It’s time to step it up and quit making excuses about the economy, the state of the industry, the building bust, etc. or you may find yourself stepping aside! I say this with the highest degree of respect for the industry and the people within it. Further, I am writing this article because I believe in the independent retailer and the small businessperson of this country and want to pass along knowledge to help them not only survive, but to thrive.
I am amazed at how few jewelry retailers realize that they don’t know what they don’t know. It is even more baffling that store owners and managers aren’t pro-actively trying to seek the knowledge and education that they lack. For example: How many of you can name the last ten books that they read on salesmanship, customer service, leadership, etc.? I ask this question at every seminar I conduct. Less than 10% can name the last book, much less the last ten books.
With the economy as it is and sales being tougher and tougher to make, I would think every retailer would want to take a few minutes out of their busy day to learn something new. If you learn one thing, it might be the difference between a great year, an average year, and one that leaves you wondering if you will survive. Here are a couple of known facts:
As long as there is another jewelry retailer in your area, there is an opportunity for a sales increase!
If you keep doing what you have always been doing you will achieve the same result!
There are jewelry retailers out there that are having their best years ever!
Most jewelry stores are doing half of what they could be doing if they would just adhere to the five elements of productivity improvement.
I have a challenge for Jewelry Retailers – If you can answer the following three questions correctly then you need not read any further. If you can’t answer all the questions, you need to do yourself a favor and seek the knowledge and education that you and your sales staff desperately need. The answers will be at the end of the article and no cheating!
1) There are three ways a salesperson can increase sales in a retail jewelry store - what are they?
2) Most businesses fail because they are managed based on something other than _____!
3) If sales are down, there is one of three things or a combination of three things, that could be causing the decrease in sales. What are the three things?
Recently I had the pleasure of spending three weeks in a retail store as the sales manager. Running the sales floor took me back to my roots of the good old days when I was a sales manager working every day on a retail sales floor. Not much has changed. Customers still say, “I’m just looking,” “I’ll be back,” and “This is the first place I’ve shopped.” Salespeople still say, “Will that be all,” “Here’s my card, when you are ready come on back,” etc. etc. Customers have habits they have fallen into just as salespeople use bad selling habits on occasion. During this three-week period, we did about $35,000 (average week) in sales the first week, the second week we did over $70,000 (double an average week) in sales and the third week we did over $120,000 (a bit more than three plus times an average week) in sales. The reason I mention this is to point out – there is nothing better than ON THE FLOOR COACHING AND TRAINING. You cannot learn to ride a bike, ski, drive, or fly an airplane by watching a DVD, reading a book, or seeing somebody else do it. This is true in the field of sales. It is the practical, continuous, application of proper sales techniques as well as using role-playing and in live situations. This is where the real training, retention, and application of the knowledge is accomplished.
The store owner, sales manager, store manager, sales trainer, floor manager – whatever title you give to the position – can have a dramatic effect on sales and profits. This position is the single most important position in the store when it comes to proactively creating sales and profits. Without a strong leader, people tend to revert to their safe zone or level of competency or incompetence depending upon how you look at it. In sports, it is proven every day, that the coaching makes all the difference between a championship season and an average season. The exact same thing is true in a retail jewelry store – coaching on the floor will make the difference between a store growing and flourishing and one that is just getting by.
I know that most retail jewelry stores are still closing about 20% of the people that come in. Most retail stores are still averaging about 5% in add-on sales; most retail stores do about half of the business that they could be doing, without making any changes other than improving the skills of the sales staff. Most retail salespeople sit back and wait for customers to come in, when they could be doing some things to create traffic in the store. Most retail stores have no Turnover Program, or one that is weak at best. Most retail salespeople don’t know what to do when a customer says, “I’ll be back.” Most retail sales people don’t know the easiest way to add-on to a sale or to bump it up. Most retail salespeople don’t ask their customers for referrals. In other words – There is a huge sales increase available in most retail stores.
As a business, if you keep doing the same things that you did previously – why would you expect different results? I have heard some retail organizations that say 30% of all the independent retail stores will be out of business in the next five years. Many of the chain stores aren’t doing much better. If this doesn’t scare the heck out of you, I don’t know what will.
There is no doubt in my mind that the answer lies in the people that we have serving our customers. We, as an industry, have to put more and more emphasis on training, knowledge, positive reinforcement, on the floor coaching, incentives, and giving our people the HELP that they need in order to maximize every potential selling opportunity. Further, we need our salespeople to create selling opportunities and look at their positions more as business owners running their own business within the business. The store owner and/or sales manager is the person that will make the biggest difference. When he/she is active on the sales floor, interacting with the sales staff and customers, we are on our way to positive results. I have seen struggling stores bring in a new manager, and the store explodes in sales. If the manager is a person that only makes the schedule, answers discounting questions, is responsible for making the daily deposit, helping only their customers, answering special order questions, then the store is in trouble.
The sales managers’ job is to: Provide the leadership, knowledge, training, incentives, consequences, positive reinforcement, critique, and feedback in order to recruit, hire, develop, and maintain a successful sales staff. Anything short of this is unacceptable if the organization is going to grow.
I recently heard an advertising guru say that retailers need to cut back on their staffs because traffic may drop as much as 25% in the coming year. I say – Don’t cut your staff – cut the unproductive staff and increase your staff with productive sales driven individuals that will produce results –- and give them the leadership that they need to be successful. An effective sales manager/trainer will make all the difference in the world. Nobody ever accepts a job wanting to fail. Something is causing them to not be successful. Usually it is the lack of training and coaching they are getting on the sales floor. The sales floor proves to be where all the action is, and your training needs to address this critical area. If you are not one as the owner, or do not have a proactive sales manager/trainer you need to hire or develop one from within.
Here are the answers to the questions posed.
Three ways a salesperson can increase sales. 1 - Get more people to come in. There are at least 6 ways a salesperson can increase store traffic.
2 - Sell more of the people that are coming in through increasing your closing ratio. Understanding why people don’t buy is just as important as why they do buy. Through increased knowledge and training a salesperson can increase their closing ratio.
3 - Sell more to the people that you are already selling through add-ons and bumping up the sale. The easiest way to sell add-ons is to get the customer to tell you what they will be buying next, through asking good solid add-on questions. In order to bump up a sale, sales people have to increase the perceived value that people have in purchasing jewelry.
Most businesses fail because they are managed based on opinions rather than facts and statistics. Without statistics a manger can only guess why sales are up or down. Just knowing your traffic, closing ratio and average sale will tell you where you need to put your focus, time, energy and money.
If sales are down, there is one of three things, or a combination of three things that could be causing the decrease in sales. What are they?
Decreased traffic, decrease in closing ratio, and/or a decrease in average sale. If traffic has decreased, work on your advertising and marketing. If closing rate has decreased, you need to focus your time, energy and money on sales training. If the average sale has decreased, you need to get more people in spending less, work on add-ons and bumping up sales.
Here are the 5 elements to productivity improvement that I mentioned earlier.
1) Training and Coaching
3) Goals and Objectives
4) Non-Negotiable Sales, Customer Service and Operational Standards
5) A formal training process in the areas of Sales, Customer Service, Product Knowledge and Operations.
Only through knowledge and education can we pull the industry out of this mediocrity. Be the expert that you have always hoped to be and that your customers expect you to be.