What retail owners and managers can do about entrenched thinking on the sales floor.
Oh, the joys of experience! It serves us well at times, but often it just gets in the way of implementing critical changes that are necessary to bring new life to long-standing organizations. Steven Covey, in his seminal book, “Principle Centered Leadership,” published over a decade ago, made a startlingly simple observation: “Often, the way you see the problem” he said, “IS the problem.” So, when new ways and means are required to face new and unprecedented competitive challenges, our experience, which colors and defines the way we see things, is the problem. Now, we are at the point in our industry’s evolvement when a dramatic change is necessary.
Over the past three decades I’ve sought new ideas about how to sell more furniture, and manage the processes that make it happen. I think I’ve changed direction a dozen times before forming a core set of beliefs and principles that drive my view of how things should be done by both salespeople and managers. Every year something new comes along – some new piece of research about how consumers think and make decisions, or a newly discovered piece of intelligence around how organizations work – and I’ve had to adjust my thinking, my actions, and my advice to clients.
But, some people have a hard time changing their thinking, let alone their behavior, and this has caused more underperformance in retail furniture stores than any other factor except understaffing. Let me say that nearly all furniture stores are understaffed, meaning that there are too few salespeople to handle all the customers that come through the doors. After that costly issue, the entrenched thinking of “experienced” salespeople regarding how to deal with customers is the next most costly issue retailers have to face.
When you think about it, the way we show and sell furniture in most stores hasn’t changed at all in decades. We’re still showing the same things (bedrooms, living rooms, family rooms, dining rooms, etc.) in the same ways, and still saying the same things to consumers about them (except that little thing about China), and still trying to sell furniture as though it were simply a commodity.
All other retailing has changed dramatically, and some forms didn’t even exist 10 years ago, yet the way we sell, the way we describe things and the way we close sales remains the same. On average, my experience with hundreds of stores over the last decade shows that closing rates average not higher than 20% in full line furniture stores. Since average is, by definition, the best of the worst, there are actually a lot of individual salespeople who perform far lower than 20%. This, of course means that there are a lot who perform above that level. Experience shows that the poorest performers are in the 15% to 18% range, while the winners – the best performing people – are in the 30% range. This group represents about 10% of all salespeople.
All of this means that somewhere between 70% and 80% of all customer visits don’t result in a purchase, and this seriously affects how our industry performs overall. Why is this so? What is our problem? The reason is that too many long-term salespeople, and many new people as well, still believe that our business is about furniture – the stuff. But, in fact, that’s not what our business is about, and some salespeople, the top performers, know this. They know that it’s really about rooms, homes, and far deeper emotional issues. It’s about beautiful environments, cozy retreats, aesthetic beauty, places people love to live in. Furniture is just one feature in this mix, and consumers are all looking for beauty, comfort, eye appeal and style in the rooms in which they live.
The difficulty comes when they seek help in furniture stores to achieve these outcomes, and encounter salespeople with entrenched ideas about selling furniture as a commodity. When we try to change this thinking and get salespeople to do different things to provide consumers with the help they need, we run into a brick wall of resistance, entrenchment and stubbornness. Why? Because even with dismal close rates, all the furniture most of our “experienced” salespeople have ever sold, has been sold in the regular old way. Minimal success rewards poor performance, and the long “experienced” salespeople become more and more entrenched with each specious success. Thinking and behavior become cellular, and institutional gravity draws those who try to escape the behavioral back hole right back in.
A complete break from the past is necessary as has been the case with every dramatic advance in human development. It’s time the furniture industry woke up to the reality of its performance which is completely in the hands of retail salespeople. That’s right – all the hype of market introductions, all the design inspiration, the manufacturing execution, the marketing (of which there is practically none), the global economic impact – all of it comes down to the interaction between a retail salesperson and a consumer with a need. In an industry that virtually overflows with suppliers, there is only one connection to the final consumer and that connection has its foundation built firmly in the mid twentieth century.
The break has already begun, and to the detriment of the small, independent retailer, it’s being driven by companies who are among the top-50 furniture retailers. Instead of dealing only with furniture features and benefits, price, or finance considerations, some of these retailers are beginning to allow for dealing with the room. Go to the websites of some of these Top 50 companies like Raymour & Flanigan, R.C. Willey, Jordans, and look for the Room Planner tool. One of these companies, Raymour & Flanigan, has installed room planning kiosks in their stores to allow for salespeople and consumers to work with the idea of rooms, in addition to just furniture.
How do you raise your closing rate from an average of 20% to 30% (a 50% increase in sales)? Just get one more customer out of every ten shoppers to buy, by offering to help them to create the rooms they dream about. This idea of more help is the difference between those customers who don’t buy, and those who do. If our business is really about rooms, and not just furniture, this would seem to be a good idea, however, when you try to do this, you’re likely to come up against a stone wall of resistance from your “experienced” salespeople who want to continue to do it their way. The larger retailers, who have the corporate management power to drive strategic changes, through unrelenting management pressure for performance, will be more likely to succeed.
In the end, the changes necessary to bring our industry into the 21st century will occur. We will move from a merchandise-driven industry to a customer results-driven industry regardless of how resistant our long-term employees are to the change. Some retailers will be left behind and will perish, as is the case in all dramatic social and economic change. Some of this will be because small business owners have a hard time dealing with the interpersonal difficulties that are inevitable in driving changes in the way their companies work. But that’s another issue for another issue.