Retailing Versus eTailing - Convincing Customers To Buy Where They Try : It's a cold hard fact that traditional bricks and mortar shopkeepers are taking a beating from the emerging pack of online retailers. We can speculate all we want about how effectively they will combat the assault by making shopping more of an adventure, how they will create events to keep the buzz and excitement in 'trawling the mall', and ultimately how and when they will take the 'can't beat 'em so let's join 'em' approach to the clicks and bricks option.
Although they don't all seem to realise it, the shopping centre landlords and their big brand anchor tenants are perfectly positioned to do this, but I can't help but feel for their smaller cousins, particularly the shopping strip operators who are beginning to feel the pinch in the face of an emerging 'try on live then buy online' trend.
It is beginning to look like their only point of difference will be to fall back to the oldest technology on the planet and absolutely master it - human interface. If they are to survive the online onslaught, the storeowners need to rethink the importance of face to face selling, particularly the art of add-on selling. In my KNACK of Selling workshops, geared mainly to these small business retailers, it is finally starting to take its rightful place as the most important and challenging skill demanded of a floor salesperson, certainly for all but the basic commodity products.
As custodian of the last three feet of the sale, it is they who must take no prisoners; they must not only convert every one of those hard-won heads through the door, but maximise the ultimate gross profit yield by becoming living experts in cross-selling, up-selling, and referral selling... and it all begins with product knowledge!
In selling, our products and services are our lifeblood. We need to know our stock-lines and availability like the back of our hands, to understand how our proposition relates to our immediate competitors' offers, and to appreciate product synergies so we can smoothly and credibly sell-up, add-on, bundle, and accessorise each sale. We need to know where and why our products are located within the stock layout, how they are positioned within the range, and how and why they are priced relative to similar products in the category.
One of my recent trainees, a computer shop salesman, provided me with a classic example. He carried a ready reckoner around in his pocket, a methodically-prepared summary of all the product and pricing combinations to prompt the various sell-up and add-on options applicable to each of the computers he was selling. Although his first option was always to qualify the customer's intended application, then sell 'up and away' from the price leader, his fallback plan was to never allow the customer to walk away - to potentially spread the word that his company was not competitive. His was not the attitude of getting the sale at any price though.
He was well aware that this could lead to a customer expectation of never wanting to pay full price. Instead, he would take the high ground with some compulsory bundling. After all, his laptop computers even came with 'plug and play' USB sockets through which you could connect a growing array of interactive devices - literally plugging in additional sales.
In his mind, it would be irresponsible to sell something like a portable computer without at least the very basics - appropriate applications software, internet access, a protective carry bag, the essential anti-virus safeguards, and a means to externally back-up the customer's precious data. On average, he was bundling five or six items into his laptop and tablet sales, regularly turning a barely-profitable $699 sale into a $1000-plus transaction, yielding a gross profit return well above the store average. He even got it to the point of developing high quality graphics to support his proposition and adding credibility to it by displaying the options on the screens of the very computers that he was selling. This is the epitome of not only knowing and understanding your product, but directly applying that knowledge to both expand the sale amount and maximise the profit. Using this bundling technique allowed him to combat even the toughest 'price-match' threats emanating from either his nearby discount competitors or internet searches.
This is also a very responsible customer retention initiative, with intending buyers comforted by knowing that the store genuinely has their interests at heart, and is not prepared to leave its customer's valuable purchases unprotected - a very easy, and very accountable, add-on selling initiative. Importantly, it also avoids having to give the impression that the store is not competitive. Neither the sale nor the customer is lost, and the integrity displayed could well lead to some serious referrals. This scenario will not always be available to us, but we will certainly give ourselves better odds by being prepared for it. I can't imagine too many products that lend themselves so ideally to this as computers, or perhaps motor vehicles, but even so, you may be able to develop a relevant approach for your marketplace. For example, just as cups go with saucers, earrings go with bracelets, and golf balls go with golf clubs, there will be a host of upgrade options and like-product bundling alternatives for the particular products you sell.
You really must ask yourself the question: 'Do you have your supplementary selling options pre-planned, check-listed, and at the ready?' If in doubt, think of the supermarkets. It is certainly no accident that unplanned purchases, the enticing impulse buys at the checkout, are a major contributor to their average sale-per-customer numbers, or that the selling of accessories and attachments is designated a separate activity/profit centre at new car dealerships.
During my training sessions, I also stress the need to develop the habit of introducing these add-ons early in the sales process. Intangibles like extended warranties and tech-support packs are often introduced as early as the product qualifying stage by casually saying, 'This product qualifies for our extended warranty offer'. This is a variation of the well-tried direct marketing tactic where words such as 'qualifies for' and 'is eligible for' are applied to the customer, rather than the product. In this case, the word 'qualifies' serves as a powerful but subliminal (reliability/peace of mind) benefit in support of the particular product, subtly intimating that not all products would qualify. It can then be brought back late in the sale as a (minor-point, alternate-choice) question to effectively close on both the product itself and the add-on service.
This same 'introduce it early and introduce it every time' discipline applies even more so to financing options. By breaking down the mental affordability barrier up front, the seed is subliminally sown to comfortably up-sell and incorporate add-ons right throughout the sales process. This approach is particularly effective in allowing us to progressively break each value-add down to its lowest denominator, typically expressed in terms of a mere 'cents per day' investment. It is certainly a better option than having to wheel it into the conversation in panic mode late in the sale - after we have struck a budget roadblock.
We should recognise that from a return on investment point of view, these intangibles are the 'crème de la crème'. Not only do they return a higher gross profit than the physical products they support, they involve no stock investment, and take up no shelf, floor, wall or warehouse space. It makes good sense then to table them every time, and to introduce them as early as possible. So, just because this is called 'up-selling' and 'add-on selling', it doesn't mean that we have to regard it as only an end-of-sale activity. Sure, the best time to sell something is when the customer has just bought, and this does apply particularly well to accessories, but the seed should be sown early and allowed to grow right throughout the sales presentation.So, there is obviously a lot more to product knowledge than just having read the brochure.
This understanding of the wider product, service, and support applications is the underlying secret to true product knowledge. This is really what it's about. Any wonder then, that knowing everything about each product, including all the additional selling options tagged to it, remains the best way to create our point of difference - particularly over the less interactive, largely inanimate, website purchase options.
It may well be then - that for all those small business storeowners who form the backbone of retailing in every sector of every marketplace in every corner of this world of ours - resurrecting the age-old knack of face to face selling becomes their saviour. Remember, it is people who will forever buy our products, it is people who will forever use our products... it makes good sense then, that it is people who will forever sell our products!
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