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Business Today = Change
Doing Business in a Difficult Economy

October 2008

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Page 2 of 3 No standards

Inconsistency of standards across the company will kill the brand.

There are two main causes of underperformance, a lack of clearly stated performance standards and poor store management. It is a surprising the number of retail businesses that operate without setting any kind of performance targets. If the sales team is not targeted or incentivized to achieve specific sales results, there will be a lack of urgency in the sales effort. Even if targets are set, they are often set in vague terms of a store target on a weekly or monthly basis.

For sales targets to be motivating they need to be set in terms of individual or team performance and measured on a daily basis. If the target is set in terms of daily sales quota, units per transaction, transactions per hour or average sales ticket, it creates a sense of urgency in every customer interaction. To drive target achievement and customer satisfaction standards need to be set so no sales opportunity is wasted.

Retail businesses fail because they don't have standards or if they do, they are not enforced. Ensuring that standards are enforced is clearly the responsibility of the management team. If a store manager is not strong enough to insist on compliance, they cease to be standards and become suggestions. The first time a manager accepts below standard performance and non-compliance, the game is lost.

Managers need a 'tool kit' that helps establish a framework of management skills and practices to drive performance, customer satisfaction and profitable outcomes.


Ineffective selling culture

It is everyone's job to satisfy the ultimate customer and sell something. When you ask employees what their role is and they say "merchandising, stocking, pricing" they do not understand retail. All these jobs are important, but what they do supports selling and serving the customer. It is not unusual for a sales associate to avoid talking to a customer. The old joke that 'this place would run much better without customers' accurately reflects a culture that is prevalent in a significant number of retail businesses.

Every employee must clearly understand that they must CARE. CONTACT every customer, ASK questions to determine customer's needs, RECOMMEND products and solutions, and EXIT (ask for the sale), making sure that every customer has everything they need to make their purchase work or work better before they leave the store.


Undertrained employees

Your associates are not properly trained and do not understand what is expected of them. Ongoing training and coaching is an essential element of success. There are many corporate excuses for this dilemma. 'It is too expensive', 'I can't take my people off the selling floor to train them', 'I train my people and then they leave'.

If the strategy is to improve your employee customer experience and profitable outcomes, you must invest in training your managers and store employees and then hold them accountable for their store and personal training agenda.

If you are afraid of investing in training because of employee turnover, turn it around. What if you don't train and they stay. Even though staff turnover in retail is very high, you must maximize the return you get out of your people while they are with you. The fact is that better training reduces turnover.


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