John Quattrucci is President of Stuart & Associates, a retail consulting firm specializing in Sales and Margin Growth Programs and Returns Reduction Programs.
Participants often ask me after a speech or a facilitated training I've done, how I got so comfortable speaking in front of groups? This is usually followed by “Do you have any tips that could help make me a better speaker?” After responding with “Yes, hire me.”, I realize how many people out there, in all walks of life, are terrified of public speaking. In fact the latest list of people’s greatest fears ranks Public Speaking at #2 and fear of death at #6. That’s right, people fear public speaking more than dying. Here’s the good news, it’s really not that tough.
Let me start by saying that I completely understand the need for computer based and virtual training in today’s retail environment. Shrinking margins and lower labor has forced companies to re-think how they train their employees. In the fast paced changing times and short attention spans, there is merit to these delivery systems. They are short, cost effective and merge nicely with the reliance of devices that exist today. Having said that…..
I have been involved in developing and training retail employees for 25 years. Our company, over a 19 year period, has trained well over 500,000 people. Some through video and computer based training but most were trained LIVE. I love all forms of training but to me there is nothing like being in a room with a group of people, who when done, their faces and body language reflect that they got it! Now it’s true that associates can take surveys after watching a video or taking computer based training to show their company that they “got it”, but are they answering truthfully or are they writing what they think the company wants to hear? Tough to do that when you’re looking a participant eye to eye.
Dating web sites are great, but the face to face live meeting determines if there is a spark or whether you tell your date “I have to get up early, let’s make it a short night”.
Most consumers have a preconceived view about of extended service plans as protection they don’t need. How you train your sales team to present your plan to the consumer can make a huge difference in your success rate and in customer satisfaction levels. Here are just a few tips for successfully selling ESPs:
Unfortunately, retail has experienced some struggles in the last five years, and many companies have stopped training employees to sell extended service plans. Instead, some stores put plans in plastic packaging near the checkout with other impulse purchase items. They hope the customer will take the initiative to read about, understand, and buy the ESP on their own.
This kind of impulse buy may work for gum, but not for an ESP, which requires an explanation of benefits. Customers need help understanding the value of this investment. Depending solely on a point of purchase display to sell the plan is not impossible but more than likely won’t succeed.
As the prices of electronics and appliances continue to fall, it’s critical that you train your team on how to effectively position your extended service plan with the benefits that will provide the best value for the price to your customer.
Extended service plans (ESPs) and accessories are helping many retailers make up the loss of margin they’re experiencing as a result of lower prices on everything from computers to washing machines. While it’s true ESPs provide the much needed margin, more importantly, they provide additional value by helping to improve customer loyalty and reducing product returns.
Most companies face two challenges that prevent them from maximizing ESP sales. One, they don’t know how to balance the benefits of the plan with the price. And two, they don’t know how to train and manage their organization to sell them. Here are a few ways to address both of these challenges.
How much of a priority is selling extended services plans to your managers and employees? We’ve found that some companies offer ESPs to their customers begrudgingly. They’ll offer them because they are told they have to or because their competitors do, but they never fully embrace the concept or the benefits. This is a costly mistake. The benefits to your company, your associates, and your customers, far outweigh the time and resources you invest in working with manufacturers, negotiating with insurance companies, and training your team how to properly present ESPs to your customers.
The return on investment of selling extended service plans includes four major benefits...
Let me start by describing a training scenario most of us have likely experienced. You register for a retail sales training class or seminar, paid good money, and your expectations are high. After sitting through the session, you're completely blown away by the experience. The facilitator captures your imagination and makes you feel like he/she is speaking directly to you even though there are 200 people in the room.
The training content is specific, relevant, and spot on. When it's over, you can't believe you just sat through a 5-hour training session. It felt more like an hour. You never once nodded off or wanted to check your text messages. In fact, you have 20 pages of copious notes because you were trying to capture every thought and sales step.
You leave the training session charged up and thinking...wow, that was a seminar!
Now, full disclosure, one of the things my company specializes in is retail sales training and motivational seminars. In fact, over the last nearly 20 years, it's really what has built our reputation even though we do so much more. Our training is unique (to say the least) and it leaves an impression with an audience. We consistently hear from clients, "no one connects with an audience the way you do." The best compliment we can ever receive (and it's happened often) is when we train or meet with a company’s employees, and at the end of the session they can't believe we don't work for their company as in-house employees. That's when you know you've hit the mark!
Here's the thing...the success of our retail sales training programs never starts with the live performance! That's actually the last step. Here’s why...
Extended Service Plans (ESPs) are an important part of a retailer’s success, profitability, and a customer loyalty builder. A successful extended service plan ultimately depends on strategy, program offering, reporting, execution, and processes. These core components dictate whether a retailer achieves optimal financial results and increased customer loyalty -- or -- marginal performance and disappointed customers. If you want to identify the missed opportunities for your organization in maximizing profit and increasing customer loyalty through extended service plans … then read on! Doubling or tripling your current sales of extended service plans is a realistic expectation, when you challenge your organization to think differently.
Webster defines coaching as; "to instruct, direct, or prompt". After reading that, I started to wonder how most people who are coached on the sales floor would define it. Coaching; "The time of the day when my manager tells me everything I did wrong or forgot to do". That is not coaching for performance -- that's intimidation.
I have worked in and been around retail stores, call centers, return centers, and customer service in general, for over 20 years. I am always amazed at what some managers/leaders think coaching is. My company actually does coaching for performance seminars. In fact, when we first started, we didn't offer coaching as an option. However, after doing role plays in sales seminars that include a customer, sales person and a coach role play, we realized there was a big need for training centered around coaching that would result in improved performance.
Originally published in Twice Magazine
You approach the service counter of a typical retailer, any retailer, armed only with a defective product and the extended service you purchased on it. You recall back one year ago when you purchased the product. The sales associate spun a glowing tale of being able to take care of you and your product for an additional three years beyond the manufacturer’s warranty. You were skeptical as it was explained to you about all the time, money and headaches that you would avoid if you bought their service contract. By the time they were done you were sold. You wanted the plan, you needed that plan. It was pricey, but the peace of mind it provided was well worth the investment. Besides, the sales associate was just so darn sincere.
Fast-forward one year. As you make the long walk to the customer service counter, it starts to resemble a scene right out of a Clint Eastwood western. You receive a steely look from the person working behind the customer service counter. You imagine yourself in the center of town on a lonely, empty street while tumbleweeds roll by.
Here’s a little quiz to test how well your company is managing the returns problem. As fast as you can, name the person who runs Store Operations, Marketing, Merchandising, Returns Manager (not the Centralized Returns Manager or the Warehouse Manager). If you struggled on the Returns Manager join the group. Most companies don’t have someone who manages the returns process in its entirety. But why not? Returns will be a major factor influencing the profit of your company. Why a returns Manager? For the same reason you have a store manager or District Manager, to manage the company’s assets. Before you dismiss the idea of a returns manager, write down last years $ figure for returns. A returns manager should be able to reduce this number by 20%! Now is it worth it? An effective Returns Manager must interact with the following organizations on a daily basis to successfully manage and reduce returns: Manufacturer/Buyer, Marketing, Finance, Whse., Store Ops/ Field Reps, MIS, Human Resources, Training Dept., Repair Service, Delivery Dept., Replenishment and Loss Prevention.
Companies fail to substantially reduce returns because they let each of the aforementioned groups, do their own thing instead of appointing someone to coordinate efforts and follow the process all the way through. The return problem actually starts before the merchandise is purchased from the manufacturer and continues through to the end when product is returned.
Returns occur during one or a combination of five different phases:
To reduce returns and improve margins you need to treat returns as a business and manage it as a business. People who believe returns are a cost of doing business are living in the dark ages! Returns are a result of not managing your business properly. High Return Percentages are shouting to you that something is wrong with how you are handling the customer and/or the merchandise. Returns are not only a drain on profits but also on future business as the improper handling of a return can and will cost you customers. All the same problems exist for the manufacturer, my question for you, whether you are the retailer or the manufacturer is this:
Who is managing your returns?