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Welcome to the Business Insights Newsletter

How to capitalise on your most valuable asset – your sales assistants

October 10th, 2012

Category: Customer Relationship Management, Point Of Sale Systems, Retail Business News, Retail Business Tips, Retail Selling

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Customer Service consistently under par in Australia

Recent posts across general and industry media mention the tough retailing environment. Some in the industry have asserted this is mainly due to competition from online retailers and global heavy hitters opening stores locally. However, a new survey from consumer advocate group Choice and published by SMH, paints a different picture. It lays the blame squarely on Australian retailers’ lack of customer service, with Harvey Norman scoring the lowest mark. While Gerry Harvey has hit back claiming the Choice survey is flawed, their research is supported by a recent international survey by American Express that reported “Australians are among the unhappiest customers in the world”… and, “has found that “40 per cent of Australians feel that businesses fail to meet their expectations.”

Quality service usually means well paid, highly trained and motivated staff

To illustrate how quality service is tied to how well you treat sales staff, you only need to see what’s happening overseas as reported by The New Yorker which published a piece in March detailing how Japanese Fashion Giant, Uniglo, (among other big name retailers like Costco), spend more money hiring more shop floor staff, pay them more and they also invest strongly in staff training. This has delivered fantastic returns in the form of superior customer service and higher sales. What the New Yorker notes is that while “these companies have much higher labour costs than their competitors… they are more profitable than most of their competitors and have more sales per employee and per square foot.” This example bucks against the view in Australia that retailers’ profitability is hampered by high wages.

Quality service is directly tied to increased consumer spending

Interestingly, a recent Inside Retail post has a local retail commentator pronounce that “the most powerful weapon we have in our arsenal is the quality of our people and the lengths they will go to ensure customer satisfaction and loyalty.” Quality of staff however isn’t a popular topic in the industry with more focus given to complaining about the negative impact of online and overseas competitors; arguing about abolishing the GST-free low value threshold or calling for penalty rates to be scrapped.

One positive takeaway from the American Express Global Customer Service Barometer showed “that Australians would happily spend, on average, an extra 12 per cent if it meant they received better service.” Given the consistently poor customer service results of the last few years, this is a call-to-action to improve service levels as a priority.

Low service standards usually means wrong cultural fit, poorly trained and unmotivated staff

You can’t improve service levels if you don’t have the right people working for you. If you’re getting ready to employ staff, you should carefully screen them for cultural and attitudinal fit. It’s much harder to ‘mould’ people to fit into your culture once they’re employed. Even candidates with a successful sales track record may not be a good fit if their attitude jars with your brand and audience. For example, your product and brand may require staff that exude an edgy, upbeat attitude, or conversely you may need a type of personality that projects maturity, authority and a measured approach.

Perhaps current staff are a good cultural fit but sales results are still mediocre. You need to investigate the reasons why? Some of the specifics in the Choice survey regarding poor service levels were lack of product knowledge and lack of customer engagement with Harvey Norman also accused of using ‘pushy sales tactics’. Some of these may be issues in your retail operation. This is where investment in training both in product features and the right sales techniques is crucial. Well trained and motivated staff translates to more and bigger sales that are also based on ‘value’. This greatly improves sales/customer loyalty and minimises heavy discounting and competing on price.

Utilise automated ‘tools’ to help you improve staff performance and service levels

Successful retailers thrive because they use all the resources available to measure business performance. Most will analyse transactional data to track staff performance. Automated features in sophisticated business systems like CONTROL can indicate gaps and weaknesses in staff training, motivation and sales practices.  This is a godsend because as a multi-store operator it can be difficult to manually keep track of sales people’s performance.

To that end, if you have a retail management system or you’re currently assessing one, reporting features that are invaluable to help monitor, mentor, motivate and reward staff, include:

  • Sales by department by employee: Let’s say you’re a consumer electronics retailer and you’ve recently employed new staff. Sales by department by employee allow you to monitor effectiveness of training during induction process and then periodically. This type of report will also let you see which employee is good selling in a certain department but is weak in others. For example, sales may be high for laptops but very low for cameras. This insight indicates further training or mentoring is required or that this type of employee should not be selling cameras.
  • Sales per store trading hour can help assess staffing levels required during slow or busy periods. It can also indicate if a sales person isn’t pulling their weight or conversely is a strong sales performer.
  • Sales per hour worked: The best performers may be due for a reward. The worst performers may need some improvement to justify their retention.
  • Discount level: Say you give staff the ability to give 10 per cent discount at their discretion. You can monitor who is using this only to win difficult sales and who is giving away discounts unnecessarily.
  • Commission reports: Paying sales commission has become a complex issue, with the commission structure varying per retail segment as well as per retailer. For example, clothing retailers prefer commissions based on sales revenue, with possibly higher commission rates for products with higher margins. On the other hand, electronics retailers often prefer commission based on Gross Profit. Some retailers like to give bonuses for selling difficult-to-sell items or making add-on sales (for example, extended warranties for electronics products). The more flexibility in commission reporting, the easier it is to tailor a commission scheme to suit your individual requirements.
  • Comparison to Budgets: Your reward scheme might include achieving budgets, and it might be individual or store budgets. It’s important to be able to let staff know how they’re performing compared to budget throughout the sales period. If staff are working to a joint budget goal, having the current percentage of budget continuously displayed on the POS screen can be a strong motivator.

Frontline staff are your most valuable asset and because of this they deserve your time and laser-like attention.  In turn, they will reward you by delivering more sales; will provide customers with a more personalised level of service, and will be happier in their job – thus minimising staff turnaround. To find out how Creative Computing can help you maximise sales employees’ performance and in turn increase store profits, contact us, or phone Bernie Hogan on 1300 646 536.