Retail Contrarian

Updating the referral bonus

We all know that finding and retaining great people is a vital element for any experience-based store or company.  What might not be as obvious is how much harder it is to work and succeed in our stores.  It's a heck of a lot harder to engage than clerk, or to maximize a sales opportunity instead of transact it.

Who better to help us find the people who can do this than the people who are already doing it?  True, most retailers have some type of current employee referral program, but most of them are ineffective.  How do you make them more effective?  Here are some things to consider.

1. Substantially increase the amount of your referral bonus.  Make the payout such a WOW amount that most of your employees are always recruiting.  Forget $100 or $250 payouts...go BIG!

Here's an idea. What if you paid a $1,000, $1,500, or higher referral bonus for every new sales associate?  Before you hit send on the email telling me I'm crazy, think about the cost of an open position or high turnover.  And how much more can a really good employee sell versus an average one?  This program will easily pay for itself.

2. Change the way you pay out.  Most companies only pay a bonus after the new employee makes it past their probationary period.  I think employees need more instant gratification.

With a $1,000 bonus, I would pay the employee who made the referral $250 on the referred employee's first day.  I would pay another $250 if the new hire is still there after 90 days.

Here's the big change I would make.  If the referred employee is still with the company after one year, the referring employee gets a $500 bonus!  That is motivation to not only find good people, but to help them be successful in their job.

3. Keep championing your program.  It's vital that your referral program remains front and center to your team.  It takes more than a poster or annual announcement to keep the program viable.  The key is to publicize every payout.  Make it a big deal...because it is.  

Here's a twist on finding and creating a great team. 

4. Pay managers to develop new managers. This is a concept Chipotle uses. They pay a developmental bonus of $10,000 for managers who bring an employee up through the ranks into management. The manager gets $5,000 when the person gets promoted, and another $5,000 after the employee has been in the position for six months.

Check out the result. This focus on developing staff and promoting from within has had a significant impact on Chipotle's turnover at the management level.  For salaried managers, turnover dropped from 52% to 35%, and entry-level hourly managers went from 111% to 47%!  Sounds like that bonus is also paying for itself.

So let me ask, are you leveraging your staff to help you find and retain great people?

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Doug Fleener is a proven retail and customer experience expert that helps companies dramatically improve their customer experience and their results. Visit our website or call Doug at 866-535-6331 to discuss how he can help you create an extraordinary experience and results.

Are you an And or a But leader?

One of the points I teach in our Extraordinary Coaching program is that leaders often inadvertently mitigate the praise they give their staff.  It usually happens by linking criticism (which we call instructive feedback) to the praise with the word "but."

"Nice job on the sale, but you should have showed him the matching widget."

"That was a great event, but you came in over budget."

"Those products were a great buy, but we need to make more margin."

I like to tell people to keep their "but" out of their feedback and use the word "and" instead. 

Look at how the praise remains positive when "and" is used instead of "but."

"Nice job on the sale, and next time show him the matching widget."

"That was a great event, and hopefully we can make the budget work."

"Those products were a great buy, and going forward we need to get the margin up."

I've also come to see how some leaders demotivate people with "but" even when it isn't linked to praise.  More often than not it's the result of the leader redirecting the conversation because of a different perspective.

Here's an example of what could take place on a district conference call:

Store manager: "We had a strong weekend and finished the week at 110% of goal."

District manager: "Yes, but your ADS was down over $10."

In this example I doubt the DM is even aware the impact her "but" had.  Here's a manager who is justifiably proud of her results, but the DM is looking at the possibility of missed opportunities with average daily sale being down.

I've also met and worked with many "But" leaders who constantly do this with his/her staff.  If it is a pattern, it's usually because of some need to be right, or maybe his/her glass is always half-empty.  Whatever the reason, the result is demotivated people.

Again, most leaders mistakenly use "but" to redirect, and just like praise all they need to do is replace "but" with "and."

Store manager: "We had a strong weekend and finished the week at 110% of goal."

District manager: "Great, and maybe we could look at why your ADS was down over $10."

Again, compare these two:

Employee: "It wasn't easy but I finally got her to buy two of the widgets."

Manager: "But why didn't she buy a third widget?"

Now compare the subtle but important difference using "and"

Manager: "And why didn't she buy a third widget?"

Here's my challenge for you.  For the next few days listen to how often you use the word "but" with your staff when the word "and" might have been more effective. 

If you discover you're more of a But person than you knew, you can begin to get your "but" out of the conversations with your team and start on your way to becoming an And leader.

By the way, the same approach works for parenting.

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Doug Fleener is a proven retail and customer experience expert that helps companies dramatically improve their customer experience and their results. Visit our website or call Doug at 866-535-6331 to discuss how he can help you create extraordinary results.

Don't ask permission

I have a question: Is your customer's experience better when someone on your staff is involved in their experience than when you're not? 

Of course it is. You and your team have the knowledge, experience, and information that benefit your customer. You can help them find the right products(s) that meet their needs and wants.

If they're in a hurry, you can get them out the door faster. If they're not, you make their shopping experience much more enjoyable.

So if we add value to the customer's experience, why do we ask permission? Shouldn't we just do it?

We ask for permission more often than we know.

"How may help you?" That's asking permission.

"What can I help you find?" That's adding value.

 

"Can I answer any questions?" That's asking permission.

"That's a very popular widget." That's adding value.

 

"Would you like help carrying your purchase out?" That's asking permission.

"Let me get someone to carry your purchase to your car." That's adding value.

 

"Would like to see the matching wallet?" That's asking permission.

"Here's the wallet that goes with that bag." That's adding value.

 

That's why we don't ask for permission.

Even if a customer says "no" to our offer, we've at least demonstrated that we add value to his/her experience. That's something many of our competitors never do.

The same holds true for exceeding your customer's expectations. Don't ask for permission.

 

"Can I get you a bottle of water?" That's asking permission.

"Here's a drink for you to enjoy while shopping." That's exceeding the customer's expectations.

 

"I can call the other store to see if they have them in stock." That's asking permission.

"I'll call the other store to see if they have them in stock." That's exceeding your customer's expectations.

 

"I can call you a few week's before your wife's birthday." That's asking permission.

"Hello, Mr. Jones. I'm calling to see if I can help you pick out a couple of gifts for your wife's birthday." That's exceeding a customer's expectations.

 

Even if your customer declines your offer, you have still demonstrated your point of differentiation and your desire to WOW them. That's what makes you special.

So let me ask, are you asking for permission to deliver an extraordinary customer experience? 

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Doug Fleener is a proven retail and customer experience expert that helps companies dramatically improve their customer experience and their results. Visit our website or call Doug at 866-535-6331 to discuss how he can help you create extraordinary results.

Your 2012 resolutions

I know how busy for the last few weeks, so I've taken the liberty of putting together some potential resolutions for you and your team in 2012.

This is a fairly extensive list, and you're probably already very good at most of these things. Even so, there might be one or two areas where improvement will have a positive impact on your business.

If you will, let me know which of these are right for you, and tell me about any of your resolutions that I've missed.

1. Taking your customer experience to the next level. Your store/company's customer experience is good, but deep down you know it could be so much better.  

2. Improve your staff's sales abilities. Your staff is really nice and delivers a very good customer experience. Now you aim to translate that to higher conversion and average sales.

3. Better clienteling. As online sales continue to grow and outpace traditional retail, in some segments the personal relationship between the customers and staff will become vital to keeping and maximizing customers.

4. More relevant marketing. The good news is you've got your Facebook page up and you're posting on a fairly regular basis. The bad news is you have no idea the impact it's having on your business. That probably means it isn't having much.

5. Increase accountability within your store/company. This could be in all sorts of different areas. Maybe it's expecting more from your frontline employees. It might also be holding managers and district managers more accountable for each store's sales performance.

6. Move the underperformers up or out. If you're tired of talking about the same underperformers over and over, maybe 2012 is when you finally improve their performance or promote them to customer. Yes, this goes hand in hand with #5.

7. Challenge and grow your top performers. The worst thing you can do is to not continue to develop your top people. It might be time to either create a new program for high-potential employees or, at the very least, figure out a way to better leverage their talents.

8. Invest more time and focus on developing your people. Unless you're competing on price you're probably competing with your people and the service/experience they deliver. Are you spending the appropriate time and energy on them?

9. Be more comfortable giving people the direct feedback they need to be successful. One of the managers I work with recently said to me, "I can't believe I coach without thinking about it! It feels natural now to give feedback at anytime, to anyone, and not worry about how it will be taken. We all "get it" that it is just information we need to get the results we want!" That's how we all need to think.

10. Improve your hiring process. This could be interpreted to be about improving the quality of the people you hire, but I don't want anyone to think that you haven't hired good people. You just need to get better at your process so you can do that more consistently. 

11. Standardize your training and development. Chances are you and your stores/staff are good at training new people. The challenge is that no two new hire trainings are the same.

12. Work more strategically. Some people say you should work smarter but not harder. I think if you've survived the economy we've had for the last few years you're pretty smart. A lot of people they just need to work from a better-defined plan and then work the plan. 

13. Delegate more. I hesitated about putting this on the list since most of the time delegation isn't the real issue. It's usually either that people can't give up control or they don't have the quality of staff to delegate to. Whatever the reason, you probably need to do less.

14. Become a better merchant. Whether it's buying, visual presentation, or financial management, you know that if you improve in this area you'll see an improvement to the top and bottom lines. Frankly, I put this at the bottom of the list since I know that most of you I know are stronger at these things that the above items. But hey, they're your resolutions.

15. Be more action oriented. Your list of things you were going to do or wanted to do is probably longer than what you did. Don't feel bad, that's true for most of us. But did you do what you know you needed to do to be more successful? The road to mediocrity is paved with good intentions.

So let me ask, what will your resolution be for 2012?

 

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Doug Fleener is a proven retail and customer experience expert that helps companies dramatically improve their customer experience and their results. Visit our website or call Doug at 866-535-6331 to discuss how he can help you create extraordinary results.