Is Cutting Payroll The Answer To Your Problems?
by Rich Gordon AKA Retail Rich
In the corporate world, when someone (usually a senior manager who comes from the accounting side of the business) wants to reduce expenses, payroll is always the big target? I know very well that payroll is the big, big budget item for any of us . . . but is cutting expenses the only answer to profits? Must service always be eliminated in the name of making money? Is that the only way to get a retail business to a profitable position? I don’t think so. As a matter of fact, I know so!
There is an almost unanimous feeling in this country over the lack of customer service! Most department stores are perfect examples of stores that are less attractive places to shop than they were years ago. There is an increasing lack of service and knowledgeable sales help at these stores. What happened? They supposedly ARE NOT self-service stores! What is your store? Is it too close to being a self-service store? Why are people paying full retail price in your store? WHAT IS THE VALUE YOU’RE PROVIDING YOUR CUSTOMERS? Standing behind the counter and processing the debit or credit card is NOT “value” as far as your customers are concerned! They must be getting something extra for their money, if they’re going to pay “full boat” pricing!
If you’re getting good service and productivity out of your people, don’t be too hasty to cut your payroll. Take a look at some of the chapters in my book, “A Line Out The Door” and ask yourself once again if payroll should be your first choice.
My first choice would be to do everything possible to assure that I impressed and pleased my customers when they entered my store. Think about it. You may not get a second chance at pleasing or impressing them! Are today’s department stores listening to their customers, with their ever-increasing self-service approach? I’m really not so sure. If or when you cut payroll, are you listening to your customers? I do understand, if that truly is your only choice to survive, but all too often it becomes the easy answer. All too often, disappointing customers by further cutting your service just adds to the problem and the result is a continued downward spiral. Increasing sales is the answer to most problems. Cutting payroll may be a lot more like sticking some chewing gum on the leak in the swimming pool.
What about sales? Have you really done everything possible to increase sales? Maybe your sales could be a lot better if you asked more questions and listened more to your customers. I see way too many retail storeowners with the attitude they have done everything possible to increase sales, yet I can very easily see they are mistaken as I walk through their stores. I see poor service, poor signage, dirty windows, floors, stained ceilings and unimaginative displays. I also see the same store layout with the same products in the same places and walls that haven’t seen a fresh coat of paint or a splash of color in years.
Are you listening to your employees? Get your people together and tell them about your situation. Ask them what you can do to improve. Your people hear things and see things you don’t, and they can often provide some very enlightening information and answers that may surprise you. Get the answer to some questions including the following:
• Do you know what the competition is doing to serve customers better?
• Do you know what you’re doing that surpasses the competition? What can be emphasized, expanded or replicated that you are already doing well?
• What area of your store is least productive? Why?
• Is your store meeting the customer’s expectations or surpassing them?
• Does a process or a policy need to change?
• Ask your customers what you could do to make them come back more often?
• Ask your customers if they owned your business, what they would change?
• Have you ever called your store and acted like a customer to determine how things are handled?
There are many more questions like these that need to be asked and answered. Payroll may indeed be the answer to your problems, but get some answers before you go blindly hacking away at payroll.
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