A lot of brick and mortar retailers pay a lot of money for pay-per-click ads or other online marketing. They'll still run ads in local papers or direct mail their offers. They’ll tell you the money they’re spending works because they can see the traffic coming to their website.
But can they tell if any of that traffic converts to actual buyers in their their physical store?
A few can, but not most.
But in those retailers’ minds, pay-per-click or mobile marketing works. Even if their website isn’t converting those people to paying customers, they have a metric in their heads that they judge their investment by.
Those same owners might recycle their paper or get bent out of shape if the cash drawer is over or under $10 or beat up a vendor over shipping costs.
They’ll tell me that retail is a game of pennies saved.
There is an old saying, “Don’t be penny-wise and pound foolish.”
I see this oftentimes with retailers who come to my website and take one of my free SalesRX interactive training lessons. They see the price of $39 per user per month and usually, because they’ve never paid for training, all they see is a cost to them.
If you are one of those people, then read on because I’m going to show you how penny-wise and pound-foolish such thinking is…
There is a huge ROI on retail sales training.
Sales training is nothing more than a unified process for everyone to use on your sales floor that converts lookers to buyers. It will touch every person who comes in contact with your brand - from your loyal customers to casual visitors, from your vendors to business associates – it will come to define the service level of your store.
When employees follow those standards, the sales process is black and white; the best of the employee’s personality can come forward to meet another person with an open heart. When used, rewarded and mentored correctly, fewer customers leave your store without buying or if they already were going to, more leave purchasing more than the one more item they planned.
But how do you quantify such an expense?
The secret to justifying any training system is having a black and white, quantifiable, easily-understood ROI.
This is not hard or complicated. Here’s how…
Go back to your past three years’ sales reports. And if you have them, go back to your customer counts. And also look at your average ticket. Finally, look at your employee turnover.
Now, consider If you had converted just 5% more browsers into customers, how much that would represent in real, tangible dollars missed?
And if you had upsold and raised your average ticket 5%, from say $75 to $79, what would that have done to your draw?
How many W-2’s did you print last tax season? With the accepted cost of a well-trained employee of at least $1500, how much real money did turnover cost you? People don’t stay where they can’t succeed.
Finally, what would 5% more rings have done to your bottom line?
Add all of that up. Look at the hard facts of those losses.
Are you thinking, “Holy crap, that’s a lot of money!”
Yeah, I thought so.
Is it $10k? $20K? $55k? That’s your lost profits. Compare that to your investment.
An ad doesn’t have that power.
A website doesn’t have that power.
None of them.
The only place you get such a high ROI on your money is in your employees, for they touch every customer every day.
They are the ones most able to convert those marketing dollars you’ve spent into purchases.
They are the ones more able to put various SKUS together into a compelling system of purchases rather than single-units.
You’re already paying them to be there, why not train them to finish the job and close the sale?
Still not convinced?
OK, take those same three years.
Run a report of sales versus number of customers back then and compare it to sales versus number of customers now.
Did you see lower traffic counts? Did you lose some customers? Probably.
Wonder why that is? Not enough attention given to them? Didn’t respond to them fast enough? Did a competitor – either in town or online - steal them away with better service and more attention?
Now, look at your customer database. Are customers returning like they used to? Are you getting all the revenue you can from them? Why not?
Isn’t losing those loyal customers or not having them buy as much or as often the same as throwing money away?
Most retailers have an out-of-sight, out-of-mind attitude when it comes to their staff’s performance.
They can’t see the lost conversions.
They can’t see the customer who leaves the dressing room because no one came back on a timely basis to help them. They just assume the customer didn’t like the merch.
They can’t see the customers lost in a shuffle of a busy Saturday who leave because an employee treated them poorly.
They can’t hear the stories of bad customer service until the untrained employee quits – after the damage is done.
They don’t see lost opportunities from customers who cherry-picked a sales promotion.
If that’s you, you need to associate those gruesome pictures with your cash because you are losing lots of it.
In essence, you are being penny-wise and pound foolish.