By Tom Stockham, firstname.lastname@example.org
Remember the days when stores differentiated themselves against the competition on service? When consumers sought out expert product recommendations from knowledgeable sales associates? And bought from the one who worked hardest to help them find just the right product for their needs?
Things have changed drastically in retail over the past thirty years and the race to offer the lowest prices has been fought and won by the big box retailers. This race to the bottom in retail came at the expense of affording the trusted, knowledgeable and well trained sales associates that we had come to depend on for product recommendations and advice.
These days, retailers have to contend with a new challenge; the rise of “showrooming,” which involves customers checking out a product in the store, smartphones in hand, and then buying it at another store or online at a lower price. It almost seems as if knowledgeable sales associates have been replaced by dozens of online reviews from strangers. But the reality is that those endless reviews add up to too much information for consumers to absorb, and are full of mixed messages, inconsistent ratings and unknown sources. It’s hard to decide which ones to trust, and which to ignore.
Still, some retailers assume that consumers enter the store with their minds already made up about what to buy. As a result, they’ve scaled back on service to reduce costs and keep prices low. Rather than hiring experienced sales associates or individuals with product expertise, they rely on entry-level, minimum-wage employees with little product knowledge to share with customers.
But it’s a fact that knowledgeable sales associates — and the conversations they have with customers drive sales. In fact, 75% of shoppers buy items that an expert recommends, and shoppers spend 50% more after talking with a knowledgeable person. Every conversation on the sales floor counts — and traditional retailers can both benefit greatly from sales associates with expertise and experience, and create experts of their own with minimal investment.
Providing sales associates with the right product training, firsthand product experience, and incentives can keep a retailer competitive, relevant and perceived as a source of expertise in a world where service once again trumps price in the battle for consumer’s wallets. Here’s how to achieve this for your store:
Help sales associates create happy customers, which are loyal customers.
Motivated, well-trained sales associates drive greater customer satisfaction, boost customer loyalty and positive word-of-mouth, and generate higher sales. In fact, loyal customers make about 70% of all purchases. And increasing customer loyalty by just 5% can have a tremendous impact, increasing profits by an average 65% and growing revenue by over 100%. Expert staff can even counteract the showrooming phenomenon. According to the 2012 Kellogg Shopper Index, 40% of shoppers who said they engaged in showrooming reported that they didn’t start out intending to buy online, but were driven to do so by poor customer service in the store. Therefore, effective sales-associate training is often the key to keeping these customers both happy and buying in your store.
Recognize that expertise matters. And start building and rewarding it.
Knowledgeable sales associates are more influential sales associates who continue the conversation and drive traffic to the store even after business hours. A full 90% of them share product knowledge and suggestions at least once a week outside of work. In the store, they can be influential enough to boost basket sizes by 50% just by interacting with customers. Well-trained sales associates can even influence the decisions of up to 40% of customers who already know what they think they want to buy before entering the store.
Increase job satisfaction and reduce turnover.
Evidence shows that well-trained employees are more satisfied with their jobs and have a lower turnover rate. Employees who feel capable and well equipped to meet customer needs report job satisfaction more than twice as high as their counterparts. On the flip side, employees who lack the resources they need to be successful on the sales floor are much less likely to keep working for their employer. And when a quality sales associate leaves a retailer, customer satisfaction levels drop sharply, by as much as 20%. Few companies can afford turnover at that cost.
Empower associates to help customers make more informed, confident purchases.
Personal recommendations and suggestions are powerful influencers, hence the popularity of testimonials, celebrity spokespeople and sports endorsements. In the store, more than three-fourths of shoppers buy an item when an expert suggests it — which makes product training and opportunities for personal product experience worthwhile investments that can transform sales associates into highly influential experts. Trained, experienced sales associates can then listen fully to customers’ needs and make smarter, stronger recommendations. Shoppers often bond with sales associates over their similar experiences or interests, and thus make better-informed purchases that are less likely to be returned.
Successful retailers like the Apple store, Lululemon and The Container Store that invest in retail employee training have proven that creating experts inside the store can drive sales and customer loyalty. Meanwhile, retailers that fail to educate their staff or put knowledgeable associates on the floor to help customers make decisions are losing untold potential sales. With margins cutting close to the bone in today’s highly competitive retail environment, retailers must learn to differentiate themselves on superior in-store service and expertise, having more valuable and influential conversations with customers and providing a richer, more interactive buying experience. To do so requires an investment in creating knowledgeable, well-trained and motivated experts who are equipped and eager to help customers make informed decisions, purchase more and become loyal, repeat customers.
Tom Stockham is CEO of Experticity, where he is responsible for guiding the company's efforts to make people with helpful expertise a key part of successful retail commerce. He started his career in The Boston Consulting Group’s retail practice, where he was focused on disruptive supply chain and distribution economics and operations. He can be reached at email@example.com.