How Much Do RSAs Matter?
Volume 146 NO.3 May/June
By David Benbow
Can you explain why one of my salespersons with clearly superior skills underperforms another salesperson with good but less evident skills?”
This was the question one of my clients asked me the other day, voicing a complaint that I hear all too often. In this particular case, the RSA with premium skills averages about $8K less in sales per month than her co-worker. My client was worried about how much this problem was unnecessarily costing the store in profits. My quick calculation produced the following answer; at a 48 percent average profit margin, $8,000 per month X .48 = $3840 per month in reduced profits. This amounts to about $46,000 annually (of lost profit), for one sales person, who, when observed in action on the sales floor, appears to have superior sales skills.
Comparing the performance of two or more RSAs should be done very carefully, and probably done on an annualized basis. If you compare day to day, or even month to month, variances may not be as noticeable or significant. If you divide $8,000 by 30, the average number of days in a month, it comes to a rather modest $267 per day in missed sales. Doesn’t sound like much, does it? Anybody can be short in sales on a given day, due to the breaks. But by the end of the year, the store owner looks at the bottom line and $46,000 is missing, IN PROFIT. This phenomenon happens frequently, every day, in thousands of fine stores across this great country. In an ironical twist to this situation, many store owners will move heaven and earth to find a missing $100 bill when doing the daily recap, but swallow thousands of dollars in lost sales without a whimper.
Now, the paradox is; this under-performing sales person is making $46,000 per year in commissions and bonuses, which is about what she is costing the company in lost profits. Does it sound like something is wrong with this picture? A very small amount of analysis would show that the under-performing RSA with superior skills could pay for her keep just by matching her less skilled co-worker in sales.
So, what does this have to do with the question posed in the title of this article? Is this RSA worth it, even with her palpable skills? Let’s make some observations and see if we can gain some understanding.
Are There Alternatives To Salespeople?
Of course, there are alternatives. In most of the famous big box retailers, who may carry some furniture, but also sell everything else from tires and lawn fertilizer to wine product and cheese food, they provide price tags, some of which display explanatory labels. They employ well-scattered clerks (not to be confused with salespeople) around the store. In this type of store, the customer looks for the clerk, whereas in furniture stores, the RSA looks for the customer. When you get to the check-out counter, the cashier politely asks if you found everything you were looking for. (Yeah, I found everything but a clerk who could answer my questions.)
One particularly huge retailer, who specializes in Nordic furniture and various miscellaneous home furnishings, operates in a somewhat different fashion from traditional furniture stores. They do not have traditional, commissioned RSAs on the floor; (at least they didn’t the last time I visited one of their stores.) To succeed without what I consider to be authentic salespeople, they spend a lot of money on advertising and image and work too attract a lot of shoppers, who shop pretty much as they do in a grocery store. (When I say “authentic salespeople,” I mean RSAs who actually make an effort to CLOSE the sale, and who get paid to close sales.)
How do they do it? Why don’t furniture stores, big and small, operate this way?
If the above-mentioned stores can operate without highly paid retail sales associates, why can’t furniture and mattress stores? I mean, after all, aren’t we told that the internet has changed everything we used to think about customers?
Are Customers Really Well Informed Today?
I read a lot these days that customers, thanks to the internet, are SO much better informed than they used to be. If that is so, why do we need Retail Sales Associates?
I worked for many years as an RSA, both before the internet, and after the internet. In my opinion, very often, the internet revolution has converted UNINFORMED customers into MISINFORMED customers.
Even the nation’s most famous consumer information reporting magazine is frequently, and rightly, criticized for misinformation by well known mattress and furniture industry voices. If you can’t believe the self-appointed consumer information publications, whom can you believe? And, if the famous magazine’s information is of questionable value, how much can the customer rely on the widely varying data found on the internet?
Do RSAs Earn Their Money?
They’re supposed to. Otherwise, why have RSAs? Wouldn’t it be nice if a store owner or manager could know just how efficient and effective the sales staff is? Maybe someone will develop an algorithm to produce a number that could be considered the optimum sales target for a given store. The actual sales figures would then be a measure of sales effectiveness. It should be possible, with a similar algorithm, to produce an optimum sales figure for each sales associate. Note: I only offer this as an idea. In my own stores, we had no algorithm, we just guessed, pretty much like everybody else.
Every sales manager and store owner also knows that some RSAs produce more than others. Is this performance disparity a matter of talent, a matter of effort, or is it a combination of both? In some stores, the top performers operate at a high efficiency quotient, and the low performers probably cost the store some of the profits that the top performers accrue with their excellence.
More often than not, the disparity between the top performer and the low performer is far greater than in the example we gave at the beginning of the article. If the skilled, but under-performing RSAs are costing the store $40,000 per year in profit, how much are you losing with the less effective RSAs? At what point, does the store owner stop and consider, “How much money am I losing every year due to poor sales performance?”
I have read about an interesting psychological phenomenon that can be described as “The fear of loss is greater than the desire for gain.” This may explain why that missing $100 bill discovered at closing time worries the store manager more than the thousands lost every year from poor sales performance.
What About Incentives?
Incentives can include commissions, bonuses, spiffs and other motivating actions to spur sales. Do they work? Some say they do, and some say they don’t. In recent years, I hear more about an industry trend toward salaried sales people. A famous store owner in the Gulf Coast area of Texas makes a good case for salaried sales employees. Another famous store owner in Colorado makes a good case for commissioned sales people. I’ve known other store owners who paid a base salary with commissions and bonuses based on performance. We will not argue in this article, pro or con, on the merits of any pay or incentive schedule.
A Good RSA Is Hard To Find
Some stores, especially in smaller markets, have trouble attracting decent applicants for sales positions, especially if the job is commission only. Job seekers are understandably reluctant to jump off into a situation that has no guarantees; and this is especially true for mature adults considering a career change. This wary attitude on the part of sales job applicants is probably less of a problem for well-known stores that have a reputation for high pay. Either way, however, attracting talented, motivated people into furniture retail is usually a challenge for any store, no matter how famous.
Why Do Some RSAs Outperform Others?
This, of course, is the real question, and the stimulus for this article.
Talent, motivation, personality, energy, greed, product knowledge, focus; all of these elements, among many others, are factors in superior RSA performance. And, on the negative side; indolence, ignorance, self-satisfaction, laziness, distraction, and a few other elements explain lack of performance.
I use the word “talent” frequently when I refer to successful, productive Retail Sales Associates. But, what is talent and how does an interviewer recognize it in a new applicant? Again, if somebody knows how to recognize talent in a new applicant, please call me and let me know. I have been fooled so many times, it pains me to even think about it. I often see potential, but rarely talent.
I try not to use sports analogies, but there is a phrase going around these days that was originally spoken by Bear Bryant, the old Texas A&M and Alabama college football coach who was phenomenally successful in his long career. Among his many well-known and often quoted maxims, this one is the most applicable to the sales training dilemma, “It is not the will to win, but the will to PREPARE to win that makes the difference.”
That sentence, I believe, really sums up the word TALENT. If you are willing to prepare, with the goal of becoming fully prepared for the RSA job, then you probably have talent, and you will probably prove that talent in a successful sales career.
Okay, anybody that has read my book or any of my articles knows that I really believe in training and preparation. But, what about the RSA in the first paragraph who, even with great talent, lags behind his/her co-workers?
Focus And Execution
Another word we hear a lot today is the word, “focus.” To me, it means concentration, execution of the plan, not letting outside distractions get in the way of doing our job.
Imagine Bear Bryant’s football team preparing intensely for the Cotton Bowl. Every player is ready. The game starts and on the first play, the speedy wide receiver hurtles down the field in pursuit of a long pass. But on the way down the field, the wide receiver, who also happens to be an ornithology major, notices an unusual bird circling overhead, takes his eye off the ball to observe the bird, loses sight of the ball and a sure touchdown is lost, and then ultimately, the game. The receiver was prepared and talented, but he lost focus.
Maybe this is why that talented RSA in the first paragraph of this article sells less than another RSA, who may be less talented, but exerts greater focus.
Then, there is execution, which is a fancy way of saying, “Do your job.” Using football again, very few games are won with trick plays. Games are won by solid, sensible plays and running those plays correctly every time. That is execution.
Which means, if the RSA prepares, learns how to sell (run the plays), and stays focused, he or she will succeed.
Well, so much for the motivational speech. What about those pesky distractions that can cause even the talented RSA to lose focus?
Is it possible for the RSA to get distracted while working the sales floor? I think so, and I think distractions are a major contributor to failure. What are some common distractions?
1. Cell phones. When I started in the furniture business, we didn’t have cell phones. Now, we do. We didn’t have Facebook, now we do. Ironically, these items can be great tools for business, but they can also be business-killers, and usually are, when it comes to RSA usage of them.
2. Down Time. For most RSAs, the hours spent on the sales floor, especially during slow days, can get pretty boring. Our business has lots of down-time, which COULD be used productively, but rarely is.
3. Other RSAs. It’s hard to ignore those other people on the sales floor, and I’m not saying you should ignore them. The problem is, RSA-interaction can get non-productive pretty fast if it is not regulated and policed.
4. Customer problems. Most RSAs like to make sales. Not many like to handle customer problems. Some large stores offer the benefit of a Customer Service Desk for handling inquiries and complaints. But, for many stores, the RSA is not only the salesperson, but also the customer service representative and fielder of complaints. It’s probably better if your top performing RSA is taking ups and not explaining to a disgruntled customer why the finish is coming off her new night stand.
Now To The Real Problem
We started off this narrative with the question, “Are RSAs Worth It?” We still haven’t gotten to the final answer (if there is one), but one more issue needs to be discussed before we conclude. That issue is Sales Management. Once again, we will drag out a sports analogy. How many coach-less Super Bowl champions can you name? How many manager-less World Series champions have been enshrined at Cooperstown?
These are not trivia questions. They are serious issues.
Maybe the great RSAs, the Hall-of-Famers, would still be great without good managers and coaches. But what about the rank and file; the average producers? Could their performances be enhanced with good sales management? I believe the answer to that simple question is self-evident. Very few people are self-starters. Very few workers perform well in an unstructured environment. A good Sales Manager with a smart Sales Management philosophy should build the structured environment in which a sales force of otherwise average sales people could flourish.
Now that we have broached the subject, let me say that this article is not about the attributes of a good Sales Manager, nor is it about building a structured sales environment, but a Furniture World Magazine article is coming soon on this subject.
So, Are RSAs Worth It?
The original question, which asked whether furniture stores really benefit from RSAs or not, has no definitive answer. It’s sort of like, should you pay commission or salary? Should you use RSAs or clerks? It depends on your store and situation.
Let me say this, however. You give me a team of talented RSAs and I will go up against any store in the world, selling anything, with any merchandising or marketing philosophy, and we will beat them.
Things have changed, admittedly, but not that much. As has been stated before in this magazine, “The one-on-one conversation is still the best selling method in the world.” And, that is especially true if one of the participants in this conversation is a well-prepared, talented RSA who enjoys the benefit of a strong, structured sales environment with enlightened, intelligent Sales Management.
You don’t have the one-on-one sales conversation in Wal-Mart. You don’t have it at your local neighborhood grocery store. Rarely do the hard-to-find clerks at those stores have the product knowledge to be very helpful. That’s why they put that long ingredient list on the back of the package. I don’t know about you, but I think I would be shocked, but pleased, to find a PhD in nutrition working every aisle of the frozen foods section.
But, in our friendly neighborhood furniture and mattress stores, we CAN have this. Every furniture store has the opportunity to put an all-PhD sales team on the floor. When a store fields an all-star sales team, then the RSAs will be worth it. RSAs will matter. All it takes is “the will to prepare.”
David Benbow, a twenty-three year veteran of the mattress and bedding industry, is owner of Mattress Retail Training Company. Dave’s company offers mattress retailers a full array of retail guidance; from small store management to training retail sales associates (RSAs.) Dave’s many years of hands-on experience as retail sales associate, store manager, sales manager/trainer and store owner of multiple stores in six different American metropolitan areas uniquely qualifies him as an expert in selling bedding at the retail level.
David is the author of the recently published book, “How to Win the Battle for Mattress Sales, the Bed Seller’s Manual”. This book is the first book to systematically present a complete, organized, but easily read and understood text book for mattress and bedding retail sales associates, beginner and experienced professional alike. It is a complete training course in one 292 page book. The book can be purchased on-line at http://www.bedsellersmanual.com.
He also offers hands-on training classes for retailers on a variety of subjects and issues as well as on-line classes that can be downloaded from the websites mentioned above.
David can be contacted via e-mail at email@example.com or in person at 361-648-3775.
Read other articles by David Benbow