Could Retailers Sell More by “Selling” Less?
2 Feb, 2017
Retail Sales. Those two words conjure up images of slick used car salesmen or high pressure boiler room tactics just to lure you into buying whatever I’m selling. Cue scene of Alec Baldwin in Glengarry Glen Ross giving his “motivational speech” about A-B-C.Retail IT solutions seem to be hyper-focused on the act of selling—upsell, cross-sell, bundling, dynamic promotions, customer lifetime value, market segmentation, units per transaction, conversion rate, etc. Additionally, most corporate metrics and incentive programs reinforce priority attention to these concepts quite explicitly. And this does get results.
However, if the processes, tools and training we provide to our retail sales people solely focus on maximizing the sales transaction, we’re missing a key opportunity for customer engagement.
We’ve all had those retail checkout experiences where the sales person nonchalantly attempts to snag our email or phone number for no good reason other than to feed a marketing database. We’ve come to accept our role as a walking wallet from which retailers seek only to harvest revenue. It is just a necessity of commerce. So, our shields remain up and our opinions steeled.
For high-touch retail experiences, this creates built-in tension, mistrust and sometimes outright dread. Remember the last time you rolled into a car dealership or furniture store simply to browse (or “showroom” if we’re being honest here)—and that sinking feeling when you noticed the grinning salesman swiftly striding your way with eyes locked on you like a cheetah stalking a gazelle on the savanna.
In scenarios where the product is complex and not widely understood by your customers, creating the best customer experience requires education, guidance and empowerment. Having the customer walk away with something that’s not a good fit, regardless of the price, is never an optimal outcome. At best, a dissatisfied customer will return the item. Worse, the customer will shout from the mountain tops about the immoral crooks who sold him a cheap, lousy product.
There’s a delicate balance between tools, process and training which few retailers have managed to crack. One such company is Discount Tire. (Full disclosure: I worked for Discount Tire prior to joining Applexus in April but more on that in a subsequent post!) Discount Tire is the largest independent tire retailer in North America and has been going strong for over 50 years. When founder Bruce Halle opened the doors of the first store in 1960 in Ann Arbor, Michigan, he knew that trying to differentiate by product in a commodity market was a lost cause. Instead, he chose to focus on the customer experience as a differentiator.
Automotive Service Retailers as a whole lie somewhere between Lawyers and Members of Congress in the public opinion pecking order of untrustworthy characters. Some of that reputation is due to a few bad actors but mostly it is due to the perceived feeling of helplessness and fear of being taken advantage of in a vulnerable state. Unfortunately, some retailers unwittingly reinforce this fear despite their best intentions if the aforementioned “maximize transaction value” motives are baked into the process, tools and training—creating a sort of self-fulfilling prophecy in the eyes of the customer.
Discount Tire’s strategy is to create a very informed customer. When the customer is more informed, the conversation shifts from a purely price-based to a deeper value-based conversation. Tires have an astonishing variety of attributes and features which vary across style, brand and manufacturer. Discount Tire views their role as a Guide to help the customer match and prioritize those attributes to the customer’s specific needs.
In many cases, the best tire for the customer is rarely the highest price tire. Rather, the informed customer views price as a relative factor among the other relative qualities of the tire. Along with that price relatively comes a better appreciation for the relative value of other features such as wet weather traction or stopping distance. As a result, the average transaction is higher than if price were the sole factor. In this case, the higher transaction values are completely the choice of the informed customer as opposed to some crafty marketing or confusing promotion. The informed customer is an empowered customer and a happy customer. This is evident by Discount Tire’s impressive Net Promoter Score consistently in the 80 percent range.
Helping to educate customers, honestly and openly, in high-touch retail settings is becoming simple table stakes. There are plenty of technology options in the market to bring consultative and educational components in-store, but those are not enough by themselves. It has to be rooted in a mindset first. Discount Tire invests heavily in training employees how to be that Supportive Guide for the customer. That helpfulness is part of the DNA of Discount Tire and creates real differentiation that’s not easy for competitors to duplicate.
If you have an idea in this space or just want to brainstorm on this topic, please reach out to me. I promise no heavy-handed sales tactics. I’m not a salesman—but we just might be able to turn your crazy ideas for empowering your customers into a living, breathing thing quicker than you’d think.