The Retail Doctor Blog

How To Justify The Expense Of Retail Sales Training For Your Staff And Why

Written by Bob Phibbs | January 03, 2015

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 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, 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.

Not really.

An old saying is, “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 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, read on because I will 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?

Having a black-and-white, quantifiable, easily-understood ROI is the secret to justifying any training system. 

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, if you converted just 5% more browsers into customers, how much would that represent in real, tangible dollars missed?

And if you had upsold and raised your average ticket by 5%, from, say $75 to $79, what would that have done to your draw?

How many W-2s 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.

Nor pay-per-click.

Nor discounts. 

None of them.

You only get such a high ROI on your money in your employees, for they touch every customer every day.

They are the most able to convert those marketing dollars you’ve spent into purchases.

They can combine various SKUS 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 the number of customers back then and compare it to sales versus the number of customers now.

Did you see lower traffic counts? Did you lose some customers? Probably.

Do you wonder why that is? Not enough attention given to them? Didn’t respond to them fast enough? Did a competitor 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?

It is.

Most retailers have an out-of-sight, out-of-mind attitude regarding 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 comes back on time to help them. They 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 bad customer service stories 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 must associate those gruesome pictures with your cash because you are losing lots of it.

In essence, you are being penny-wise and pound-foolish.

See also, How Retailers Can Sell On Value Over Price

In Sum

There is a way to stem the tide of lower margins and profits…

One that greatly returns your investment, whether with me or someone else…

It's teaching them how to sell.

Spend the money, commit to making it work, and you’ll discover, from the other side, that your sales training ROI is immense.

Consider my SalesRX.com as your secret weapon against competition. Click the button below to learn more.