And 3 Actions That Will Make A Difference Immediately
Reason No. 1: Owners focus on procurement and advertising and are no longer involved in the actual sales process.
In sales, the streets are paved with gold.
The traditional sales process – where each sales person does his job as he thinks best and as best he can – is a thing of the past! The number even well known and established furniture retailers which have gone out of business in 2008 and 2009 are living proof for this. But who actually is responsible for long term strategies in a company? – The entrepreneur himself.
A retail company is about procurement and sales. If you run a furniture store, please stop for a moment to think about the following two things: How many hours of your working time last week have you spent on advertisements, procurement and administration? And how many hours of your working time last week have you actively worked on optimizing your sales process?****
In the “good old days“ a furniture shop owner would welcome customers personally at the entrance and know many of them in person. Unlike today, customers back then would not travel several hundreds of kilometers and have a look around in 3-5 different furniture stores to buy a matched set of sofa and armchairs. The owner would ask the customers about their wishes and would then hand them over to the sales person who in his opinion would be able to provide the best consultation with his particular personal and professional skills. Towards the end of the sales conversation, the owner would once again join in to the discussion, ask the customers whether they were satisfied or whether there were still hurdles to overcome. Then he would steer the discussion towards closing the deal. And even if the deal could not be closed, the owner would exactly know the reasons.. This is the prototype of central sales control. Closing rates were extremely high, advertising cost low and sales efficient.
Later, owners started to increasingly leave sales stranded. Exhibition space became larger and larger, owners would increasingly be tied up in procurement, advertising and administration and banished to their offices. They would focus on presenting appealing show-rooms and ensuring a high number of visitors just hoping that sales people would make the best of it. And they did. As best they could.
Sales people would move about in the exhibition as they saw fit (or they would sit behind an infodesk ). They would only pick those prospects from the large number of visitors to contact who they considered to be of potential. Alternatively they themselves would be contacted by customers who were interested in a particular product. Because visitor frequency was high and cheap at that time, the decision whether and who would be contacted and served, what would be sold and how to proceed with prospects who were unable to make up their minds was left to the sole discretion of sales staff.
Ever since then sales people and visitors have started to move about in the exhibition in parallel rather than interacting in a controlled manner. The sales process is only checked once at the very beginning and once at the very end: The number of visitors entering the store is automatically captured at the entrance and the sales contracts will be processed in the computer system. In many cases, the number of customers are not even counted at the entrance and shop owners can only judge their performance based on the number of cars in the car park and good turnover figures.
The number of visitors has been constantly decreasing by 5 - 10% annually over the last couple of years. Most medium-sized businesses might not know the dimension exactly because they either do not have a light barrier or do not take readings from it. But they definitely all feel the decrease in visitor numbers.
If you want to change the sales process in your business, you – the entrepreneur – will need to define what the process should look like and then ensure that it will be implemented. Nothing will change on its own or by you booking sales trainers for isolated training sessions („Please do training on objection handling – my sales staff need to improve on closing deals.”) If you want your sales people to change their behavior, you personally will need to change yours first.
reason No. 2: The sales process is not being measured. However, you can only manage what you measure.
Most furniture stores ride without fuel gauge. That is why some of them come to an abrupt halt.
A standard question that I have been asking furniture store owners over years now is how much fuel their car needs on average on 100 km. Normally they answer this question promptly and to the second decimal place. Then I will ask them how many visitors they need in their sales process to generate 100.000 € turnover and will be confronted with questioning looks. – Their fuel bill does not even account for one-tenth of a percent of their overall cost, advertising cost on the other hand account for as much as 5 – 7 %!
How do you want to improve something you cannot see?
In most cases shop owners do not know what percentage of visitors is actually being contacted, how many sales consultations take place and what comes out of these consultations. So, we do not even know the number of necessary activities. Planning is based on business ratios such as “X sales people per 1.000 sqm exhibition“ or on gut feel only. People hope for a relation between input and output: “If I manage to attract a high number or visitors and have a lot of sales people, that will generate high turnover figures.” The turnover generated from a given number of customers is called closing rate and it will determine over the next years which medium-sized furniture stores will survive and which won’t.
The sales process determines how efficiently deals are being closed from the number of visitors in a particular furniture store. If you ask sales people or heads of sales when and how exactly customers will be contacted, consulted and deals closed, they will usually answer: “That depends, every customer and every sales person is different after all.” – In plain language “that depends” means that there is no clearly defined sales process and that it s to a large extent determined by the customer.
Questions, such as “At what point in the sales process do we lose most customers?“, “On which days and in what kinds of situation?” , ”How does this happen?“ and “What can we do about it?” cannot be answered. You will never be able to improve an undefined and uncontrolled process.
You will only be able to improve your closing rate if you start to measure it.
Closing rates (measured as number of sales contracts and cash sales divided by the number of visitors) range from 3% to over 40%. However, as much as even smallest cost items are being compared and optimized throughout the association of furniture retailers and in all experience exchanges, nobody seems to know exactly where his business stands in terms of closing rates.
Reason No. 3: Sales are not managed. – However, you will only Do things if you manage things.
It is only in furniture sales that individual sales people are free to determine whether, when and how they will contact potential customers and whether and how they will consult them.
Most visitors to a furniture store will not be contacted. Figure 1 shows the typical “sales funnel“ of a well-managed, medium-sized furniture store with approx. 12,000 sqm exhibition space. Sales trainings will only be able start out at column 2 “contacted, but not consulted”. We are actually losing two-thirds of potential customers (column 1 – “not contacted”) due to a lack of organization and knowledge.
And why is it that so many customers will not be contacted at all? Resulting from many thousands of unsuccessful approaches using the fatal phrase “Can I help you?“ sales people have come to the conviction that most visitors only want to have a look round anyway. In sales people’s jargon visitors are being referred to as “Lookers” who it is impossible to sell to no matter what. Sales people claim that they are able to judge at first glance whether a visitor will buy something or not. And they can - but only as a result of self-fulfilling prophecy. If a sales person approaches a visitor with this mentality, no sales training will ever be able to help. Instead of “Can I help you?” this sales person will use an even worse phrase: “You are ok there, aren’t you? And – surprise, surprise – the customer will confirm, wander through the exhibition „at long leash“ and leave.
The decision whether a customer will allow a sales person to approach him or not will be taken on the basis of nonverbal communication to a degree of over 90%
Most sales people start their contacting process by positioning themselves at a central point in the exhibition, or by waiting for visitors behind their desks (it is a peculiarity in furniture retail, to consider a desk to be the workplace for a sales person), and watching them until they have “ sunk their teeth into a particular product” (quotation by a furniture store owner).
A customer who is confronted with passive sales people who are only watching him either sitting down or standing up will be convinced that “there they are not very busy here!.” And he will immediately jump to the conclusion: “If I allow any of them to start talking to me, I won’t be able to get rid of them anymore. And I don’t even know whether I really want to buy anything yet. “
Nobody likes being watched. The longer a vistor feels watched, the more he will start to ask himself: “Am I not good enough for them? Don’t they want to sell anything?“. As soon as the visitor stops to have a closer look at a particular product (and a sales person sees it and happens to decide that this visitor has sufficient potential), a sales person will approach him with an offer for a consultation. Approaching people from beind is never a good start from a psychological point of view. Besides, 9 out of 10 customers do not want a consultation initially and will decline the offer.
As soon as a customer says what he is looking for, the sales person will take him on a “grand tour“ of the exhibition.
To determine the customer’s requirement, the sales person will usually ask him 2-3 alternative questions, so he can narrow choice down a bit. For a matched set of sofa and armchairs for example the questions might be: „should the style be more modern or rather classic?”, “leather or fabric?”, “three piece suite or rather a corner seat solution?”, “additional functions required or not?” Once these questions have been answered, sales people will show the customer furniture at random to find out what the customer likes. In other words the determination of customer requirements is happily mixed with product presentation and the customer will be utterly confused by the sheer quantity of things presented to him.
People however can only really decide between 2-3 alternatives. This is why customers will flee from the store using excuses like: „“We will need to think about this some more.”
If you want to change the sales process, you will need active leadership on the sales floor.
It is not sufficient to just train any particular sales process. New behavior patterns will need to be developed together with managers and sales people first and then jointly be implemented and controlled. The tools that a sales training can provide are simple. It is the execution that will make the difference.
If a sales person has approached customers with the fatal “Can I help you“ phrase for more than 90,000 times in his life, he will need active,daily support on the sales floor in order to get rid of this habit. The knowledge and the tools that a one-off sales training will be able to provide just won’t do. All actions that we have repeatedly carried out for more than 1,000 times (driving a car, brushing our teeth, but also approaching customers) will enter our subconscious and we will start to fly on autopilot.
Reason no. 4 : Management does not lead but rather administers.
Management administers and criticizes – but will be unable to really help sales staff further.
In the past, the best sales people who showed sufficient sense of responsibility to not shy away from administrative tasks would be promoted to shop and division managers. Administrative tasks would then gradually take up more and more time and the amount of time managers could spend on actual selling would decrease. And while managers themselves often have an excellent stock of sales skills they would not be able to say how and where they gained these! Neither would they be able to clearly define what it was that has made them successful, nor could they convey these skills to others.
Duties and responsibilities of a regular manager are: Human-resource allocation planning and maintenance of the exhibition, also they support the owners in procurement and advertising matters and other administrative tasks. The head of business will immediately notice if they failed to complete any of the required tasks. It is important to control the sales process in much the same way as well. However, this is rarely considered urgent and something that shop owners tend to be oblivious of. That is why sales control will usually fall by the wayside.
Most managers will show a lack of understanding, come up with demands and utter a lot of criticism if faced with poor sales performance. Statements like “One would think that these sales people could think of contacting customers on their own!“ or “Now, why did you let these visitors leave? ” will result in sales people forgoing their line managers. When confronted with poor sales performance, a helpless “You will just need to try harder” is usually the only advice that managers will come up with. Unsuccessful sales people will be criticized but not offered help so they could do things better next time. Managers just hope that “the sales person will soon recover and show better results again.”
Leadership is supporting direct reports in doing a better and more successful job tomorrow than they have been able to today.
Most furniture retailers and managers feel helplessly at the mercy of decreasing customer frequency because they do not have good advice for their frustrated sales staff. Leadership however, is supporting staff members to do a better and more successful job tomorrow than they have been able to today. But most shop owners and managers have not learnt how to develop staff; that was not required in the past. However, without this ability, they will remain administrators rather than real managers.
You do not expect a soccer coach to simply ensure that 11 players will be present for a match and give their best. You expect the coach to ensure that the team wins and will be promoted to a higher league. That is why the Execution Program starts with the shop owners and the management teams and then has the sales staff join in. It is the owners and managers who will have to change their way of thinking the most.
Managers Need to monitor their current way of selling first (actual situation)
Imagine, your administrative staff would individually decide as best they can, whether, how, when and with which quality standards and in which sequence they will complete their daily tasks. That would result in mistakes and inefficiency. Mistakes are immediately visible and will therefore be immediately fixed in financial controlling, processing, route planning and delivery. If a carpenter screws up cutting a kitchen countertop during assembly, he will be talked to at the end of the day. The carpenter as well as the organization will learn from that.
In sales, you will hardly ever notice mistakes! If sales people screw up by either not approaching potential customers correctly (or even not at all), or by showing them too many products, nobody will notice. The sales person will classify his failure as “These visitors only wanted to have a look round“and his boss will usually not even find out.
If we want to improve things we will first need to know what our situation is at present. You will have to monitor before each sales training, what your sales process is at present. How do your sales people approach customers? What happens next and how? This information forms the basis for any improvement.
Reason no. 5: Sales trainings usually convey knowledge rather than change behavior patterns. Knowing something does not automatically mean you will actually be able to do something.
But we’ve already had so many sales trainings!
In the past, sales trainings were bought like a miracle pill, that would be administered in homeopathic doses and should make sales staff “better“ in an unspecified way. Sales trainings usually did not have specific, measurable goals and took place mostly even without involvement of management itself.
Like in pressure fueling, sales staff would be presented with tools and tricks(rather than making sure sales staff could internalize contents). Handout material would end up in filing cabinets and behavior patterns would remain unchanged. And how should they be changed? If Michael Schumacher gave me a lecture on how to drive a car, I would still drive my car as I have always done on the next day, I would just know more about how to drive a car. What is worse is that most sales trainers are not really what you could call a Michael Schumacher in sales but rather people with good theoretic knowledge and little and mostly out-of-date practical experience.
The “Can I help you“ Mystery
Why do 99% of all sales people approach potential customers with the phrase “Can I help you?“ even though they know from various sales trainings that this is inappropriate? Several years ago, a sales trainer friend of mine was hired by a medium-sized furniture shop which has in the meantime disappeared from the marked, to train sales staff to use a more sensible and more effective approach phrase than “Can I help you?”. He spent four days in group sessions with the sales people to have them develop new, individual key sentences for customer approaches. Each of them came up with their own approach phrase, wrote it down on a small cardboard card and practiced it with differing sparring partners. At the end of the training session all participants were fully enthusiastic and committed to put their new approach phrases into practice right away.
After the training session, the trainer had a stroll through the sales floor and he had barely started his walk, when he a sales person approached him from behind saying “Can I help you?”. He turned round and saw a sales person, who had just come out of his sales training less than thirty minutes earlier. His flabbergasted question „What did you just say?“ was answered by the innocent counter question „ What do you mean?“ The man had been with the company for more than 30 years. If during that time he had contacted only 10 visitors per day on average that amounts to about 70.000 “Can I help you” approaches. Most people don’t even brush their teeth that many times during their lifetime! There is no chance whatsoever that you will be able to change behavior patterns that have been learnt and practiced for over 30 years in just one day of sales training!
Changing behavior patterns – one change per month
Another mistake in traditional sales trainings is that they try to change everything at once from approaching the customer all the way to closing the sale. Participants are highly motivated and determined to change EVERYTHING – and change NOTHING! Have you ever participated in a seminar that you came back from with a long list of action points and new ideas, only to wonder about one year later, where you placed the file with all the seminar handouts, which you wanted to work through one more time?
Changing behavior patterns effectively only works in intervals of small steps. Each new step needs to be practiced thoroughly and consistently over a period of about one-two months before you move on to the next step.
Reason No. 6: Sales trainings drill people on empty phrases and sales.
How does communication work?
If you talk about emotions and attitudes – and that’s what sales is all about – 55% of any message is perceived via body language, 35% via the tone of voice. So, more than 90% of our communication effect depends on how we say something. That leaves about only 7% for the contents of or message, i.e. for what we actually say. Even more so if the contents of what we say is at odds with our body language and our tone of voice. This goes back to a frequently quoted statement of the psychologist Albert Mehrabian from 1967.
The recipient of our message automatically checks our body language and tone of voice for thousands of distinguishing marks. Then his subconscious will take a decision: “Do I like this person?“, “Does he want to do me good?” , “Can I trust him?”. This decision will not be taken consciously but can be made out only as a feeling and it determines how the recipient of any message will react further. The sender of the message is only able to influence the smallest part of these thousands of distinguishing marks,
What is it that sales trainings work on?
Sales trainings change the contents of the things to be said, they create new empty phrases. They will however not work on changing the emotional attitude a sales person has towards a customer. These new phrases are at odds with the attitude of the sales person. The sales person therefore is insecure, does not appear credible and is thus no longer authentic. It is exactly these contradictions between content and attitude expressed through body language and tone of voice that people will instinctively react to. This has been a known fact in psychology for some 40 years already. So why is it that sales trainers still meddle with the 7% content while completely ignoring the basic attitude?
Staff members need a clear goal and a plan, which they can systematically work towards.
Selling successfully is not witchcraft, it’s a process. It is the systematic implementation and optimization of a process that will allow us to unhitch success in sales from mere chance. First of all, the sales process needs to ensure that the customer will open up and be prepared to actually talk to the sales person. Only once this has been accomplished can you start to actually determine the customer needs, his current situation as well as his wishes and dreams. Instead of simply presenting pieces of furniture, to lecture on them and to hope for a lucky shot, you will then be able to plan the perfect solution for each individual customer. And the market will be ready to pay the price for the added value you will thus be able to provide.
Reason No. 7: Closing the Deal is at the centre of the sales process from the very beginning – the customer is scared away.
Why many customers will not be approached at all or reject the sales person with an “I am just looking“-excuse.
Nobody really needs furniture!****- Why not? Because we are living in an affluent society and we are selling luxury goods. More than 90% of all people strolling through the exhibition will not be left to sit on the floor if they do not buy a new couch – they already have one! Likewise, the visitors to our kitchen department have not cooked over an open fireplace so far, they already have a kitchen. And even if they don’t – it is ever so easy to purchase furniture in good condition from our friends or via ebay. We fulfill wishes, not demands.**** And everybody has an unlimited amount of wishes – quite opposed to a very limited budget. And we are in competition for this limited budget with the travel agency, the car dealer, the fitness studio, the orthodontist, the worry about the future etc.
The customer will usually come to the store to have a look at furniture, but by no means with the clear intention to actually buy something. However, visitors claim that “they could be inspired to buy if everything fits perfectly.” Our own customer surveys carried out at the entrance of furniture shops as well as a study of Möbelkultur trade magazine confirm this. In our surveys, 8-9 out of 10 visitors answered the question “Are you looking for a professional advice?” with a clear “No”. Their plan is to tour furniture stores until they happen to find exactly the right product in the right color and combination in the exhibition. Most people are not aware that they miss a cornucopia of variety, that they could find in actually having an expert consult them on all the different possibilities and varieties that are available but that are not readily on display.
False Goals – scared off customers and frustrated sales people
A sales person’s natural goal is selling. And that as fast as possible. The plan is to either pproach the customer and to enter into a consultation ( “Can I help you?“ is an offer for a consultation) or to leave the customer at long leash until he seems to have found roughly what he was looking for and to enter into a consultation then.
It does not matter which key sentences he has learnt during his last sales training, more than 90 % of the message that he gets across to the customer (body language and tone of voice) say: „I want your money. And I want it quick. “ The customer’s natural reaction is rejection. The sales person gets more and more frustrated as a result. I have had sales people tell me that it seems to be a new kind of sport to take strolls through furniture stores and waste sales people’s time. And they were serious about this. Many are of the opinion that “customers are getting more and more difficult and nasty”. The customer’s rejection of sales people is not a natural law and is definitely not a result of changed customer behavior. The behavior is just a natural psychological reaction of both parties to an awkward approaching process.
The solution – Take one step at a time!
Rather than learning new key sentences, a sales person will at first need to include the technique to truly establish a customer relationship to his sales process and be serious about it. If he starts to look at the sales process as a sequence of steps in a stair which he will need so systematically work off without constantly peeking at the big reward at the end , he will start to relax and so will his customers.
The first step of any sales person is approaching the customer is such a way that he will actually feel welcome and comfortable. The customer should enjoy talking to the sales person, irrespective of the his furniture expertise. Once this step has been climbed, more than 90% of all visitors will tell the sales person what it is they are looking for. And if the sales person then manages to overcome the reflex to immediately present furniture, but rather takes an active interest in the customer’s situation and individual wishes, he stands a big chance that the customer will open up and provide him with valuable information so he can provide an expert consultation.
If sales trainings do not get me anywhere - what should I do instead?
To improve your sales performance you will need to work on the following three basic requirements. Sales trainings are not useless as such, but they need the correct general framework to make a difference.
Action Point No. 1: Measure!
Buy a light barrier. This is an investment of less than 100,00 €(do not let yourself be talked into a more expensive solution). If you do not know what to buy, please feel free to contact me for advice (witt@thomaswittconsulting.de, phone: 0172-6960006).
How do you translate mere light barrier counts into the number of visitor groups? You can either position an apprentice next to your entrance door for a complete week who captures each visitor group, each sales representative, each staff member entering the building through the front entrance (again, please feel free to contact us for a free-of-charge advice) . That is how you obtain a correction factor, which will enable to you to translate the mere light barrier counts into the number of actual visitor groups. But you can also get to the same result much easier by simply applying our empricial formula. Just divide the number of light barrier counts by 2.3 to get a good estimate of the number of visitor groups.
Once this has been completed, you need to collect the following operating figures and have them reported to you on a daily basis:
- Number of visitor groups (B)
- Number of sales contracts and cash sales (A)
- Furniture sale turnover (U) (excluding turnover generated in the boutique and catering areas)
- Number of sales contracts divided by number of groups of visitors (A/B*100 = closing rate in per cent)
- Turnover divided by number of visitor groups (turnover per group of visitors)
If you are interested in reference data from the furniture trade business and want to know where you stand, you are more than welcome to contact me (witt@thomaswittconsulting.de, phone: 0172-6960006).
Action Point No. 2: Sales control – empower the management team!
Training your sales staff is important, but what is much more important is sales control. And sales control only works if you have people in place who are actually able to act as sales controllers. Do you have those people? If you don’t, then you will first have to either qualify your current management team accordingly or develop sales controlers. Each soccer team has a coach. What does he do?
- He will make sure that players will improve in between games by systematic training.
- Before each game (i.e. a day of sales) he will discuss the team lineup and tactics with his team.
- He will make sure that his team is in the best possible emotional state before each game.
- He will watch the game from the outside, provide guidance and correction.
- After each game, he will analyze the run of play with his players, encourage them and discuss items to be learnt from the game.
- Based on the new findings, he will improve the strategy for the next game and adjust the training schedule accordingly.
And this is exactly what a sales controller does with his sales people!
Training your sales staff without sales control is like sending your soccer team off to a lecture by Franz Beckenbauer****and hope that they will start to play better as a result. That may happen, but it is highly unlikely that it actually will.
Action No. 3: Implement clear processes and optimize them!
Say, what you do! Do, what you say! Measure it! Improve it! This is the mantra of process optimization.
Say, what you do: Only if you clearly define your sales process will you be able to improve it. If every sales person treats their customers as results from the relevant situation (“that depends…”), there is no clearly defined process and you will therefore not be able to improve it!
Do, what you say: Once you have defined your process, you will need to ensure that it is adhered to, so you can gather experience. Each new behavior pattern needs to be practiced for at least a hundred times before it will work automatically and run on auto pilot. It is only then that you will be able to determine whether the process has stood the test.
Measure it: If you have completed Action No. 1: „Measure” you already have data like closing rates and turnover per visitor group at your disposal. Any change in process should result in an improvement of these operating figures when averaged over a month. You can only be sure that it is worthwhile if this is the case.
Improve it. No process is ever ideal! Form a habit of regularly and openly discussing with your management team what works well and where you are still facing challenges. The best possible process is not worth anything if your sales people are not comfortable in following it!
Analyze the closing rate figures briefly with your management team on a daily basis and discuss your tactics for the next day. That will ensure that your sales team will become better every day.
What can we do for you?
For six years now, Thomas Witt Consulting GmbH has been working with furniture retailers in long-term programs to systematically increase their closing rates. Over a period of 12 months our customers increase their turnover per visitor group by 10-30%. That means a double-digit increase in turnover at unchanged marketing cost.
Our customer Philip Brügge says: “With Thomas Witt Consulting we at Möbel Brügge have been able to reduce our marketing cost by approximately 25%. The introduction of our new customers-win-customers program as well as the implementation of clear closing rate- and offer processes has lead to an increase in turnover at reduced marketing cost.”
If you wish to gain a clearer picture of where you stand with your business at present and which steps you could take to set up at more efficient sales control process I offer you a 90 minute strategy session free of charge. This offer is addressed to owners or managing directors. Make your appointment now under witt@thomaswittconsulting.de, phone 0172-6960006.
I hope this article has started to provoke some thoughts in your mind. Please do not hesitate to call if you wish to contemplate solutions together with me.
Until then I wish you excellent turnover figures!
Thomas Witt
Thomas Witt Consulting GmbH
Managing Director