Since founding The Friedman Group, a global retail consulting and training organization, in 1980, Harry Friedman has heard plenty of excuses from retail store executives who refuse to provide much training to their front-line store employees. One of the most common is: "What if I train them, and they leave?" Friedman says this is the exact opposite approach they should take. He suggests a better question is, "What if I don't train them, and they stay?"
Cost of Not Training
The unfortunate reality, which anyone who ventures into a mall these days can confirm, is that today's retail store employees often lack basic sales and customer-service skills. This is especially true at the big-box stores where management is unconcerned about high turnover, Friedman says.
Retailers that expect high turnover essentially ignore training but pay a price for doing so. "The decision to neglect training is typically made by someone at the top who does not appreciate the value of a human asset and what they can mean to sales and the bottom line," Friedman says. "Retail is a merchandise-driven business, not a people-driven business, after all."
Nevertheless, Friedman estimates that with more effective training, most retail organizations could increase sales 15 percent to 25 percent. "That's a lot of money," he says. "There's no chance they could hit those numbers any other way."
Management by Numbers
Individual store managers would no doubt also appreciate increasing the six to eight hours that Friedman says retail stores typically devote to training new employees. But since a boost in training time is unlikely to happen, store managers must focus on those aspects of employee management they can control. To start, he suggests looking at two key numbers.
The first is conversion rates, which means if a sales associate talked to 10 customers, how many bought something? "If you sold two out of the 10 people you talked to and you can bump that up to three of the 10 people you talked to, you've just increased your sales 50 percent," says Friedman, author of No Thanks, I'm Just Looking: Professional Retail Sales Techniques for Turning Shoppers into Buyers.
The second number is average sale per customer. "There are two ways to increase this number," he says. "One [is] by selling them the $40 item instead of the $30 one. Second [is by selling] the customer the $30 [item] and also $10 in batteries to make it work."
What Seems to Be the Trouble?
Armed with this information, store managers can then determine which sales associates are performing well and which aren't. The next step is to uncover the source of any problems.
If you have one sales associate with a low conversion rate, for example, you need to determine whether the problem occurs when the associate is demonstrating the merchandise or when he is trying to close the sale, Friedman says.
"You might find out it's up front," he says. "[The associate] keeps approaching customers and saying, ‘Can I help you?' and the customers say, ‘No thanks, I'm just looking.' It doesn't matter whether he can close, because he's not getting out of the blocks in the first place. That's the opportunity for the manager to intervene and explain to this guy that he's using a terrible opening line."
Hit the Floor
This type of hands-on coaching leads to another of Friedman's suggestions for store managers: Get into the fray.
"The biggest missing ingredient I see in retail today is that managers are not running the store from the floor," he says. "A lot of managers are either too busy with operational paperwork or making sales for themselves to do more than just hope their salespeople are doing a good job."
The best store managers, Friedman says, are always "pointing, pushing, doing and working the floor. They listen in, see how employees behave and what they say so that they can step in to reinforce the good behaviors and correct areas that need improvement. A good store manager is like a cop with a whistle directing traffic at a busy intersection."