Profitable Times Newsletter

Deadly Sins of Retailing

1. Not Truly Believing Customer Service Builds Loyalty and Sales

All our consulting clients, seminar attendees, anyone who comes in contact with us, knows how strongly we feel about the benefits of responsive customer service. Regardless of your product focus, location, size, or any other factor, if you don't truly believe that customer service builds loyalty and sales, then you are leaving money on the table for your competition.

What is great customer service? There is no one definition or set of rules, but it isn't an amorphous blob either. It starts with acknowledging the customer, but the heart of great customer service is a 'will do' spirit, and an understanding that people buy people, not just product.

Remember the retail adage: "If a customer has a good experience they will tell three people, if they have a bad experience they'll tell ten."

2. Not Using Pro-Active Selling Techniques

Retail statistics show that only 15% of your customers know exactly what they want when they enter your store. That leaves an incredible 85% of purchases either sort-of planned or not planned at all, with final decisions being made on the sales floor.

What an opportunity for those stores that do the things that help customers make buying decisions. In addition to attractive merchandise and displays, and great customer service, pro-active selling such as really listening to the customer, and employing suggestive and add-on selling skills, can dramatically increase your sales.

3. Failing to Trigger Highly Profitable Incremental Sales

Incremental sales are purchases made by customers above and beyond those they intended to make when they came into your store. To a great extent, these highly profitable additional sales are yours for the asking.

If you have flat (literally and figuratively), do-nothing displays, attractive add-on and suggestive displays that stimulate additional sales should replace them. Selling more of your higher priced merchandise is also a good way to increase incremental sales. These products should be displayed in an ambiance that enhances their value and with signage that gives the customer good reason to spend additional dollars.

4. Making Decisions Without Knowing Enough About Your Customers

Who are your customers? What percentage of the people coming in the door are tourists, locals, children, and seniors? More importantly, what percentage of your sales come from these and other customer categories? What do your customers buy... or really want to buy? You should know the answers to these and other customer related questions, cold. And if you don't know, immediately implement a plan to find out.

5. Buying Merchandise Without a Plan

Those of us who have been in retail for a while can tell by just walking into a store if the owner/buyer uses a buying plan. Our Store Review Program identifies difficulties with inventory more frequently than any other problem area.

When a buying plan is not being used there is either too little merchandise to make a statement and offer sufficient choice, or more likely, so much merchandise that the store is way beyond being a warmly cluttered place where shoppers can hunt for treasures.

Buying plans take into consideration current conditions, and calculate how much to buy to meet merchandise needs in the future. Well executed plans result in higher turns and fresher looking merchandise, reducing the money tied up in inventory, and increasing profits.

6. Lack of Sufficient Product Knowledge

The well-prepared staff is trained in product knowledge. Product knowledge includes product location (where it is in the store); ideas on appropriate products to meet customer needs (suggestive selling); in depth knowledge about ingredients or special applications; artist or manufacturer information; special features, and most importantly from a selling standpoint, the possible benefits for the customer.

7. Unfocused Product Selection

Can you describe your product selection in ten words or less? Is your store known for something? There is a difference between purposely-cluttered merchandising (which can be very effective and fun) and unfocused product selection.

If you can't capture the essence of your store in a few words then your store won't stick in your customer's mind. The customer is less likely to make a general mental note to visit you again, or remember you for a special occasion, or effectively tell others about your store, if they can't capture a simple, easily remembered image. The loss of positive word-of-mouth alone can severely diminish the potential of a store.

8. Focusing Too Much on Procedures and Not Enough on Motivation

Of course your staff needs to know how to take a check, run through a credit card, handle a return, operate the cash register, make the bank deposit, and open and close the store. But, if you spend too much time on procedures and too little time on motivation, there won't be a lot of checks, credit cards and bank deposits to worry about. Look at the memos you write and the little yellow stickies you post to see how much of your time is spent regulating instead of motivating.

9. Not Smiling

10. Not Telling the Customer Where the Money Goes

Museum store and hospital gift shop customers are motivated to buy more when they know the profits will stay within the host institution, rather than going into the deep, dark, operating budget of an umbrella organization. Add signage to your store that advises the customer that, "The revenue generated by this volunteer run store ...", and then tell them about a special project that will be supported by the store.

Motivation of your staff to sell, and motivation of your customers to buy are equally important. Incentives, contests, and regular training all help to keep your staff sharp and result in increased sales. Suggestive and add-on selling techniques, good signage (no negative signs), exciting displays, product knowledge, great customer service and consistent product selection all motivate your customers to buy.

In combination, motivated sellers and motivated buyers are a potent, profitable combination.

See the complete list of Profitable Times™ Newsletters.


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