Posts Tagged ‘commission’

The Budget Friendly Customer

October 11, 2011

Although there are jobs with commission–with customers who have admittedly deep-pockets–and other jobs which congratulate or reward employees with huge sales, there is an underlying truth which isn’t always discussed. You see, greeting customers is a random process, not as hard as winning the lottery, but roughly the same idea. You don’t know, when you walk up to a customer if they’re going to be rude, crude, and brusque–well sometimes you actually do. In any case, you also don’t know when you walk up to a customer if they’ll be money-bags or moth-balls–well sometimes you actually do.

So what’s the point? Even if you are a great salesperson, and you get a customer to spend their entire budget–let’s use percentiles–so 100% of their available budget. If the customer has $1000 to spend, than you’ve made some good money.  (Of course, if you make 3% commission on a $1000 sale, that’ s just $30, so you better get on with the selling!) Yet, if a customer only has a budget of $200, then you may or may not consider them cheap compared to the $1000 customer. If their budget is less than $100, then surely you’d be silently spitting upon them, right? This is the point, you can’t gauge the budget of a customer, you don’t know how much money they actually have to spend. So when you pat yourself on the back because you were able to make the customer spend $500, is that because of your skill or because it’s well within their budget?

I think it would make more sense if you consider a customer’s total budget, and how far into that budget you’re able to hit. because you can’t get a customer to spend $500 if they only have $200. If you get a customer with a budget of $1000 to spend $500, and you get a customer with $200 to spend the entire $200–which customer have you truly capitalized upon? Although I believe acknowledging sellers who hit high numbers, I also think we need to take into consideration if they just randomly hit the jackpot, or just ran into a customer who had a lot of money, and they just barely skimmed the edge of that budget.

I bring this up because of the power of money in retail. It makes the customers look at salespeople like they’re only worth as much as money is spent, but the same can be said about salespeople towards customers. In all reality, there is some respect to be found. There are some salespeople who find out how much their customers are able to spend, and help them work through that amount. This definitely takes a great deal of skill, because can you really help a customer find an outfit for less than $100? It’s ridiculously easy if they’re willing to spend $500. So just where does your skill really lay? Does it matter you can make huge sales? Or are you just ‘lucky’?

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Retail: The Point

September 19, 2011

The Point is when customers come in, we don’t expect them to buy, we don’t force them–we hope they desire or want what we have to offer. That is our relationship. Somewhere along the line, stores started to add ‘benefits’ to attract the customer. Great customer-service is one thing, slavery is another, but when you add in things like commission, then you begin to enforce this erred system. If people know you are benefiting from their purchase, they know you are worth ‘money’ to them. They know you must cater to them, please them, and find them just what they want to purchase, so you make money off of this. Even in situations where there is no commission, but customers perceive you to be working off commission they treat you differently. They get offended when you’re too friendly, because they think it’s fake. They don’t want to feel like you’re forcing yourself to help them, and they often take genuine help as a sort of contrary–you can’t actually be helping them because you want to, can you? This is how far the simplicity of The Point has gone.

We no longer live in the purity of a system where we provide something you desire, and thus you purchase. We live in a system of competition, most often aganst other companies, but always against ourselves. With modern-technology, we question how many people have visited our stores day-to-day, week-to-week, and year-to-year. We scrutinize numbers, believing them to have the answers, like a Holy Grail. If in the age of mystery, legend, and magic, we could not find the often symbolic, mythical Holy Grail, we will definitely not find it in number crunching. Sure, we can contemplate how to get more customers into our stores. We can consider how to get more people to buy things, but in this process have we lost the Point? In all truth, have we lost the true Holy Grail, which was a simplicity of terms and ideals. It was not mystery and complexity, it was truth hidden before our very eyes. The magic is the fact its not hidden at all, its hidden in plain view.

The technological-age has given us and companies the idea that privacy no longer matters, that customers aren’t just customers while they are in the store, but anywhere and everywhere. We can argue our customers are wearing our clothes, and thus carrying our store with them–as conceited as that may sound. We can argue customers are thinking about our store, and having an online brand is essential to fulfill their needs at any time of the week, day or night. Are they our customers while they browse our websites? Maybe. Are they just our customers the moment they press the buy button? Surely.

The moment we ask customers to fill-out a survey, giving them our name, we lose the Point. If a customer deems our service so commendable to actually fill-out a survey, that should be entirely under their purview. In all honestly, our society and the people whom live within it have only learned to use surveys and reviews for personal uses, often as their own complain box. The impetus for a customer to write something positive is far smaller than it is to write a complain. If we could scale it, I’d say positives are worth pennies to customers, and complaints are worth dollars. They believe in the power of complaint and the smallest irritation is more reason to complain than great customer-service. Ask yourself, to you remember more the salesperson who finds everything you want, and gives you great customer-service or the one who doesn’t do it? Do you remember it because you expect this level of service, that you feel it should always be met and reached? And in all honestly, how often do you even receive this level of service anywhere you go? Yet, it persists in your mind. Yet, you still believe in this level of superior service, and don’t acknowledge the fact it happens far less than it should. Some people say we believe in luck as long as it happens at least once, even if it is one in every thousand. Do we believe in great customers service being the norm, too?

The moment we ask customers to sign-up for a credit card, we lose the Point. I can say any time a store asks me for a credit card, I can just reply with, “Do you have a credit card with this company?” Odds are, they will say no. Odds are, they’re trying to sell something they only ‘know’ about by reading and training. These people aren’t selling something they understand or use. This isn’t like clothing, where you can wear, relate, and communicate to customers to sell in something you believe in. On the rare occasion someone offers me a credit card and has on, we can have a real discussion. Otherwise, this is yet another conundrum retail has created for itself.

The moment we ask customers for an e-mail address, we lose the Point. Sure this is a new age, and a new step forward. We can now send receipts to customer e-mail addresses. Now they can never claim it has been lost–unless it’s a gift, which they’ll solve or have already solved. In the long-run, this will save more trees and create less trash in a world direly in need of eco-friendly methods and ideals. Yet, customers also know this is a step into the ‘privacy’ of their lives–will the receive unwanted e-mails now? Will your store intrude into their personal lives? Sure, you think they’ll think about your store more. Maybe you’ll get more customers to come in. Yet, do you have to ask them to give their e-mail to you? There are many ways to get e-mail addresses from customers, it is how and when you do so which makes a huge difference.

We do not ask for anything from customers, we never should. Our relationship is clear as water. We provide merchandise, we help them find what they want, we help them desire it, and we help them purchase it. The intimacy of that relationship ends then and there. Yes, customers become living advertisements for our clothes. Yes, they can use word of mouth. Yes, they are the power, the electricity that powers and keeps stores alive. Yet, they do so at their own feeling. They tell people because they want to. They’ll wear that perfect outfit when they feel like it. Do you not see, some companies will think of ways to force customers to share their ‘love’ with their friends, they’ll find ways to make customers wear their clothes. This is the greed, the want and the desire of the company, without putting into consideration the customer. This is where the clear water becomes muddied, thick, and filled with grease.

Those who truly understand the Point, these people carry the Holy Grail. This is the Galahad you want by your side. You want someone who understand to just help the customer find what they want. This salesperson will make the customer love what they want, because they love it, not because they have to. Not because they receive e-mails about discounts, not because their credit score is now under your influence, not because you give them the power to complain about your flaws. No, your Galahad will fulfill the needs of the customer and that is all you need. You don’t need to force-feed people to make them happy. Imagine a company whose entire wealth of popularity and fame is based on it’s customer-service–not slavery–but service. They don’t ask anything more form the customer than to see what they have, and to hopefully fall in love with it, and leave with bags of love. This is the company which will not fail. This is the company which shall survive. This is the company which desires to be reborn.

Socratic Retail Method

July 11, 2010

Introduction
Mentor: Tell me, when you work in retail, where do your paychecks come from?
Pupil: Your employer?
Mentor: Yes, but where do they get the money to pay you?
Pupil: Hmm. They get money from money they make?
Mentor: Very good. How do they make this money?
Pupil: By selling the product they carry.
Mentor: What if they do not make money selling goods?
Pupil: Then they have no money to pay their employees. But if they make a lot of money, where does that go?
Mentor: Ah, you are getting ahead of yourself, my pupil. It is true, if they make more money, one thing they can do is hire more workers.
Pupil: Why?
Mentor: The more money they make generally means they need more help to produce–more people to unpack and replenish clothing, more salespeople to sell, and more cashiers to take the money.
Pupil: Oh, I see.
Mentor: Although each aspect is important, what part do you think is more critical? The replenishment, the salespeople, or the cashiers?

Cashiers
Pupil: The cashiers.
Mentor: Truly?
Pupil: No?
Mentor: What do cashiers do?
Pupil: They take money from the customers, and this money is used to pay the workers.
Mentor: What influence do cashiers have upon the customers?
Pupil: They take the money.
Mentor: Do they help customers find products or fill their needs? Do they help build the sales?
Pupil: No, I do not think so.
Mentor: Although there are very skilled cashiers who can add-on to sales, and generally, they do not directly interact with more than one customer at a time. They cannot multitask multiple customers at once.
Pupil: This is true. Do they not also offer discounts and coupons which also decrease the amount of money made?
Mentor: Very good, you have kept up with your studies. Cashiers have the duty and responsibility to lower the amount customers spend, thus lowering the total profits. This done multiple times, through many transactions can have an overwhelming effect on total profits–imagine if they gave 15% off all transactions. Cashiers have an important role at the end of the process, because without them, we could not complete transactions, but they are not most critical to the success of selling.

Stock
Pupil: What of the stock-people, they are the beginning of the story, without them the product cannot even be found.
Mentor: Yes, they are important. They unpack the clothing, preparing it for the floor. They replenish the clothing when it gets low. Without them, supplies run low. But how do they directly influence the customers?
Pupil: I do not know.
Mentor: Even with a fully stocked table, that does not directly entice a customer to buy anything. It is like a piece of art in a museum to look at, but you need someone there to guide you through the painting, to understand what you are looking at.

Salespeople
Pupil: So the salespeople are important?
Mentor: In retail, which people often receive commission as a part of their job: the salespeople, the stock-people or the cashiers?
Pupil: The salespeople.
Mentor: Why?
Pupil: Because they directly interact with the customers, helping them to find product they are interested in, building outfits and adding-on product before the customer gets to the cashier. And many salespeople are skilled at multitasking multiple customers at one time.
Mentor: Very good. Customers have already made a majority of their buying decisions before they even reach the cashiers. And with discounts, coupons, and other additions, which subtract from the total sale, cashiers have less impact on increasing sales compared to salespeople.
Pupil: And salespeople can ask stock-people to help find product that is missing on the sales floor.
Mentor: Yes.
Pupil: Do salespeople receive credit for these actions?
Mentor: In some businesses, they do receive commission. Or they receive acknowledgment for their sales above and beyond the normal. The salespeople work hard get to know customers, to add-on sales, to bring profits directly into the store so the cashiers, the stock people and other salespeople can be paid for their labor. They can directly influence a customer that is ‘just looking’ into someone who ‘spent more than they expected’. They directly help customers that don’t know what they are looking for. They help customers find the perfect gift for a loved one, and something extra for the customer, too. They bring additional value to each customer that makes a purchase.

Query 1
Pupil: But is there not businesses that only recognize cashiers for giving discounts to customers? They receive acknowledgment for lowering the store’s profits. Why don’t the salespeople get acknowledgment for building the sale which got the customer to the cashier?
Mentor: If you were a salesperson who worked hard, building up a sale, getting to know a customer and making sure they left happy, how would you feel if you were dismissed and forgotten, and a cashier is recognized for signing someone up for a credit card and giving them a discount off of your hard work?
Pupil: I would be saddened and demoralized. I would feel like my work isn’t worth anything. Why do cashiers get recognition for every credit card they get, but salespeople do not get recognized for every single sale they make? They are the ones helping fill people’s paychecks and keeping them employed!
Mentor: Calm yourself, my pupil.
Pupil: I am calm. It just doesn’t make sense. It is illogical.

Query 2
Mentor: What happens when a cashier is processing a card or giving additional discounts that take a long time to process?
Pupil: Salespeople are asked to cashier? They must back-up the registers.
Mentor: Yes, and what happens to the customers that are ‘still looking’ or need help finding products?
Pupil: They are left ignored and forgotten? So the sales floor is left empty, while everyone is at the cash registers, customers are left with no one to help them…
Mentor: Yes, go on. What happens?
Pupil: So the remaining customers will buy less?
Mentor: And many may leave because they did not receive ‘customer service’, all the while this happens, all the additional manpower is taken to the cash registers for the sake of giving an additional discount.
Pupil: And the ripple of one discount means less money for the store… And by the time the line of buying customers is gone, there are no customers left in the store who need help, because they are not going to wait for a salesperson that isn’t there when they needed help.
Mentor: Yes. But if people are only given credit and recognition for giving discounts, and signing up credit cards, and no recognition is given for making sales, would not all the effort go towards the cashiers? And effort towards selling would diminish.
Pupil: Why would any business do this? They would be choking the life out of their own sales. It would be like Ouroboros, the dragon who swallows his own tail. A business like that cannot hope to be successful.
Mentor: What business would be successful?
Pupil: One that prioritizes selling. One that emphasizes and recognizes salespeople as critical and crucial to the life of the store. A business that knows and understands selling and the skill of adding to sales is more important than giving discounts.
Mentor: Very good. That is why we went through this exercise. Hopefully you understand a little more about selling now.

Mentor:
Pupil: