By Gordon Hecht, Serta Simmons Bedding
The business owners and entrepreneurs reading this article share a common drive with folks like Sam Walton, James Cash Penney and Mary Kay Ash.
Each began their careers working for someone else. Along the way they realized they can do business smarter, better and faster than the companies they worked for and decided to go out on their own. They were retail sales associates at heart and would eventually be the number one salespeople at Walmart, JCPenney and Mary Kay Cosmetics.
First-generation retail store owners tend to come from the sales field, as opposed to the operations, accounting or marketing sides of the business. Successful second-generation owners usually get their start as adults selling the products that mom and pop had on the floor.
This COVID thing has really thrown us a major curve ball. But to each curse there is usually a blessing on the flip side. For many retail stores, employees at all levels have not returned to work, and dozens of your competitors are vying for the same shrinking pool of sales candidates. The result, just like during the economic turndown of 2008, is that more store owners are getting out on the sales floor (there’s no one else to greet shoppers) and purchase conversion rates are sky high!
Closing rates have been on the upswing for a while for a lot of reasons. Many consumers are shopping online and walking into brick-and-mortar storefronts with a fairly solid idea of what they want to buy. The economy has been good over the last few years and people have money to spend. Things have been tighter since March, but with vacations, sporting events and dining out cancelled, shoppers have more discretionary income and are spending it on home comfort.
But the products we sell still must be “sold” — that is, your merchandise has to be explained and demonstrated. It turns out that business owners (a.k.a. the people signing the checks) can be really exceptional salespeople. Here are a few reasons why:
- Business owners know that shoppers are a paid-in-advance asset. There is a marketing cost to every door swing. Depending on the market they operate in, the cost can vary between $25 and $100 or more per guest. Owners have to make that investment pay off.
- Business owners have a good handle on their inventory, incoming orders and slow-moving floor samples. Whether the shopper needs immediate gratification or can wait, the owner knows which items can be delivered right away and which are delayed.
- Business owners dislike angry customer calls. Mistakes happen, but owners reduce customer dissatisfaction by setting realistic product, service and delivery expectations. They simply won’t make the sale if they know the merchandise will be returned or if they must make a price (a.k.a. profit) adjustment.
- Business owners know that merchandise cost is just one expense of a business. There’s also rent, utilities, advertising, insurance and, of course, multiple levels of government fees. Owners know that they have to maintain margins but also never want to have a blank sales day. They know it is always better to give extra merchandise than to take away margin dollars to close a sale.
- At their cores, business owners also have a powerful blend of passion, fear and responsibility. Owners love this retail world and if they have been in it since 2000 or earlier, they’ve experienced feast and famine and feast again. Every incoming shopper represents an opportunity to create a customer for life and to continue building their empire.
I’m not sure when, but just like every other roadblock, crisis and disaster that’s been tossed our way, there will be an end to the impact on business from COVID. When that does eventually happen, it would be sad if the number one salesperson in your company quit selling and went back in the office. But it doesn’t have to be that way.
Owners need to create a sales team that is knowledgeable, savvy and passionate about running a business. A good start is to educate your team on the five bullet points above. Consider operating an “open book” business and teaching employees about financials. You can top it off by letting your team share in the success of the business based on specific, defined metrics.
Another plan is to do what you do best! Instead of hiring an extra sales associate, why not hire someone to do the routine tasks that take up three hours of your 12-hour workday? Imagine your store’s sales increases if you earnestly worked the floor every day. You’d close more sales and set an example for your sales team.
The choice is yours. But you can decide later — I just heard some shoppers come through the door and you’re up!
Gordon Hecht is Senior Regional Manager/Strategic Retail Group at Serta Simmons Bedding and a regular contributor to YSN. You can reach him at email@example.com.