Sunday, August 16, 2009

Crossing the Golden Zone

There has never been a more appropriate time to train your retail associates than here and now. Recession is a time when retailers want ‘more’ from ‘less’ – they want to boost their productivity while keeping operating expenses low. They want better utilisation of store space (sales per square feet) and an even better deployment of their customer service associates (sales per staff), after all the down-sizing and attrition.

Self-imposed austerity during hardtimes is good – businesses tend to become tight-fisted; but even those retailers that have allocated budgets are known to cut down on two important lifelines – advertising and training – and that, in my view is counter-productive.

Besides other things, advertising generates traffic into your stores; and training reinforces skills in your associates that make them more productive on the salesfloor – helping them make better conversions and increase average transaction values (ATV). What is recommended therefore is a judicious investment in the two.

Besides well established brand equity of a retailer, it is advertising that brings more and more customers into stores. But, once customers are on your sales floor, it is your sales associates (regardless of what nomenclature you use to refer to them) that make or mar a sale - No sale is an accident; but a lost-opportunity for a sale is definitely fatal.

The critical moments of truth in any retail selling is when your associates are able to 1) establish a rapport with every customer – connect with them as fellow human beings ready to serve; that will let them 2) probe deeper to understand customer needs and 3) establish personal credibility - that they indeed have the ability to help find solutions to customers needs and 4) demonstrate convincingly that they have only the customer’s interest at heart - over-riding that of their employer - in making the sale; in a true spirit of ‘customer service’. I call these four stages in the customer engagement process, the ‘Golden Zone’ of selling, as depicted in figure 1.

Figure 1:

Any retail training to be effective has to take cognizance of this fact and equip the retail staff to transition the golden zone successfully. For, as shoppers we all try to avoid ‘Sales people’ approaching us in a retail store because we KNOW that they are out to SELL something to us. We rarely look upon them as ‘facilitators’ who will help us find solutions for our needs - because, they rarely live by that image.

Unfortunately however, retailers hitherto have short-circuited the golden zone in one way or the other. Their training – usually an extension of what is normally called ‘induction’ – has been confined to a quick run through ‘product knowledge’ if at all; completely ignoring the first two essentials. It is like teaching a child S to Z in the English alphabet!

Consequently, we hear retailers complain that their sales associates are unable to close a sale even though they have had a brush with product knowledge! Only when sales associates walk together with their customers across this golden zone, will they have earned any credibility and trust to influence what customers buy and how much they buy. Therefore, the first two elements in customer engagement – building a rapport with customers and identifying their needs – is as indispensible in any selling process as the other two – establishing personal credibility while acting in the customer’s interest.

Training cannot be a perfunctory or annual exercise done erratically. For training to be effective, it has to be a continuous and deliberate commitment. Look at any top seed sports personalities or teams. They occupy the top slots in their respective sports and are consistently there, because they train for many hours every single day and do it deliberately. They set rigorous schedules and follow them to the last dot. Thus, it is not surprising that retailers who have invested in continuous training in selling skills and customer service skills have reaped huge benefits – in most cases, sales growth to the tune of between 5% and 20%.

If training is an activity that enhances sales and productivity; I believe it should be perceived as an investment and not as an expense; as it unfortunately is the case among many retailers currently. Just to put things in perspective, Indian retailers are losing around 4% of their net sales annually in shrinkage (roughly four thousand crore rupees in organised retail alone) – which is frighteningly huge compared to international standards. If only retailers commit to invest one quarter to one half of that, to the right kind of salesforce training they will begin to see the impact in their sales numbers.

If retailers are convinced that this is the way to go, their next question is to have the right content developed and delivered by the right trainers in the right manner. It can become a daunting task in the current retail scenario in India with several self-styled retail trainers without any empathy for retail. The acid-test for choosing the right training system in this lot is to look for the following traits.

Retail Grounding: It is indispensible for retail course designers and trainers to have had an ‘on-the-sales-floor’ understanding of retail – preferably in multiple formats. Trainers ought to have ‘been there and done that’ - be well-grounded in retail basics and yet be open to experimenting with fresh ideas - because what works for one format and one geography may not work for another. And training for retail skills is not a sacred initiation that happens in a classroom; it has to connect with the unique challenges of the shop-floor.

Realistic content: It is also essential that the training content be robust enough to deliver the training imperatives while keeping it easily comprehensible by sales staff– they have every right to know the ‘why’ for every ‘what’ they are being asked to do. And more importantly, they should also be made aware of the implications their actions would have on building the store brand in the minds of their customers - A sales associate trying to sell a higher priced product just to meet his sales targets while a lower priced product could still serve the customer’s needs, is likely to boomerang on the store’s reputation.

Manageable application: The retail training should establish well-defined metrices to evaluate the performance of salespeople long after the training intervention. The content and its delivery have to be based on a robust foundation of ‘progressive discipline’ for learning and application – an environment that respects certain ‘non-negotiable’ basics. Store and Regional managers need to be equipped with tools to help set individual goals for salespeople and monitor their performance against them. They should also be trained to coach and mentor their staff to outperform themselves.

When retailers don’t train their staff - or don’t train them enough - and yet expect them to show desired results; it is like giving them bicycles to compete in the grand prix out there! Only when a training initiative has all the above three ingredients, will retailers be able to measure the efficacy of any training program. Right training can positively impact both revenues and bottom-lines and yield a healthy ROI for the training dollar. Retailers have help at hand to choose from best-of-breed training programs – and design their own versions of Formula 1 - to make every member of their customer-facing teams true ‘Stars’ of the ‘Golden Zone’.