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.

©2011 Retail Redefined and retailrichez.com. All rights reserved.

Four Common-Sense Goals For Your Store in 2012

by Richard Gordon AKA Retail Rich

Hopefully you’ve come to realize by now that there are two ways to produce more business: You can bring in new customers or you can sell more to the ones that you already have. If you’ve run the numbers or watched the most successful and profitable retailers you should know by now that it’s easier (and more profitable) to sell more to the customers you already have.

If you’re with me so far, you have to ask yourself, “How do you sell more to the customers you already have?”

1.  Get Your People to Perform As Expected

Yes, I know that’s easier said than done.  Whatever great mission or set of goals you’ve created going into 2012; you won’t get anywhere if you can’t manage these next four specifics.

•    Know what motivates your people.  Don’t just think you know.  Find out what gets them excited.  This may be different for every one of them.

•    Give consistent and regular recognition for any positive efforts in the right direction.

•    Do NOT assume that because you gave instructions once, or stated an important policy, or trained anyone on any specific topic, that it will “take” the first or even the second time.  Good training means reinforcing and emphasizing desired behavior and actions over and over.

•    Implement some specific corrective training for any employee that isn’t measuring up to expectations (if they’re sincerely trying), rather than any punitive or embarrassing actions.

•    Do not reduce your standards or accept mediocrity.

2. Put A Smile On The Face Of Customers Who Enter Your Store.

Do not ignore or underestimate the importance of this objective.  You can create memorable or remarkable moments in your store by working to ensure that your customers experience something special, emotional or outstanding that makes a lasting impression on them. The goal is to tie the customer’s memory regarding visits to your store to small daily positive memorable experiences or even big “wow” moments when possible.  Over a period of time, real emotional ties develop and become much more powerful than any advertising campaign. Regardless, memorable experiences are extremely rare when visiting almost any store, so this becomes one more great chance to separate yourself from the competition!

Two Primary Ways Customers Evaluate Their Experience In Your Store.

•    They compare their experience in your store to what they expected it would be.  Can you do better?

•    They compare their experience to other experiences they have in other stores.  Can you do better?

Customers may have low expectations from any sales clerk these days. Your goal may be as simple as having a sales clerk who smiles, looks the customer in the eye and remembers their name. (I guarantee you that’s an improvement in many, many stores!)

Your store can begin to exceed experiences over other stores by simply having a pleasant conversation with the customer. Exceed the competition by offering to gift-wrap their purchase at no charge.  Maybe it’s opening the door, making a funny comment and helping carry packages to the customer’s car.  Wouldn’t any of these be memorable and put a smile on the customer’s face? (These things are a lot easier to accomplish if you have employees who actually enjoy people and want to help them. This becomes your goal when you hire.)

These things add up and go a long way in being memorable. Think about a cashier at a drive-thru who has a “glad to see you” smile. They might make a positive comment about a child or pet in the car. They may keep treats available for kids or for Fido. They may even hand a regular customer a special coupon for a free drink or sandwich the next time around.

NOTE:

One of Nordstrom’s nice touches comes when they finish ringing up the sale. They don’t hand the package over the counter to the customer or let them pick it up off the counter; they walk around the counter and present it to the customer with direct eye contact, a sincere smile and a “Thank You” . . . . Nice Touch!

3. Ask Questions And Try To Add To Every Sale!

One simple goal is to train your employees to ask questions of the customer to uncover their needs and more importantly their wants.  You can have your employees do some suggestive selling.  Give your employees a goal of adding on just 10% to every sale, no matter where the purchase starts out.  The simple and magic phrase to remember is, “Have you seen this?”  You don’t want them badgering customers and repeatedly asking if the customer is sure they don’t want this and that, but there is absolutely nothing wrong with asking if the customer has considered this or that, or if the customer needs a tie with that suit, or do they need some socks before they leave.  This is actually helping the customer to make sure they’ve picked up everything that they intended to buy or maybe they haven’t thought of. You don’t want your employees to sell customers anything they don’t actually want and you don’t want them to bombard the customer with this same question over and over! The goal is to be helpful.  Customers already have the “want” built in if you find the right item or push the right button.

Once your employees realize that a 10% add-on is a pretty reasonable goal, you may actually find that a little competition begins once the first employee achieves this goal.  I’m sure you can encourage this effort by encouraging and challenging others to follow suit. Bolster this effort and encourage this atmosphere by having some simple contests with some gift card rewards.

4. Get Customers On Your E-Mail List With An Incentive

Ask ALL customers at the time of purchase to provide you with their contact information so they can be on your e-mail list. Let them know they will receive a healthy discount on their next purchase if they bring back the printed e-mail you will send them with the discount coupon.  Collecting this information is CRITICAL. It’s worth whatever discount you may decide to provide.  Also let them know that they will receive special offers for their loyalty along with announcements of new product arrivals and helpful information.  You won’t get them all, but those you do get, probably like your store quite a bit and want to be informed.  Don’t disappoint!

©2011 Retail Redefined and retailrichez.com. All rights reserved.