A better approach to sales floor math
By Gordon Hecht, YSN Contributor
The great philosopher, visionary and occasional baseball player Yogi Berra had many keen observations during his life and career. In fact, the title of this article is a paraphrased Yogi quote (“Baseball is 90% mental; the other half is physical”), to demonstrate society’s misunderstanding of numbers.
It’s so often that we hear how “99% of the people” will choose this, or “less than 5% of the people” approve of that, often with no actual polling or scientific facts to support it. In our retail world, many other quantitative values are tossed around like a beach ball at a rock concert. Numbers are swatted around with no apparent direction, and like the multicolored vinyl sphere, they are also full of hot air.
We like to think that our shoppers make their buying decisions based on the features, advantages and benefits that we quote, which are so often numerically based (900 coils, 3.2 density foam, 26 cubic feet, 10-year warranty, 60-month financing, 70% percent off). In reality, 86.2% of shoppers make their buying decision based on emotion, and then back that emotional decision with the facts and figures we provide. (And in case you were wondering, that 86.2% is a purely self-created statistic.)
It is important to use numbers or quantitative values in our sales presentation; however, those values should be stated in a way that help shoppers understand the impact of those figures.
10-Year Warranty: There are very few items on the market that are priced as low as mattresses with warranties that long. In most cases, manufacturers and retailers don’t get credit for that no-extra-fee advantage.
Drive home the importance of that duration. Rather than just tossing in the 10-year line, do the math for your shopper. “Purchase this mattress today and now through the year 2032, if something goes wrong with the mattress due to manufacturer’s defect, you’ll get a new mattress to replace this one.” While a decade seems short, the year 2032 feels way ahead of us.
Take it a step further for kids’ beds. Add 10 years to little Aidan’s or Chloe’s current age or school year to explain the warranty.
Aidan is eight years old, entering the third grade. “By purchasing this deluxe mattress for Aiden today, you are assured of not needing to replace it until he goes to college.”
Chloe is 14 years old and entering high school. “This may be the last mattress you need to get for Chloe; the next time she will need one is after college and she’ll be on her own.”
Up to 70% Off and More: Percentage discounts have been misused by retailers and misunderstood by shoppers for decades. Whenever I see a percent-off ad, my first question is “Off what?” I visited a retailer that was celebrating its 18th anniversary in business with an 18%-off everything promotion in the store. Sounds like a great deal, until I asked a sales associate for a price quote on an item that was tagged $669.95. Try doing that, with or without a calculator, in under a minute.
Many people struggle with percent-off sales promotions. Stores that promote “We pay the sales tax” report greater activity than a 10%-off sale, even if sales tax is under 7%.
Convert your promotions to dollars off rather than percent off and make it easier on everyone. You can make it a graduated offer, such as $50 off purchases of $500 to $999; $100 off purchases of $1,000 to $1,999; and $200 off purchases of $2,000 or more. Easier math, easier to understand the discount and easier to move up to the next price tier of savings.
A Double Price Quote: Rising prices are coming at a time when shoppers are tightening their grip on their purses. They still want to purchase your merchandise but need help figuring a way to squeeze it into their budget.
It’s a great time to quote prices two ways, in cash and in dollars per month. That $1,199 mattress purchase is just $100 a month for one year, and a luxury $5,999 mattress is that same $100 for 60 months. Your sales team can learn this in a few short minutes, memorizing only two numbers: 50 and 100.
Fifty dollars a month is $600 a year, $1,200 for two years and $1,800 for three years.
One hundred dollars a month is $2,400 for 2 years, $3,600 for three years, $4,800 for four years and $6,000 for five years.
Memorize this and you’ve got the most common mattress price points in dollars per month.
One more tip on quoting price: Before starting to create or write the sales invoice, be sure to quote the total price including all accessories, delivery charges, taxes and any other extras. The goal is no surprises when it’s time to take payment.
The Readers Always Write: Last week’s article on hiring a high school grad drew an overwhelming response, with many readers sharing their first job experiences. Apparently, leaders from the retail and manufacturing side of our business started out in life as shoeshines, newspaper boys/girls, horse farmers, metal platers and factory, fast-food and delivery workers. They all currently hold executive positions or are successful business owners. Don’t miss your opportunity to give tomorrow’s leader a chance to succeed today.
Gordon Hecht is a business growth and development consultant to the retail home furnishings industry and a regular contributor to YourSource News. You can reach him at Gordon.Hecht@aol.com.