Training — Who Needs It?

When was the last time you walked into a store and had a sales clerk either ignore you, aggravate you with their lack of knowledge about the product they are responsible for selling, or ask “why would you want to buy that?” We might think that employee is a jerk but aren’t we really judging the entire business based on the action of one employee? The sad part about it is that employee might be a part-timer who just started working there. But that doesn’t make any difference to us, the customer. That single encounter can lose a customer forever, after all why should we settle for that type of treatment? There are plenty of stores we can shop at.

SO WHAT! EVERY RETAILER KNOWS THAT!

Yes, I suppose we do. It’s what retailers are doing, or not doing, about that is the bigger issue. Unfortunately, and surprisingly, many retailers rarely address this problem properly. I received a call from a business that wanted me to train all of their store managers on how to sell. The vice president said, “These people aren’t selling enough and I need you to whip them into shape in a 4-hour session.”

My first question was, “How much should they be selling?” The response “more than what they are doing”. Then he added, “Well, some of the stores get it and their sales are OK, I guess.” My next question was, “How would the managers be judged?” His response was “if sales go up”.

What’s wrong with this scenario? First of all sales training is a process, NOT an event. It is ongoing. Behaviors are not acquired and instantly mastered, regardless of what some people claim. Yes, you can recognize problems and instantly identify remedies but that doesn’t create efficiency, mastery or success. Like it or not, we have to go though the stages of learning:

1. Accepting the change.
2. Doing it awkwardly or wrong.
3. Doing it correctly but slowly.
4. Doing it without thinking
5. Learning the more sophisticated techniques.

The other issue I had with the call was that a store needs to be judged on more than just the total sales. There are other items that must be measured in order to get a true picture of the performance of the manager:

1. Units per transaction. How many units are being sold per transaction for every employee? What it the average, what’s the lowest, and what’s the best?

2. Average dollar transaction amount. Again, what is poor, average, and superior? What are the amounts for each store, each person, each manager, each area, and the whole company?

3. Closing rate. This is more difficult to track for some businesses. How many people came in and how many were converted into sales? If you can collect this, it is powerful information. (That’s why the internet is so powerful because you can tell how many people visited a site and how many bought.)

A store’s sales can be declining but if the conversion rate is good, along with the units per transaction, and their average ticket size is above average, then it might not be the fault of the store manger, but instead a much deeper issue like advertising, positioning or location. I can only accept a job when these measurements are in place and a commitment to ongoing training or coaching occurs. Otherwise you are on a fool’s mission.

(A postscript to the call was the appreciation I received for, as he put it, “embarrassing us into doing the right thing.” They are working on their measurements now and I will be working with them next year.)

There are some other issues that need to be addressed when we talk about training. First, there are different types of training and the more we learn about the dimensions of training, the better we become. There’s product knowledge training: informing our employees about the product, how it works, why it’s better than others, why it’s priced that way and why they should support and sell it.

Then there is sales skills training. How do you greet a customer, how do you transition into a multiple sale, how and when do you close a sale, how to gather important customer data and anything else that relates relating to making the sale happen and managing the size of that sale. And it must include basic people skills to make an employee more likeable. Yes, Likeable! If our people aren’t likeable, they will never sell anything.

The next level of training occurs during ongoing sales meetings, preferably once a week for less than 30 minutes. The two cardinal rules of sales meetings are: (1) they must start and end on time and, (2) they can’t be complaint sessions. It can’t be a “he said she said” session. You can have those meetings too, but separately from your sales sessions.

The best format for these short meetings is to discuss a sales encounter — actual or hypothetical — and review how it was handled, how it might have been handled differently, and the sales person’s options in the circumstances of that particular encounter. You can get some real participation and some wonderful concrete ideas for your staff to use. Don’t be afraid to suggest a problem about sales to your staff and let them come up with suggestions.

By using this type of interactive approach you will get your more experienced employees on board as well as the newest member of your staff. The focus is on a problem that needs to be corrected. These sessions can become very motivational and serve as “pep talks” because sales people are learning new ways to do their job better while feeling like the company cares about them and their opinions.

It is absolutely key to constantly reinforce the things that have been learned. A slogan that is repeatable becomes a lasting battle cry. Yes, there will be jokes and kidding about a slogan, but that’s not necessarily a bad thing because it gets people talking about what you’re doing. Recognize the jokes and build on them and even address the criticism, then you will gain respect as real leader.

This just scratches the surface of an issue that can make or break a store. A store that can sell usually succeeds. And the stores that can’t sell become the empty spaces we see at every shopping center. Good training converts lookers into buyers and makes the extra sales that, in the final analysis, make the difference between success and failure of a retail operation.

Some folks try to dodge the investment in training with the statement “why should we train our employees? They’re only going to leave!” My response to them is simple (and not an original line) … what if they stay?

That was Obvious.... Why Didn’t We See That?

Did you ever repaint your living room walls? You have the task of taking down all of your pictures or wall decorations and then you have the job of putting them all back when the painting is done. Why is it that we never remember exactly where everything goes?

Do we take things for granted? Is it because when we look at something all of the time we don’t notice the details? Or are there some things that we just don’t think about or pay close attention to? Try this test. Without looking at your watch, tell yourself if your watch has numbers, slashes or a combination of both. I’ll ask that question in a seminar and 40% of the attendees will start to laugh because they guessed wrong. How could they? A watch is something we look at all day long, day after day, but somehow the details don’t register in our minds.

A retailer can work in a store 6 days a week and not even be aware that a ceiling tile right above the cash wrap is stained. Yet a new customer notices it right away and will judge the retailer based on that. It’s those little obvious things we sometimes just don’t notice.

That is the lesson I have learned since I started consulting with businesses over 10 years ago. The answers to so many businesses’ problems were so obvious that I would sometimes feel funny telling them. I felt that they must know but they didn’t. I would look at dirty windows and ask why anyone would want to go into that store, while the store owner would have no idea why. I think it’s because things somehow are clearer when we can see them from a different perspective or distance.

I once got a call from an investment group that had loaned start up money to a store that was losing money. They wanted me find out what the problem was and correct it ASAP. I was able to turn this business around in less than 30 minutes and wondered what gave me this magic wand. I just looked at the problem from an outside perspective rather than as an insider. The insiders blamed the lack of sales and weak management. (They didn’t like the manager.) I looked at their financial statement and saw that 80% out of every dollar received went to buying new merchandise. 30% of every dollar went to expenses. They were losing 10%. To me the obvious was to correct the buying problem. So I asked how they bought their merchandise. They said that everything was bought on consignment. I asked how much is was costing. They explained that the consigner got to keep 80% of what is sold for. Duh... ??? Do you think we uncovered the problem? I had the owner contact all of her suppliers and explain that they had to split the profits 50/50 or they couldn’t work with them. 10% of the suppliers refused but the rest agreed (some did raise the price a bit but that was okay — it didn’t really make a difference) and the business became profitable almost instantly. It was so obvious yet no one had figured it out.

Since I started my mentoring program, I have been working with very good retailers. These are people I respect as merchants, survivors, and business people. They are not new businesses and each one is very special to me in their own right. I have personally learned a lot from each of them. But again most of the answers I give to this group of bright and talented business people are obvious.

What does this all mean?

I think it means a few things.

1. We look at things from our own perspective, through our own set of values and prejudices. If we think fat people are all lazy, then any idea you get from a fat person is prejudiced. Try to look at things through different points of view.

2. Just because we have always done things a certain way doesn’t make it right. Many people do things out of habit and these habits need to be adjusted. There is the old story of the woman who used to cut a half inch off the top of her roast beef before she put it in the oven to cook. One day her daughter asked her why she did that. She said because her mother did it and she just continued. Then the girl asked her grandmother why she it. She said when she first got married she had a stove that was small and the only why she could get a roast in was to cut a piece off the top. It just became a habit.

3. Ask yourself this question: If I hired a consultant to evaluate my business, what would he/she say? Shop your business as if you were a customer. What would you see? What would you observe?

Always remember our eyes are subjective when we are talking about our own business. I started to get a little full of myself because of my ability to walk into a business and pick out the problems and remedies so quickly and easily. But it’s not me as much as it is being just a knowledgeable, objective outsider. We all need that objective feedback to uncover the obvious and that in many cases is the key to our successes.

The Stages of Being Different

I just completed a book proposal about how businesses and people differentiate themselves in an overcrowded marketplace. I want to share one concept from the book because I believe it is so important and powerful to every business person. (It’s one of those ideas that you can’t wait to share!) The issue is that what might be different to one person is not necessarily different to another. We think we are different, but our customers say “so what”.

So how do you know what’s right? Truthfully we will never really know but there are some tools that might be helpful. Knowing the life span of a differentiator and understanding what stage a differentiator is in is an important clue to better understanding the effectiveness of that differentiator.This is my interpretation of the stages:

• Weird — Most great ideas start off with people rejecting them. We hear, “It’s too weird.” We almost always reject something the first time we hear it. It took the zipper 23 years to get popular!

• WOW — This is the stage that the trend setters jump on. It has made it through weird and it has reached the level of acceptably different.

• Wonderful — This is when the differentiator has been abandoned by the hip and trend setters as passé. The Wonderful Stage is when the differentiator becomes the popular trend of the majority

• Waning — This is the very end of the cycle. It really isn’t a differentiator anymore; it’s just a memory of the past. Remembered as once hip and happening, it is the ball player at the end of a career. Every differentiator must get to this stage in order to go into hibernation and prepare for its reincarnation years later. Saddle shoes are still in hibernation.

What’s the best stage? It depends on marketplace and the people you are marketing to.

• Weird is associated with the urban art, free-spirited, almost bohemian community, where the focus is on creativity and self expression.

• WOW has a range from intellectual, affluent, fashion-forward, status-orientated upper middle to upper class grouping.

• Wonderful groupings are middle class achievers or want to be upper class achievers; they are more suburban or country in their thinking than the urban professional. This is the largest group of the four, regardless of the category.

• Waning is associated with the masses or popular price Wal-Mart mentality group but that’s not completely accurate. Many people are just not aware of all of the differentiators. We have segmented markets by mass communication via cable networks and the internet. Someone might on the surface appear to fit into another grouping but because of their single-minded focus, they can look at a differentiator that is past its potency as a WOW. A senior citizen who is just getting into using computers will think Amazon’s process is simply amazing where the rest of the world looks at it as a big “so what”.

This applies to the products you sell as well. I used to call my store a “late second year” store. My customers didn’t understand the “Weird” stage at all. When the item/differentiator first became a “Wow”, there would be some apprehension but before it made it to “Wonderful”, it became HOT in my store.

I always made sure to abandon the item/differentiator while still in the “wonderful” stage before it hit “Waning”. It was too hard to compete in the “waning” stages. You can obviously tell my bias because I even call it the “waning stage”. Some people call it the popular stage. Popularity is for the mass merchant — thin margins, price comparisons, and commodity pricing. None of those terms are really appealing to me or my market.

I hope you enjoyed this point of view. It’s not perfect but it is an interesting guideline. Let me know what you think.

Is the Juice Worth the Squeeze?

Would you squeeze two dozen oranges to get juice that tasted like Tang? Of course not. Why put all of that effort into something that can be created more easily by opening a jar, scooping out some powder, and mixing in water?

So why do many of us (yes, I am including myself) waste our time buying merchandise that we can’t make money with, get involved in projects with limited potential, work with vendors that don’t perform well, serve customers we don’t make money with, retain employees that under-perform, and stay in locations that are marginal at best?

I was at a meeting of my mastermind group, a.k.a. my board of advisors, colleagues, brain trust, and my closest business friends in the world. We meet every other month to discuss trends, our businesses, and the issues of the day. At our last meeting Susan Keane Baker, author of Patient Expectations and a leading service expert and authority in the healthcare industry, uttered the words, is the juice worth the squeeze? It stopped us all in our tracks because it addresses such a universal problem in business today, getting involved in things that aren’t the highest priority or just aren’t worth the effort.

I was working with a business that was agonizing over which long distance carrier to go with. I know every penny is important but she was losing sales on the selling floor of her store that could have represented hundreds of dollars of business while she was figuring out the difference between paying a monthly charge with 5 cents a minute or no monthly charge with 7 cents a minute. I asked her how many minutes they used long distance service? She said about 500 to 600 minutes a month. That juice was not worth the squeeze.

A store that carries a name brand that every store carries and is discounted by everyone is the juice that’s not worth the squeeze. Sure you can sell it, but can you make money from it? Probably not. Find another resource.

Giving a customer an argument over a return is the juice that’s not worth the squeeze. Give them back their money, suck it up, and move on. No, they’re NOT right but is it worth the time? No way! Again here’s the juice that’s not worth the squeeze.

Is it worth time to complain about a business if we have no intentions of ever returning? No! The juice is not worth the squeeze.

Don’t open up another business unless you can make a strong case that the return not only on your money but time and focus is going to pay off. I worked with a business that had a chain of stores. One store was well run, paid its bills on time, had a loyal customer base, and was profitable. The only problem was after all the bills were paid, this 10+ year old store generated only $3,000 to $4,000 annually to the owner. Either build up the sales, which she is constantly trying to do, cut the expenses, which are already as low as they can go, or move the business to an area with more potential. In that location, the juice was not worth the squeeze.

Start to ask yourself that simple question — is the juice worth the squeeze? — and amazing decisions start to happen. You won’t get involved in non-productive tasks and it will simplify your life. It’s already starting to simplify mine.

By the way, for all of you regular readers … I did get my spa cover delivered. But I never received a call from the company to apologize. They’re a business that’s not worth the squeeze but maybe that’s how they feel about me.