Retail Contrarian

Skepticism and Lost Opportunities

Have you ever walked into a store and seen something on sale at an unbelievable price?  If you're like most customers your first thought is, "Wow. This is great."  But then it's immediately followed by, "And I wonder what's wrong with it?"  Of course you're skeptical.  You've been told ever since you were a child that if something sounds too good to be true then it probably is. You might be so skeptical that you end up passing on a great deal.

Customers are naturally skeptical. It's a defensive mechanism to keep from being taken advantage of or making a mistake.  It can also keep customers from getting a great deal and doing business with a very good company.

Whether we know it or not, we lose sales to skepticism every day.  One of the biggest challenges for independent retailers is overcoming customer's skepticism of the independent's prices.  Most believe that an independent's prices are much higher than the big box or national chains even though that is not always the case.

Skepticism also impacts our ability to make sales.  When products are marked down customers often think there must be something wrong with them, or at the very least are something nobody else wanted - so why should they?  Customers are also skeptical of brands they've never heard of.  That's always one of the biggest challenges when you bring on a new line in a segment where brand recognition is a key part of the decision-making process. You wouldn't think twice about buying a Canon camera but you can't say the same for a Danon camera.

The key to overcoming a skeptical customer is to proactively give them the necessary information to keep them from being skeptical.  If an independent retailer prominently posts a sign telling shoppers about the price guarantee, the customer knows that this store is competitively priced, which may or may not be the case.

The same approach works with markdowns.  If you're giving the customer a great deal you need to tell them why.  A "50% Off Our Top Sellers" or "50% Off Spring Clearance" will always be more effective than just a "50%" sign by itself. When working one-on-one with a customer you should also explain why something is "such a good deal."

You might even be skeptical of this post, which of course proves my point.  From time to time everyone is skeptical, and you'll sell more products and capture more customers if you're aware of that and take steps to proactively overcome it.

Take Five Exercise*
Brainstorm three reasons a customer could be skeptical while shopping in your store. Determine ways you can proactively overcome it.

* The Take Five Exercise is a new feature to stimulate conversation in your morning Take Five or store meetings and make it easier to put the Retail Contrarian into action.

The Art of Greeting: Guest, Friend, and Customer

It's not hard to notice that so many store staffs rarely acknowledge customers until they make a purchase.  It's like you're invisible or unimportant until you decide to spend your money.

There are also store staffs that are clearly following a company policy of greeting every customer are as about as friendly as a dark alley at 3:00 a.m.  There's a quick acknowledgement and the obvious hope that you don't want to talk to them.

What is the right way to greet and engage customers?  Some people say you should do it within the first ten seconds a customer is in the store, others say within a minute, and clearly many retailers seem to think you should let the customer be the one to engage the employees.

First and foremost, it is extremely important to welcome each customer as he/she enters your store.  Not greet, welcome.  When you welcome customers you acknowledge that they are your priority; it is the first step in creating a great experience that will lead to a sale.

You want to engage your customer and treat them like an old (or new) friend. Inevitably, when I bring this up in a seminar or training I hear that "customers want to be left alone" or "they say they're just looking no matter what I say or do."

That's true.  Sometimes customers want to be left alone and sometimes they say they're just looking, but most of the time they do that because the salespeople aren't adding value to their experience. They're following a script, or doing something because they've been told to and not because they want to.  Customers know when a salesperson isn't being authentic.

Don't try to "help" your customer.  Don't get in his face and ask if he has any questions. Treat each and every customer like they're special.  Show them you're happy to see them in your store and that you're going to exceed their expectations.  Be an ambassador for your store.

If you welcome your customers and engage them like an old or new friend, more than 85% will respond in a positive manner (give or take a few percentage points based on where you live). So what if 15% of the people blow you off?  Don't look at it like 15% of your customers didn't let you get to know them, look at it like 85% of the people who came into your store are now your friends!  And friends help friends make purchases.

Once you have welcomed your customer, you can learn more about him/her and how the products you sell can add value to his/her life. The best customer experiences are when customers walk out with purchase they're happy they made.

That's why every single person who comes in your door should be welcomed like a guest, treated like a friend, and shown products so they become YOUR customer. That's what makes a specialty store like yours special.  Forget customer service, it's all about the experience!

Small Changes Create Impressive Results

My youngest daughter has many wonderful qualities but keeping a neat room is not one of them. In her defense she has the smallest room in the house, which is sometimes harder to maintain but we figure if she had a bigger room she would just end up with a bigger mess.

One day I decided to give her hand as we went in search of the carpet. I figured I would use the time to give her some fatherly advice on how she might better maintain her room. As we talked I saw that she was completely overwhelmed by the idea of keeping her room neat. I realized she was overwhelmed because she couldn't visualize how small changes in her behavior could lead to impressive results.

The same thing can happen to us. Not that we're not necessarily overwhelmed, except for maybe that pile of papers on the desk that desperately needs filing, but we often fail to see how small changes can result in some impressive results.

Let's take the case of a specialty store that averages about 200 people a day walking through the door. Currently the store converts 32 people a day into buyers, a conversion rate of 16%. The store's average sale is $85.  As a result, the store averages $2,720 a day in sales.

If our example store follows suggestions they read about in The Weekly Retail Experience and makes some small changes to the way they engage their customers they should be able to increase their conversion rate one percentage point, from 16% to 17%.  That 1% difference means the store converts 2 additional customers into buyers.  Assuming the average sale stays at $85, the store will sell an additional $61,500 a year in sales.  That 1% increase in conversion translates into a 6% increase in sales.  What retailer wouldn't take a 6% increase in sales?  

What if the team makes some changes to how well they recommend additional products and as a result is able to increase their daily units per transaction (UPT)?  As a result of this extra focus on the store's UPT, let's say the store increases their daily average sale (ADS) by just $5.  That sounds doable, doesn't it?  That $5 bump in the average daily sale will result in an additional $57,920 in annual sales, a healthy 5.9% increase.  Who wouldn't take that?

I'm sure you know what's coming next.  What if through small changes and some solid focus the store is able to do both? With just a 1% bump in conversion and a $5 increase in the average daily sale, this one store could increase annual sales by $123,080.  That comes out to a 12.5% increase in annual sales as a result of increasing conversion and average daily sale.  Any store would take that!  And if this was one store in a one hundred store chain, all of them making these same small changes, the company would be looking at more than $12,000,000 dollars in additional revenue.  Sweet!

I'm sure someone is thinking, "Sounds good, Doug, but how practical are those small changes?"  I say they are not only extremely practical but achievable.  If it is the last day of the month and you're pushing to beat goal, do your conversion and ADS go up?  If there is a sales contest and you're trying hard to win, do your conversion and ADS go up? 

Imagine what would happen if you did those same things you do on that last day of the month or during the sales contest every single day with every single customer?  I can imagine it.   The result of an increase in your conversion and ADS will probably be a double-digit sales increase.

Is it possible? Is it achievable? The only people who can make that decision are you and your store team.  Small changes will create impressive results if you actually take action.

Believe me, if I could eventually see Jane's floor, you can make a difference in your business.

The Butcher Rule Revisited

For years now we have focused our clients on training their staffs to recommend the best product that meets a customer's needs.  As simple as that sounds, most retail salespeople show the least expensive product first every time, whatever the customer says he/she is looking for.   In our Customer FIRST sales and experience approach we call this the Butcher Rule.

We named it the Butcher Rule after noticing how well the butchers at my local Whole Foods recommend the best product first.  Think about it.  When was the last time you walked up to a butcher counter, asked for a recommendation and heard, "the ground turkey is great today."  Instead, you hear about the filet mignon or prime rib.  Of course if a customer is looking for chicken the butcher won't suggest a filet since that won't meet his/her needs, but she might suggest the free-range boneless breast chicken over the wings on special that week.

Does the Butcher Rule still make sense in a changing economy?  Could the Butcher Rule lose sales because we're showing customers the most expensive products?  My answer is yes and no.

Yes, it still makes sense to show the customer the best product that meets their needs. We're doing the customer a disservice if we don't. The key to the Butcher Rule is we're not suggesting products without having some information from the customer.

Let's say a store sells grills that range in price from $200 to $2,500.  After interviewing her customer the salesperson knows that he owned a Weber for ten years, that he wants a gas grill, and that he mostly cooks just for the family.  The customer's exact words were, "I don't need anything fancy."

Based on what the customer told the salesperson she is going to suggest three different grills. One is a mid-level grill and sells for $750, another is a step down and sells for $500, and there is always the entry price point grill of $250.

Using the Butcher Rule the salesperson might say, "I have several grills I believe are just right for you."  She will first suggest the $750 grill.  Based on the customer's reaction and response she may or may not move to the $500 grill and then on to the $250 grill.

Because of this economy some salespeople are starting with the $250 grill. That's crazy. First of all, it's not up to us to determine what our customers can and will spend.  It's our job to suggest products based on what the customer tells us.  Second of all, it will cost a store a huge amount of sales if they only recommend the least expensive products.

Are people still buying those $2,500 grills?   Absolutely.  Are some people trying to get another year out of their old grill instead of buying a new one? Absolutely.  Are some people trading down? Absolutely.  But it doesn't matter what "people" are doing.  What matters is what the customer you're working with needs, wants, and is willing to buy. They deserve to be shown the best product that meets their needs.  Period.

So yes, the Butcher Rule is still valid in this economy.  You could even make a case that it's more important than ever since people want to get the most value for their money.

So let me ask, are you and every employee in your store still applying the Butcher Rule?

- Doug Fleener and Matt Norcia

Beyond the Butcher Rule
Let us bring our Customer FIRST retail approach to your company or stores. Our proven approach will help your staff to maximize their customer opportunities and grow their sales. We offer ½ and 1-day seminars, as well as a train-the-trainer approach. Give Doug a call at 866-535-6331 to discuss the best solution for your company.

From Stranger to Superhero to Friend

While wandering in and out of stores in New Orleans last week I became aware of the strikingly different attitudes retail employees present to customers.  In just one hour I was treated so differently I started to develop a personality complex.

Some retail associates treated me like a complete stranger, doing every thing possible to avoid eye contact.  It was almost like we were meeting in some dark alley, not a well-lit mall surrounded by people.  At least when our eyes did (accidentally) meet they smiled and then went about their business.  I followed their lead, left their store and went about my business, too.

Other store employees treated me like a superhero - if the superhero was Invisible Man.  I'm not complaining because at least they weren't avoiding me and I could see they were extremely busy.  Busy playing solitaire, updating Facebook or checking phone messages.  I didn't want to interrupt them so I disappeared from the store, which is easy to do when you're Invisible Man.

I'm happy to say that some associates treated me like a visitor.  They acknowledged me when I walked in to the store and politely offered their assistance if I needed any.  I appreciated their attention but because I didn't need anything I didn't buy anything.  It was a nice visit, though.

In two stores it was much different.  I wasn't a stranger, I wasn't Invisible Man, and I wasn't a visitor. Instead, I was a new friend.  In both of these stores I felt like those salespeople were glad to see me. They were happy, smiling, and inquisitive. As friends do, they asked where I had been, where I was from, and if I was enjoying New Orleans.  Never once did they ask to help me.

One woman was so friendly she wanted to know if I was visiting with family or not. When I told her that I was traveling alone, on business, she inquired about my children. And being such a good friend, she pointed out some nice Mardi Gras beads she thought my children would like.  I have no idea how she knew my daughter's favorite colors are red and blue, but then again she was my new friend.

She was also kind enough to sell me some of those famous New Orleans pralines, and she suggested a couple of other things that I declined since I didn't have much room in my luggage. While it was only about a $15 sale, it was a sale that my new friend created. And if she treated every customer like a new friend I can't imagine how much those $15 sales added up to.

I'm sure you don't treat your customers like a stranger or Invisible Man/Woman.  So let me ask, do you treat your customers like a visitor or a new friend?  I can personally vouch for the effectiveness of making friends.

Every Customer a Sale

There are multiple definitions of the word "sell."  In our Daily and Weekly newsletters we usually focus on the transfer of goods and services in exchange for money and to persuade or induce someone to buy something.  Another definition of sell is also important to our success and that is to cause or persuade to accept; convince.

Good retail associates sell much more than just products.  They sell their customers on talking to them, they sell them on trying something out or on, and they even sell them on coming back.  Some associates don't sell at all; they just hope, ask, or wait for the customer to decide to do something themselves.

For some reason, many retail associates have a negative view of selling.  They equate "selling" with being pushy and obnoxious.  Naturally, being pushy and obnoxious is not going to work.  Selling means, as it says in the definition, to "convince" or "persuade." The best associates do that by smiling, by taking a genuine interest in their customers, by being passionate about the products they sell, and by believing that the most satisfied customers are those that make a purchase.

So let me ask:

Do you persuade (sell) customers to engage in conversation with you or do you just hope they'll start talking to you?

Do you convince (sell) customers to try out a product or try something on, or do you wait for the customer to do it him/herself?

Do you persuade (sell) customers on the value of sharing their contact information, or do you just ask for it?

Do you influence (sell) customers on coming back for a future visit, or do you just hope they do?

Do you induce (sell) a customer to have their friends and family come visit your store, or do you just hope they'll put in a good word for you?

Do you persuade (sell) your customers into buying products they like and are right for them, or do you just show them something and hope they decide to buy it?

Selling requires action.  The exact actions depend on the relationship between you and your customer.  "Hope" and "wish" are feelings, not actions.

Actions create happy customers.  Actions create sales.  Are you selling every customer?

The Competitive Advantage of Being an Opportunist

op·por·tun·ist     (ŏp'ər-tōō'nĭst, -tyōō'-)  
n.   One who takes advantage of any opportunity to achieve an end.

Last week I was talking with a retailer about the importance of optimism, especially these days. I loved her comment, "I'm both an optimistic and an opportunist."  I have to say I don't think I've ever before heard anyone describe herself that way.

She explained that her father used to say that one of the keys to success is to never miss an opportunity when one is presented to you.  She said that it was her father's belief that people encounter many more opportunities than they realize.  As a result, they miss out on many.  So this woman has lived her entire life looking for opportunities every single day.  I don't know about you but I find this incredibly powerful.

It reminded me of a salesman who worked for me at The Sharper Image.  I like to joke that Jeff was the most annoying man in retail but boy, could he sell. Now that I think about it, what made Jeff so successful is that he was an opportunist.  He saw opportunities no one else on the staff did.

He was the kind of person who would ask questions and show products to a customer who came in asking us to make change for the parking meter.  When other salespeople might be annoyed at being asked to make change by someone who clearly didn't plan to make a purchase, Jeff saw an opportunity to engage the person and attempt to make a sale.  To tell the truth he was rarely successful in making a sale to the person asking for change but it's that opportunistic mindset that made him our top salesman almost every month.

Jeff is the only person I've ever known who tried to sell the UPS guy something every day.  We always told Jeff to back off but of course when the UPS driver finally did make a purchase it's not hard to guess who made the sale.  Jeff.

Are you looking for the opportunities in your day or could you missing one or two as so many people do?  Think about it.  Every day there are coaching opportunities, selling opportunities, new product opportunities, learning opportunities, and for you single readers there might even be romantic opportunities!

Here's a challenge I'll throw out to you today. I'd like you to find one or two opportunities today that can improve your business, your staff, or most of all.. . . . .you!

In these times being both an optimist and an opportunist will be an incredible competitive advantage.

Six Ways to Overcome "I'm Only Buying What's on Sale"

Contrary to what's taking place in retail today, you can't give products away and stay in business. We have to make sales AND profits.

But some might protest that right now customers are only buying items that are on sale and if they can't buy something on sale they won't make the purchase.  I don't agree.  I think a number of customers do come into a store with the intent to only buy items that are on sale. Intent!  A great experience and a well-trained staff can overcome that need for a sale price.

Here are six actions you can take with your next customer to move past their intent to only buy products on sale and have them leave thrilled about their full price purchase.

1. Deliver an engaging and enthusiastic welcome.  I firmly believe that the first thirty seconds makes or breaks most sales. A welcome is especially important when other retailers are cutting back on floor staff and the remaining employees are not feeling too thrilled about the atmosphere.  Big smiles and big welcomes really do overcome "sale price only" intent.

2. Be the best experience your customer will have today.  Most retailers have to do sales because they are in the business of transactions. I'm positive that if you make sure that every customer who walks through your door has the best experience he/she will get in the entire day, price becomes secondary.  As a matter of the third annual Customer Experience Impact Report from Harris Interactive found that 58 percent of U.S. consumers said that in a down economy, they will "always" or "often" pay more for a better customer experience.

3. Assume every customer is a buying customer.  Let them prove you wrong or even better, let them prove you right.  Treating every customer as a buyer increases the likelihood of making a non-sale sale.

4. Engage with purpose. Find the reason the customer has an interest in your store.  As I tell my speaking audiences, I don't walk into sewing machine stores but I do walk into sporting goods stores.  Learn who your customer is and why they're in your store.

5. Focus on the personal values of the customer, not price.  Think about your own shopping.  Is it more important to you to find a product you love or a great sale price? Of course we all love to get both, but most people would rather find the right product at a fair price than compromise on the product at a great price.

While your competitors are only telling the customer what's on sale, you should be learning what's important to your customer besides price.  Whether it is fashion, convenience, quality, ease of use, or whatever, focusing on your customers' values before price will increase your odds of making a sale.  When people want something price almost always becomes secondary.

6. Give the customer an opportunity to make the purchase.  It's as simple as asking the customer to buy it. The more bad economic news there is, the less likely your competitors will ask for the sale. Do you?

So let me ask, are you ready to be successful, sale price or not?

It's a Black Friday MO Weekend

It's hard to believe but here we are at Black Friday Weekend. Let's make it a good one.  No wait, let's make it a great way! That won't happen by itself; you need to create your success so you have MOmentum going into the holiday.

You can do that if you make more Multi-unit transactions and create sales Opportunities.

So this weekend, the focus is making more MO.  Everyone needs to beMOtivated and ready to bring in lots of MOney by making MO.

It's all about the MO! Here are some tips to making MOre sales:

1. Assume you'll make MOre Multi-unit sales this weekend:

Assume the customer wants to keep looking at products. Do not ask your customer if she wants to see additional items.  If you know why she is buying the first product (and if you don't you haven't done your job well) it's only natural - not to mention good service - to show more products.

Use assumptive language. Instead of saying, "You might want to consider this" say "You'll want to get this, too."

Don't assume your customer is done shopping.  Let the customer bring closure to the sale; your job is to keep showing and suggesting until he's done. If you ask that tired and overused line, "Will there by anything else?" customers will say no 98% of the time because that's what they are trained to do.

Assume she has more people to shop for, so ask every customer who else is on her holiday shopping list.

2. How are a few simple but MOmentous actions you can take to create sales opportunities this weekend.

Engage every customer who walks in the door. Don't greet them, engage them in conversation to learn something about them. Then use that information to move them to products.

Give the customer a reason to buy TODAY. Only make a future sale if you can't make one today.  More retailers lose sales than make them this weekend.

Deliver an awesome experience! There are two kinds of stores that will have a good Black Friday Weekend.

1. The stores that have unbelievable-remarkably-low-you-have-to-buy-it-now weekend specials.

2. The stores that deliver to their customers an unbelievable, remarkable store experience with a staff that makes the customer feel special.

So get your MO on and deliver an unbelievable, remarkable store experience and you might just have a MOnster weekend!

Good luck!

Doug Fleener

Bonus: Download your MO Weekend sign to MOtivate throughout the weekend.

Don't Quit Before the Payoff

After unsubscribing to the Daily Retail Quote newsletter, a (now former) reader commented, "I'm not that impressed with your quotes."  When I looked at her history I discovered that she had been a subscriber for three whole days.  I don't understand why someone would quit after trying it for only a few days, especially since it doesn't cost a dime to receive it.

I'm equally puzzled when I see businesspeople do the same thing in their stores.  A few years ago I was working with a store on increasing their average sale and units per transaction.  My agenda for this particular day was to show the staff how to suggest additional products before taking customers to the register to ring up the sale.

One employee was clearly not enthused about this initiative. With her first customer, she asked if he wanted to see anything else. He said, "no thanks."  With her second customer she suggested something to him at the counter and of course he said, "no thanks."  She asked her third customer on the floor.  The customer politely declined since she was in a hurry.  The employee came to me and said, "See. It doesn't work."

After a little "coaching" from the owner who reminded her that it really takes very little time and effort to suggest additional products to the customer, she soldiered on.  And sure enough, the fourth customer politely declined to look at anything since he was in a hurry. But then her luck turned around and she was successful with her next three customers. She ended up enhancing the purchases (some of you call it add-ons) of over 40% of her customers that day, increased her average sale by over 20%, and almost tripled her UPTs. And to think, she wanted to quit after three customers.

As a friend of mine says, "Don't quit before the payoff happens," especially if it doesn't cost you anything to try.