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Do You Really Need Your Sales Manager?

Furniture World Magazine


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And what should he or she be doing for you?

Last month, following a thorough analysis of one retail operation, It become plain that to achieve its sales goals, this store needed a full time sales manager. Although the owner felt this may be true, I could sense he was approaching this option with great trepidation. After more discussion he asked me, "What would a sales manager do for eight hours a day, five days a week?" This is a common concern of owners in a large number of medium to even high volume ($2 million plus) stores.

When owners are faced with the need for additional revenue, many tend to rely on management techniques they can control directly. Advertising and merchandising, are such strategies. They both provide immediate optimism and even some results. Their weakness lies in that they net only short term results and are almost always far more expensive than the cost of an effective sales manager. Sales management, by contrast, nets incremental growth over a long period to yield a far greater return on investment. Given this information, why do many store owners resist hiring a sales manager?

Further discussion with the store owner mentioned above revealed that three specific issues were preventing this store from having the full time sales manager it needed:

  • The owner didn't understand the details of the job or its responsibilities
  • He was intimidated by the thought of having to manage somebody in a job whose process he did not fully understand.
  • He wasn't certain that he would get a return on his investment in the manager's salary.

In my experience, these are the three major concerns owners have which prevent them from filling this critical position. I'll address each in their respective order.

UNDERSTANDING THE JOB
First, many furniture stores are owned by entrepreneurs who have never worked for a company as large as the one they own. Most of these individuals have never even worked under professional sales managers and they've never done the job themselves (at least not professionally). As a result, they truly don't understand the role of the sales manager. They're aware only of the most obvious sales management activities. Beyond that, they simply don't know what the job entails (e.g. hiring, sales meetings, scheduling, etc.). They, therefore, typically handle the most critical responsibilities themselves, and leave the remaining activities undone. What these owners may not realize is that when they fail to fully manage their own sales people, they actually prevent the store from operating at its peak potential.

Table 1 consolidates much of the information presented about the sales management function in this series of FURNITURE WORLD articles over the past 16 months. Please refer to it when considering:

  • Whether or not to hire a full time sales manager.
  • Whether or not you are getting adequate value from your existing manager.

For a detailed discussion of each activity, please refer to the original article.

MANAGING PROCESS VS. THE RESULTS
The second roadblock that prevents owners from committing to a full time sales management role relates to style. Often, the question, "What would a sales manager do?" indicates that an owner is more comfortable managing process than results. Because many owners do not have sales management experience, they don't know the process involved, and therefore believe that they do not know how to manage the position.

The solution is for owners to stop managing worker's day-to-day, minute-to-minute process and instead manage their sales manager's monthly results. This requires a change in the way owners relate to their staff and it calls for measures that make managers accountable. When owners get caught up in day-to-day processes their bottom line typically suffers because they're not effectively utilizing their own time. Furthermore, this "detail work" often prohibits owners from achieving a desirable quality of life due to their inability to delegate responsibility.

RETURN ON INVESTMENT
The final roadblock for owners is the issue of whether or not the addition of a sales manager will simply increase overhead without improving the bottom line. This fear stems from a lack of vision of and knowledge about retail furniture sales management accountability. Speci-fically, it results from a lack of measurement, monitoring, and accountability on the owners part.

It is not difficult to determine whether a sales manager is contributing to profits. All it takes is proper measurement of the store's sales volume, average ticket, and closing rate. This is the only way to effectively and fairly gauge performance. All owners should know whether or not their sales managers are paying for themselves. Furthermore, managers who can't even return a profit on their compensation are truly failing at their jobs and should not be there. For more information about how to ensure that this position does in fact contribute to your profits, please refer to my article about Sales Management Compensation in the September 1996 edition of FURNITURE WORLD.

THE RESPONSIBILITIES
Below is a list of all sales management responsibilities in a retail furniture store. It can be used as a starting point for creating a sales manager's job description. You are welcome to add responsibilities, however I caution anyone who is considering eliminating one or more activities to rethink their actions. Each is a part of the "big picture" of sales management. When implemented together, as part of a grand sales management strategy, their effectiveness cannot be disputed.

Each of these responsibilities plays a key role in the success of each individual sales person as well as the store as a whole. The sales manager's role is to ensure that staff members are performing at their peak levels, and that customer-driven behavior manifests itself in every individual and every act that occurs on your floor. If your managers effectively carry out each of these responsibilities, they will ensure that they contribute to your profit and not your overhead.

List Of Sales Mangager's Responsibilities
Measurement (Aug 95; Sales Measurement)
Measurement should be used to motivate, develop goals, and train. When effectively tied to results, proper measurement will motivate your people to improve their own performance and encourage them to seek out additional training in areas where they’re weak. The four components are: 1) collection of measurement figures, 2) calculation of performance indicators, 3) interpretation and feedback of performance indicators to sales people, 4) results.

Staffing (Sep 95; Sales Floor Staffing)
Sales floor staffing should be based on two things: the amount of traffic coming through your doors on a daily basis, and the service standard you’ve chosen for your store (the amount of time sales people should spend with each customer). Unless your floor is staffed appropriately, it is likely that any training, and many other efforts will be in vain.

Recruiting (Oct 95; Are Your Sales People Holding You Hostage?)
Recruiting should be an on-going part of daily sales management. Top sales managers maintain a database of potential sales people to ensure a smooth transition between employees and to keep existing sales staff in line because they know they can be readily replaced.

Selling Strategy (Nov 95; Do You And Your Sales People Have The Same Strategy?)
Your selling strategy is simply the way you want furniture to be sold in your store. Owners must decide exactly how they want their customers handled. Then, it’s the sales manager’s responsibility to ensure that all sales people conduct themselves in that way. Selling strategy includes your overall selling philosophy as well as the actual mechanics of the sale in your store, including the greeting, the presentation, the closing and the follow up process.

Negotiation Strategy (Aug 96; Get The Negotiation Monkey Off your Back)
As a component of the selling strategy, sales managers are responsible for implementing the negotiation strategy you determine for your store. Although customers commonly ask about price flexibility, deep down inside they dislike it. When we force them to negotiate, they will never be loyal because they’ll always be searching for the lowest price. Instead, I recommend that stores implement a lowest price guarantee policy, and train sales people to sell effectively without using the negotiation crutch.

Training Strategy (Jan 96; Does Your Training Strategy Match Your Sales Strategy?)
For training that translates into improved sales, it is critical to pick a program, or develop one on your own, that fits your store’s environment and selling strategy. When training is implemented, make sure that everybody is aware that you expect changes in both behavior and operating results. Anything short of this strategy draws little respect from sales people, and will likely be a waste of time, not an investment.

UPS System (Mar 96; Why Every Store Should Have A Customer Driven Ups System)
For a store to legitimately claim that it is customer-driven, it absolutely must have a customer-driven UPs system. The sales manager is responsible for developing and maintaining the system. This is the first and potentially most important step to providing each and every one of your customers an equal and specified level of service.

Customer Ownership (Feb 96; Do Sales People Own Customers or Customers Own Sales People?)
The UPs system is designed to ensure that customers own sales people and not vice versa. Over the years, sales people have devised hundreds of schemes to ensure that they own their customers, even when they’re not requested. The sales manager’s responsibility is to notice when this is happening, then institute policies and procedures that override these games. The loser is never another sales person, it’s our customers who are inevitably put in uncomfortable situations.

Goal Development (Apr 96; Are You Driven By Goals Or Drifting On Hopes?)
Store goals should be developed using a bottom-up process based on the sum of the individual sales person goals. It isn’t logical, fair, or realistic to develop store goals, then force arbitrary numbers on each sales person. Individual goal development begins with a personal goal for each sales person. Then the process backs into a specific sales number using the individual’s desired income level, average sale and closing rate, and managerial instinct.

Sales Person Feedback (May 96; Feedback Feeds Performance)
Without providing feedback to individuals about their current sales performance, it is nearly impossible to improve future performance. The proper use of feedback entails a process that utilizes individual sales numbers, observation on the floor, and one-on-meetings. By properly implementing these three tools, sales managers can effectively help sales people reach their goals and keep in touch with what’s happening on the floor when they aren’t watching.

One-on-One Meetings (Jun 96; What Should Happen Behind Closed Doors)
Conducting one-on-one meetings with every member of your staff is critical to keeping the lines of communication open and to build relationships. Weekly meetings are critical for lower performing staff members. These meetings should be used to provide individual feedback and to offer individualized training (especially for low performers). The outcome should always be documented in a performance agreement.

Sales Person Compensation (Jul 96; Effective Retail Sales Compensation Plans)
There are hundreds of different methods of compensating sales people, however, the most effective method is to pay a straight commission. Salary, salary plus commission, and variable commission plans all sound great, but they each have their shortcomings when compared against straight commission. Most importantly, they rarely fulfill their purpose, to motivate sales people, and typically end up costing more than necessary to achieve the same results.

Sales Manager Compensation (Sep 96; Sales Manager Compensation)
Sales managers themselves should be compensated based on the impact they’ve had on your sales. We recommend a 50/50 salary/bonus plan. Half of the bonus is a flat sum based on reaching a goal for a particular increase in sales over the course of the quarter or year. The other half, also a flat sum, is based on reaching an average sale goal for the period in question. This plan ensures that managers are compensated only for things over which they have an influence.

Beliefs (Oct 96; Your Most Important Asset: Shared Values)
As many stores grow, the core beliefs or values upon which the business was founded often become unfocused or entirely lost. We’ve developed a series of values that, when the sales team buys into them (and they all do), they have a vision for how business will be conducted in your store. Moreover, these values or beliefs give your sales manager a common set of rules to guide the behavior of the sales staff.

Client Development (Dec 96; Are Your Sales People Selling Customers Or Developing Clients?)
The easiest sale is always to a previous customer, therefore, managers and sales people alike have an interest in maintaining a strong clientele development program. Sales managers should be responsible for implementing the program among their staff and then seeing that it is maintained. This includes a whole set of factors including staffing, store facilities, databases, the greeting system, store culture, etc.


Ted Shepherd is the founder and CEO of Shepherd Management Group. The company specializes in changing the selling culture of furniture stores from merchandise-driven to customer-driven using an intensive hands-on process of consulting, training, and mentoring. For more information on the topics in this article contact tshepherd@furninfo.com.

 

Furniture World is the oldest, continuously published trade publication in the United States. It is published for the benefit of furniture retail executives. Print circulation of 20,000 is directed primarily to furniture retailers in the US and Canada.  In 1970, the magazine established and endowed the Bernice Bienenstock Furniture Library (www.furniturelibrary.com) in High Point, NC, now a public foundation containing more than 5,000 books on furniture and design dating from 1620. For more information contact editor@furninfo.com.