This works no amtter how big or small your business is, but it REALLY will knock your socks off if you have a large sales staff.
Get three months data together for all your people showing their number of customer opportunities (UPs),their closing ratio, and their average sale.
Calculate the average for the group in both close ratio and average sale. Figure our how much more sales volume would have been generated over the time fram you selelcted if those people below average in each of the two factors (close ratio and average sale) had performed at just average levels.
Next calculate how much more sales revenue would have been generated if everyone performed at the highest level in each category.
Finally, eliminate the data for those below average in each of the two factors and calculate the average of the people above average. Calculate what your sales revenue would have been at those levels.
You will see that your "economic recovery" lies right there in the variance in the performance of your people. The Range-of-Performance is where your growth lies. Some people need to know new things about how to improve their close ratio to the level of other people in your company. Others need to know what to do to improve their average sale.
This is what training and coaching on the floor by sales managers is supposed to accomplish. You CAN improve the performance of individual players. You CAN get more out of the customers you already get without spending one more advertising dollar than you're now spending. You don't need any more customers. You need better performance.
Finally, if you have all the above data, divide each person's sales revenue by the number of customer opportunities they served over the same time period. Rank them by this number. This number, known as Performance Index or Revenue-per-UP, answers this question: How many dollars can I put in the bank every time this person (any person) takes an UP?
There's your recovery in a not-so-small nutshell.
(Posted 7/27/2009 by admin) |
What's Wrong with Some Sales Managers?I've observed how retail furniture sales managers work for over 30 years and am always amazed at how little things have changed. My work as an agent for change in our industry began with my first experience as a store manager with only 6 salespeople to work with. What became apparent to me early on was that the salespeople were underpaid, under-trained, and under-lead, and were pretty much on their own when it came to dealing with consumers. This led to my attempt to understand the nature of the work of selling in our environments and to my fanatic concentration on obtaining and using sales metrics to build selling strategies and sales management systems.
All revenue comes through salespeople. Their success or failure is your company's success or failure. Yet what is the percentage of time that is spent by sales managers actually partnering with salespeople right out there on the floor to make them successful? That means success by their definitiion instead of management's definition.
Most sales manager do not know what metrics are important, nor do they have ways to improve them if they did know. Few managers I've met provide each salesperson reporting to them with a clearly defined, written pathway to their own goals, or help them to learn and implement actions that will improve those metrics. Here's my take on why this is true:
Sales managers who do this kind of coaching take accountability for outcomes. They know that whether a salesperson applies specified strategic actions or chooses to ignore the company's selling strategy is a reflection on them; on their own skills and abilities. It's much simpler to work with furniture, or "systems" like service, because there is no other personality to contend with, no human will to deal with, no persuasion required.
Many sales managers dislike dealing with the metrics of sales, finding all kinds of reasons to cast doubt on the efficacy of "the numbers", because metrics shine a light on deficiencies that lie within the manager's realm of control, and they don't like being exposed that way. So, instead of embracing metrics as a way to improve sales performance, they make every effort to hide from them.
It's about time all that changed. Sales volume - revenue - is not some inevitable outcome of nature that cannot be controlled by humans, yet that is exactly how many sales managers view it - everyone is doing "the best they can" and some people are "naturally" moer talented than others (true) and there's nothing they can do about the lack of natural talent (untrue).
Successful people are not successful totally because of what they are, but because of what they do - hwo they act, how they serve customers. Their actioins can be observed, documented, taught, and coached. They, too, can learn and improve and are usually the first to adopt new ways that will improve their performance.
Sales managers are there to improve the numbers - to sell more, to get salespeople and companies to their goals - NOT to open and close the store, turn on the lights, and respond to everything that happens. They are there to make things happen.
(Posted 7/23/2009 by admin) |
What the Heck is 80/20 Thinking, and Why do You Need to Use It?The principle of imnbalance as originated and developed by Vilfredo Pareato in 1897 is a "law" of economics not one of physics, but it has as strong an effect on all our daily lives as many natural physical laws. You all know this principle. Simply put, Pareto's principle tells up that a small number of influences or causes produce a large percentage of total results. We know this as the 80/20 principle, but there can be many different results, and the numbers don't have to add up to 100% either. You can have 25% of your sales staff produce 90% of your volume, or 50% of your products produce 100% of your sales. This is because there are two different data sets; the first example being for 1. salespeople and 2. sales volume, and the second example is for 1. products and 2. sales volume.
Here's why the 80/20 law should be important to us all: The principle of imbalance tells us that 20% of our work produces 80% of our results. That seems to mean that 80% of our work, doesn't produce much in the way of results. Could we stop doing that 80% and spend more time doing the 20% things and get even more good results?
Well, according to Richard Koch whose 1998 book which I recently re-read, you can! I know that of all the things I've taught salespeople to do in all the programs I've developed over the decades, only a few things are truly critical to success. If I spent more time teaching those things and more time coaching those behaviors, stores would have done more business. My current sales training for salespeople concentrates all effort on two things, and everyone thinks I've gone crazy and become senile. The two things are sketching rooms, and follow up. Nothing else matters. Do these two things well, and everything else takes care of itself.
If you're a sales manager or store owner, you don't have to spend any time on any other core sales training issues. You do need an overriding strategy for serving customer's true needs, but as far as sales training, all you need to do is teach these two things.
I don't want you to spend any less time training, I just want you to spend all your training time on these two things; learn how to talk about customers' rooms, and get 'em back a second time when they don't make the purchase the first time.
Now you'll argue that product training is important, and I agree. But product training is simply information, and too much of it at that. Knowing your product is a job requirement. How to use the information correctly with customers is a subject for training, but interpersonal selling skills - connecting to the people - is something people have to bring with them to the job. Forget about trying to train anyone to have a better personality.
Now, I challenge you to inventory your work and find that 20% of really highly productive things you do that produce big sales increases, and quit doing all the other things. Stop wasting your time on things that don't produce more sales, more success for your sales staff, more satisfied customers, and more money for everyone in your company.
(Posted 7/7/2009 by admin) |
You Probably Set Your Goals Too LowMany furniture retailers pay salespeople a commission on their sales as their primary compensation method. Many also assign performance goals based on the company's budgetary needs for revenue, then their sales managers work toward achieving these goals.
In virtually every consulting situation I've been involved in since 1993, when salespeople have been consulted and asked to set their own goals based on their needs for income and an improved quality of life for them and their families, those goals have been considerably higher than those set by the company. Wouldn't it make sense to work together with your salespeople to achieve THEIR goals instead of being satisfied as business owners when your employees goals are NOT met? If you can help them, coach them, and lead them to THEIR goals, your company goals will be achieved and exceeded.
This is one of those areas of business management where I believe many furniture store owners are disconnected from their employees' needs, and miss a powerful opportunity for sales revenue growth with no additional customers needed and no additional advertising dollars required. Just better individual performance.
To understand the magnitude of this issue to your store and to your people, begin with the following analysis:
Look at your individual sales performance statistics over the past six months. List your salespeople showing their number of customer opportunities in one column and their total written sales in another. Divide the sales dollars by the number of opportunities to get each individual's "performance index" or Revenue-per-Opportunity. Calculate what your sales volume MIGHT have been by multiplying your total number of opportunities by the HIGHEST performance index. The difference between your actual sales and these calculated sales is your potential growth from that total number of customer opportunities going forward.
To achieve this level of sales, connect to the goals of the people who do the work.
(Posted 6/30/2009 by admin) |
Your Thoughts are Causing Problems for MeThere is a reality that afects all our lives that many people are not aware of. It's simply this: Thoughts are Things. Thoughts are not limited to your mind, operating completely inside your head in some indefinable form - like an electrical impulse bouncing around inside your head with no external connection. Many writers have tried to explain this to us, most recently there is Rhonda Byrne and her little book "The Secret" and Esther and Jerry Hicks creators of the "Abraham-Hicks" programs. But first of all there was Napoleon Hill who, in 1937 published "Think and Grow Rich" after 25 years of research into successful people's lives and psychology. Hill did this at the suggestion of Andrew Carnegie, who refered to these concepts as "the secret few people know". Then there was another great old idea called by Norman Vincent Peale "The Power of Positive Thinking."
All these people were telling us the same thing; thoughts are real things, and they have a physical manifestation in the form of energy or vibration. Anyone who has seen Cesar Millan, The Dog Whisperer, on TV dealing with troubled dogs and solving their problems in minutes, knows his thinking that"energy" as a real thing that is physically transmitted between people, and between people and animals.
Staying positive in these times in our business is really hard, but know this: If you dwell on bad things, have negative thoughts and expectations, believe the worst will happen - that's what will happen, because the energy you generate attracts the same energy from the universe around you. That universe includes other people and their energy and negative or positive thoughts. If, on the other hand, you remain positive about the future, see good outcomes happening and work toward them, put your energy into feeling good instead of feeling bad, then things will work out better as your positive thoughts pick up on others like them in the universe.
As Henry Ford said "Whether you think you can or you can't, either way, you're right" - you make your own outcomes because your thoughts dictate the way you feel, and the way you feel dictates what you do, and what you DO causes your outcomes. Buy any of the books I've mentioned above and begin to train your mind to see great outcomes. My favorite is "Think and Grow Rich" because there are positive action plans in it to help you understand your past thinking and change your outcomes as I am changing mine.
(Posted 6/24/2009 by admin) |
Welcome to you all!You'll see a bunch of older blogs listed in the left pane plus a link to the blog archive for more. Please let me know what you think, and suggest things you'd like me to address here.
I've spent a lot of time working with store managers in all kinds of furniture stores. After 15 years of consulting and 20 years of retail management the lesson for me is this. Nothing changes in our business from one century to the next. The issues I dealt with in 1976 as a retail manager, then in 1993 on my earliest consulting assignments, and with my current are still in place today, 33 years later.
This particular issue is one of sales management focus. In smaller stores where there is not a lot of support help in place on site, managers tend to focus on doing things right, greasing the skids, so to speak, making everyting work, fixing mistakes, tagging merchandise, doing bookkeeping, filing reports, etc, etc, etc.
Changing sales managers'focus from doing things right,from sales order and store operations and administration, to doing the right things, improving sales performance of the individual salespeople, is like turning the Titanic around. It takes a long time, but it can be done and when it is, the results are always, always worth the effort. In a business like ours where every single dollar of revenue is generated by individual salespeople dealing with individual customers, we are in a situation where individual selling skills, iterpersonal skills (or not), and attention to detail, keep our company in business and our employees in work. So, attention to individual sales persormance is everything for sales managers. I'll write a lot about it here from now on.
(Posted 6/16/2009 by admin) |
Why sketching?I talked about changing your agenda from one of just selling to one of seeking first to understand, then to fill a need, solve a problem, and then make a sale. For decades now I've been teaching salespeople to use simple room sketching as a way of, 1) recording customer's answers to the requst to "tell me about the room" which is the best question you can ask a customer next to "can I write it up"? and 2) to connect to the people who are your customers.
When you want to develop trusting relationships with prospective customers (shoppers, making the conversation about them, and not about you, is a great way to begin. Think about it: humans think in pictures, not in words. The one picture the customer brings into your store in their heads is their room as it looks right now. To truly help them make the right choice and to avoid costly mistakes, you need to somehow see the picture in their heads. Sketching, while limited to two dimensions, is the best way to begin this process.
Sketching is as much for your customer as it is for you. The process makes them concentrate their thinking on the room issues, instead of just the product issues and helps them see you as a caring partner in developing room solutions.
So, sketching helps everyone - your customer and you to deal with the whole room questions.
You really should be doing a lot more sketching than you probably are.
(Posted 6/10/2009 by admin) |
Try Something New If you're a retail salesperson, try to think of your agenda with customers in a different way than you have in the past. Instead of having a "selling" agenda, make you first agenda upon greeting a new prospective customer as being "to understand" rather tahn to sell.
In his great book from the 1990's, Steven Covey told us that one of the Seven Habits of Highly Effective People is that they seek first to understand, then to be understood. This is, of course, a way of saying - make the engagement about your customer first, and not about your products - your "stuff". Don't be in too much of a hurry to begin showing people your furniture, because there is one very big thing youprobably don't know much about; the room the furniture is going into.
Your customer however knows everything about the room placing you at a distinct disadvantage wehn suggesting products to go into it. I believe, and research shows, that this is the number on reason that customers don't buy. It's not because of your products or prices or delivery or anythign to do with you or your company. It's because of their uncertainty about how to make a selection and about what the consequences will be on the fashion side of the issue around the room as a whole.
If you "seek first to understand", and you realize it's the room that's the issue, not the furniture you show, the whole greeting agenda changes. Ask more room related questions. Give up on the idea a "qualifying" your customer - that's ridiculous! Qualifying her for what? Think of simply understanding better, ask all the right questions and become a problem-solver instead of a salesperson. You'll sell far more in the end.
(Posted 5/30/2009 by admin) |
Has Your Close Ratio Gone Up?I guess the other side of that question is; Has your customer traffic gone down? What I'm asking is, are you taking actions to improve your sales performance metrics given that in general, traffic is down for all furntiure retailers?
In a previous blog, I suggested that retailers need to take more control at the point of contact with their prospective customers - that's shoppers until they buy something and become customers. I believe that retail managers, and in the lack of managers, owners, have to push day-to-day, minute-to-minute sales coaching right down the the point of interaction between their salespeople and their shoppers.
You've probably read in my writings and that of others that your business, OUR business, the retail furniture business, lives on be-backs - shoppers who return a second (or more) times on the same project. Let me make the distinction between what I define as be-backs, people working on a current purchase project, and what some people call "personal trade", or "return customers". These are people who have bought from you in the past and are returning on a new project. I think you should make this distinction as well for the reason that you have to carefully track your current shoppers who did not purchase the first time they shopped in your store for the thing or things they're considering buying.
If some of these shoppers are transactional shoppers, for whom price is the primary decision-making element and the merchandise is competitively shoppable, when you see them a second time, you have a 70% chance, on average, of closing the sale that day. This means your best people will close as many as 90%, while even your lowest performers will close around 60%. This shows clearly that the purpose of your initial contact has to be to make sure they come back a second time.
By leaving this up to chance, or to the customer's whims, you're not being aggressive enough around ensuring more of them come back. Follow up is only one of the elements most salespeople are poor at, but doing those special things during the initial contact is also a point of weakness today because all the old repetoire won't be effective in today's economic environment.
For owners and managers, you've got to move your office out onto the floor. Period. I don't care if you have a lot of administrative things to do back in your office. If you keep doing those things and stay out of the game on the floor, pretty soon you won't have to do them at all, because you'll have no company.
(Posted 3/21/2009 by admin) |
The Need to ChangeI keep pushing the idea of bringing change to furniture retailing, and I've gotten a lot head nods from clients and friends in the business. But, when I get to the details - like "change what?" things are a little more tricky. So to clarify, here's a simple list of what I think we all need do as furniture retailers:
1. Improve our customer's experiences by a factor of 10, or 100. We need to make their shopping eperiences better - more exciting and interesting from the moment they log on to your website to the moment they're greeted in your store, through the closing of the sale and final delivery.
2. Improve and enhance your customer retention programs with far better communications and more helpful, less self-serving messages. You are in the world of e-communications whether you like it or not, or know about how to use these tools. Get help and make customer retention your top priority - or someone else will get them from you, and retain them as theirs.
3.Take control of the point of contact with your customers. Don't leave your salespeople out there alone in times like this, because they deserve more support and help than they have needed in the past. Make sure you understand what kinds of experiences your customers are looking for and make this happen for them. Sales managers need to push coaching much farther down the line toward the customer than ever before. Show people how to do things with customers that your selling strategy calls for. And, take some planning time to be sure these are the right thigns to be doing.
4. Get your hands around your real sales metrics. Put in whatever systems there are to completely understand everything you can measure about your business. This is not the time to be winging it - or dealing with guesswork.
(Posted 3/8/2009 by admin) |
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