Tales of songs, soda pop and salespeople
By Gordon Hecht, YSN Contributor
A string of several unrelated topics can be quite impactful.
Back in 1971 Norwegian sound engineer Eirik Wangberg connected several short unfinished songs. In an era of three-minute tunes, Wangberg produced a 4 ¾-minute medley that shot to No. 1 on the U.S. charts. The song still plays on radios today.
This article won’t be as big a hit, but you may find a useful nugget or two that are worth remembering. BTW, that song released 53 years ago was “Uncle Albert/Admiral Halsey” by Paul and Linda McCartney on their album “Ram.”
We’re No. 2!
You may have missed the news: for the first time ever, Dr Pepper nudged out Pepsi as the second best-selling soda pop in America.
Don’t misunderstand, when you take all the sub-brands into account, PepsiCo sells far more flavored water than the recently combined beverage combine Keurig Dr Pepper. But on a straight matchup between plain old Pepsi and original Dr Pepper, it’s the guy with the advanced degree that wins out.
You might ask, why does this rock our Retail World? Pepsi has its fans and loyalists. Same for the good Doctor. They ask for the beverage by name. There are dozens of ways to buy Pepsi: Diet Pepsi, Cherry Pepsi, Caffeine Free Pepsi. About the same for Dr Pepper.
When a Pepsi loyalist switches to Cherry Pepsi, they reduce the sales volume for regular Pepsi. When more variations are offered, each choice experiences reduced sales. Essentially, Pepsi stole market share from itself.
Look at your own marketing strategy. Sure, you need to have a variety of choices. Every extra model you add will reduce the sales volume of your existing samples. However, you will gain overall increases in revenue.
If someone is going to steal your market share, shouldn’t it be you?
Hire Calling
Employee compensation belongs on the expense side of the ledger. It’s an expense that helps your business operate. But some employees cost you more than others.
Imagine you hire a new delivery helper. On the first day, your helper unwraps a king mattress and drops it in a mudpuddle right in front of the customer. A $2,000 loss. Being a forgiving boss, you might give him a mulligan and keep him on the payroll.
Two weeks later, the same thing happens. Another mudpuddle and another $2,000 loss. You are a forgiving type, but tell him he has to pay half the cost of the replacement.
Two more weeks go by and another mudpuddle claims another king mattress. Courtesy of your new guy. Forgive and forget — you tell him to forget about coming in to work tomorrow. It’s easily measured: you’ve lost $6,000 in sales and merchandise.
Now look at your sales team. They all greet the same number of shoppers and have the same array of goods to sell. Each month your top person, Suzy Supersales, closes at 60% with sales volume of $60,000. Your middle person, Gary Goodguy, closes at 40% and writes about $40,000. Larry Laggard brings up the rear at a 25% close rate. He clerks just over $25,000 in written business.
Everyone else closes somewhere between Suzy and Larry.
It’s pretty easy to see that Larry is costing you money. He is $15,000 behind the average and $35,000 behind what is possible.
That average loss is 2 ½ times greater than your former delivery helper.
Hiring and training new salespeople is a pain! It takes time and effort. You end up keeping Larry on the floor just so you don’t have to recruit.
Keep this in mind: successful selling comes from two factors, knowledge and behavior. You are obligated to provide, rehearse and test product and selling skills. You cannot change behavior. That’s up to the Larry’s of the world.
Larry costs you $180,000 a year in sales. On top of that, he frustrates Suzy Supersales because she sees how he hemorrhages opportunity. That frustration may be the thing that causes her to leave your team.
Recruiting is a 365-day-a-year thing. The top retailers stay on top by looking for great people every day. When they have an empty chair, they can fill it in 24 hours. Make it your goal to have a drawerful of resumes that you can dip into when one of your employees is costing you dough.
P.S. Arguably the greatest musical mashup is the side-two medley on “Abbey Road,” by Paul McCartney’s old pre-Wings band.
Gordon Hecht is a business growth and development consultant to the retail home furnishings industry and a regular contributor to YSN. You can reach him at Gordon.Hecht@aol.com.
