Retailers Seek Converts
Commentary by Laurie Cozart, CPC, CEO/Co-founder, TeamSpringboard
The most common of excuses for poor sales performance on any given day in retail stores across the country are “there’s no traffic” or “it’s so slow.”
Millions of dollars are spent every year trying to get customers inside retail stores. A lot of that money, however, is wasted as sales opportunities are overlooked and lost by inadequately trained, poorly motivated and/or overwhelmed employees. Every day, sales are being lost because of poor customer service and lack of employee accountability.
As a retailer, would you be shocked to learn that you sell to less than 20 percent of your stores’ (excludes grocery) traffic? In fact, in most mall-based stores, the conversion rate drops to 10 percent or less.
By improving conversion rates by just two percent, store sales could be increased by 10 percent or more. If your team could sell to another four out of 100 customers, your sales would get a 15 percent boost.
There are a few ways to build sales volume. You can increase the customer traffic to your store or convert a greater percentage of existing shoppers into actual buyers. You can also follow strategies and tactics that increase the average ring, as well.
Of these, which is the easiest and most cost effective?
Converting browsers to buyers is by far easier and much less expensive than attracting new traffic, and the principles that increase the conversion rate often lead to higher rings from existing customers, as well.
Still, retailers continue to spend millions each year on extensive marketing campaigns to get the customers in the door and then even more dollars on store design, fixtures, sound systems and lighting to improve the shopping experience. Has it paid off? If you research the leading retail indicators, the answer is no. Some stores may be attracting more shoppers, but few are capitalizing on the opportunity.
Right now, the average retail company spends less than $100 per year per employee on training. There is no wonder so many employees are unhappy at their jobs; they simply do not know how to do perform them effectively.
Research shows well-trained employees can increase a company’s overall productivity by 22 percent. By combining a comprehensive training program with continual mentoring, productivity can increase by as much as 80 percent.
There’s more… employee training reduces turnover and reduces the amount of time lost to tardiness and illness. It improves company morale and the simple act of demonstrating an interest in the professional development of employees can help achieve sales gains.
Just imagine what would happen if a tenth of a company’s yearly advertising budget was spent on employee development and education. Employees would be happier doing their jobs, customers would be grateful for the great service they receive and investors would be thrilled with bottom line results. This is a triple win situation if there was one.
So, what are you waiting for?
Moderator’s Comment: In most retail businesses, do you believe moving financial resources into employee training from other areas can achieve the kind
of productivity and sales results to warrant such an action being taken? –
Laurie Cozart – Moderator