Are you leaving money on the counter?

By Mike Dandridge

A FIER ALL. you've alreadY made lA.the investment to get the customer into your store. It onlY makes sense to optimize each sale.

But. many times the customer is prepared to spend more than the counter sales representative (CSR) is prepared to sell. By paying attention to what the customer is ordering and asking questions, it's often possible to increase the sale and provide a more satisfying customer exPerience.

Unfortunately, many CSR's don't sell. They just take orders. In most cases, it isn't their fault. It's because they don't know how. No one bothered to train them. Lack of training equals missed opportunities in increased revenues and additional profits. The company loses out and so does the customer, not to mention the additional commissions lost by the salesperson. That's what it means to "leave money on the counter." It's revenue lost due to underperfonnance.

A district manager interviewed for this article said he had calculated that if counter sales had increased by 2%o in gross margin during the previous year, he could've avoided letting a CSR go. As he put it, "The guY could've saved his own job." Though the statistics are strictly anecdotal, his story makes a valid point: leaving money on the counter is costlY. lf insulation wears too thin on wire, it can result in current leakage. Likewise, if salespeople just "go through the motions," if they don't work to learn the benefits of the products they sell and understand the needs and preferences of those they serve, so that they can better join the two together, if there's no meaningful differentiation from any other distributor in the marketplace, then the customer experience wears thin and the result is "sales leakage."

And it isn't simply a matter of increasing revenue through up-selling. There are other ways that moneY is left on the counter. Flaws in the dealer's overall customer experience negatively impact the buying experience.

Cause & Effect

Here's a list of eight waYs that money is left on the counter and measures to stop the sales leakage.

I. Poor showroom presentation. A dealer can carry all the customerprefened products in the world, but if they're poorly displayed-or not displayed at all-sales will be dismal. Empty shelves and empty wall hooks reflect an empty warehouse in the eyes of the customer. Keep displays filled and imaginatively merchandised. Making your showroom stand out and making it easy to buy from you are the keys to success.

You have to have an edge. An edge can be as simple as offering complimentary wireless Internet, free soft drinks, or flat screen televisions showing sporting events.

2. Inventory mismanagement.

Selling down to a quantity of one isn't effective inventory management and a single tool hanging on a wall hook does not a display make. Relying on the data provided by inventorY management software can backfire when it comes to merchandising the counter. A dealer has to decide whether to risk the fewer inventory turns by buying enough Product to completely fill a display, or not carrying the product at all.

Paradoxically, inventory tums often improve when stock levels imProve. That's because most people are reluctant to buy the last item standing. Keep sufficient inventory and backstock for the counter.

3. Stocking products thst don't sell.

It may seem obvious that it's a bad idea to keep products that don't sell on the counter, but it's easy to overlook an item that doesn't move. It never leaves an empty shelf space to draw attention to it. Keeping products that don't sell on the sales counter creates an idea in the customer's mind that the distributor is out of touch.

4. Neglecting add-ons.

Selling add-ons has moved beyond suggesting batteries for the new flashlight the customer just bought. As manufacturers expand their offerings to include items like leather portfolios and canvas bags, thermoses, grill sets, water bottles, even toys, it's easier than it's ever been to suggest add-ons.

Some salespeople may think this is high-pressure selling. Not at all, as high pressure selling doesn't fly with today's hype-sensitive customers. Casual conversation works best. For instance, you could ask, "Have you seen this new flux capacitor from the Delorean company? Let me show you what it does." Most customers appreciate the extra attention. The key is to sell the primary item first, before mentioning an additional product.

Trust is essential in add-on selling, so avoid recommending an item unless you believe there's a benefit to the customer. A partial list of potential add-ons could include drill bits, screws, saw blades, hand tools and pouches, powdered energy drinks, hand lotion and cleaner, computer spray duster, and insect repellent.

5. Under-seiling.

"Selling up" is persuading your customer to consider a higher end product than the one chosen. Good, better, and best categories are popping up in all kinds of different products. When popular brands, like Smith & 'Wesson, Harley-Davidson, and NASCAR appear on merchandise such as safety glasses, gloves, and tools, it lifts them out of the commodi- ty category. Items bearing the logos of popular brands generally command a premium price, thus providing an alternative to selling the cheaper generic counterparts.

Some manufacturers are rolling out special editions and premium grade versions of traditional products. For example, Klein Tools breathed new life into its 15O-year-old line by launching the "Joumeyman" edition of select hand tools.

6. Ignoring new prospects.

Most outside salespeople ignore the opportunities available at the sales counter. An outside sales rep told me he discovered one of his best customers by setting aside some time to spend at the counter each day, helping with customers and getting to know the people who worked for the contractors whom he called upon. Each salesperson in the branch needs to spend time on the counter.

7. Not marking items.

It's been a source of contention for years in the wholesale business: to price, or not to price. Traditionally, the items sold in the sales counter area are rarely marked with price tags. But that could change if consultants and marketing experts have their way. Citing research from surveys and statistics, they make a convincing case that in sales counters where the merchandise is priced, sales climb as much as20Vo. The reason is two-fold. Some customers simply will not ask a salesperson for a price. The other is an old mindset that believes if it's not marked it must be expensive. Pricing the items in the sales counter overcomes both of these objections.

8. (Jnder-pricing.

If you're not worried that your pric- ing is too high, it's probably too low. The knee-jerk reaction of almost every sales rep at one time or another is to reduce the margin at the slightest mention of price. The customer asks, "Is that my price?" and ll%o is slashed off the top. "You sure?" takes off another 5Vo.

Establish a target profit margin for items sold over the counter and stick to it. If a dealer's relationship with its customers is based solely on price, then it's difficult to increase profit margins. It's to the customer's advantage that salespeople keep this attitude. The customer's prerogative is to get the best deal. The salesperson's job is to get the highest margin.

What's showing?

Business author Jim Cathcart writes, "A movie ticket doesn't just buy you a seat in the theater; it buys you the experience of enjoying the movie." If you resign to the role of "order taker," you're selling the ticket without showing the movie. When nothing distinguishes you from your competitors, there is no reason for a customer to pay you a higher margin. But design and build a customer experience that meaningfully differentiates your products, people, and services, and you will disengage customers from a "cheap price mentality."

Recognize and acknowledge the importance of the total customer experience in every channel of selling. The customer experience is created and conveyed by people with counter intelligence.

- Mike Dandridge is a keynote speaker, founder of High Voltage Performance, and author a/ Thinking Outside the Bulb. Reach him at (254) 624-6299 or via www. hi ghv o lta g ep e rfo rmnnc e. c om.

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Home Depot will construct a 130,000*sq. ft. home center in Covington, Wa., and can build in Coos Bay, Or., after the U.S. House of Representatives passed an exception to the 200-year-old Indian Nonintercourse Act ...

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Stimson Lumber's Gaston, Or., mill sustained a two-alarm fire Sept. 2 that began in its on-site power supply building

Bakerview F ore st Products, Abbotsford, B.C., has acquired Pat Power Forest Products,Port Coquitlam, B.C.

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