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Category: Staff Training

The Three People to Solve the Problem

If you’re in retail, at some point you will have a customer with a problem. And your success will depend on how well you solve that problem in the customer’s eye.

The key is knowing the three people who can solve the problem. Those people are (in no particular order):

  • The person Most Capable of solving the problem
  • The person Closest to the problem
  • The person Least Busy at the time of the problem

The problem for most businesses is the order in which we prioritize that list. From a business owner’s standpoint the ideal priority would be:

  1. Most Capable
  2. Least Busy
  3. Closest

From a customer’s point of view, however, the order would be:

  1. Closest
  2. Least Busy

Notice that I left off “Most Capable”. The customer expects that everyone will be Most Capable. And that’s where the smart retailers succeed. They equip their front line staff with the tools to solve problems so that customers get satisfaction right from the start.

There is nothing more frustrating to a customer who already walked through the door loaded for bear than having to wait around while incompetent fools run off in search of an already over-worked manager to approve a return or refund or some other simple issue.

Conversely, there is nothing so satisfying as a customer than having the first person who greets you being able to fully take care of your problem.

The best thing you can do for your staff is walk them through the basic problems that arise in your business. Show them your thought process and the criteria you use to make decisions. Then empower them to make those same decisions for the customers.

Sure, they might make a mistake or two. Sit down with them when they do and talk through their decision-making to see their process. Use that time to show them (again) how you would handle it. The good ones on your staff will get it quickly. Plus, they’ll feel more ownership for the satisfaction of the customers in the first place.

There will still be a time when the person closest to the situation can’t solve the problem. But the more often they can, the better your customers will feel about you and your business.

And isn’t that the whole point?

-Phil

What Are You Tracking?

You can’t manage what you don’t measure. Here are two numbers you should be measuring this holiday season.

Traffic Count: How many sales do you have per day (Monday, Tuesday, Wednesday…)? Per day part (morning, afternoon, evening)?

Knowing this can help you schedule your staff to better meet the peaks and valleys of your daily & weekly sales. It also helps you measure the success of your marketing and your customer service. If traffic counts are up, you’re doing something right. If they are down, you better figure out why (and it isn’t just the economy).

Average Ticket: How much is the average transaction or sale? Which employees have higher or lower averages (if applicable)?

This number helps you measure the effectiveness of your sales staff and promotions. It also helps you understand your merchandise better. Are you getting the add-on sales? If not it could be that you don’t have the right products to complete a customer’s purchase. If you sell dolls, you better sell doll stands. If you sell electronics, you better sell batteries.

Measure these two numbers. They have a lot to say about your success.

-Phil

A New Twist on Training New Employees

I just hired seven new employees for the store. Now comes the fun part – training.

My standards are high. My customers’ standards are even higher. They have an expectation about our store that may seem unfair in these days of self-serve retail. They expect to be waited upon. They expect to have their questions answered quickly, correctly and with good cheer. They expect the staff to be friendly, knowledgeable and efficient. They expect us to have what they want, get it through the checkout quick, giftwrap it for free and have them on their way before their child has time to even think about a meltdown.

Oh yeah, and they want to have FUN while doing it.

In short, my customers are expecting the world, and I am planning on giving it.

The seven new employees had two things in common – a desire to help others and a strong work ethic. Those were the characteristics I required in this round of hiring. Now comes the task of teaching them about the toys, about our services, about our policies, about our cash registers, about our philosophy. There is a lot to learn. More than I can remember. More than I have time to teach.

I did two things you can copy for your business when you have to hire & train new employees.

First, I created a checklist of all the skills the new employees need to learn. I broke it down into main items and subcategories to make sure nothing was overlooked. Simple things like closing procedures or bagging toys were on the list along with educational material like How Toys Teach, and Phil’s Top Ten Toys. Cash register procedures, time clock procedures, delivery policies and every other service we offer is on the list.

And next to each item on the list is a blank line.

The second thing I did was empower my current staff to train the newbies on all of these procedures. The only caveat is that the employee who does the training has to put her initials on the newbie’s checklist next to that item.

There are three immediate benefits of doing training this way.

  1. The regular staff gets a sense of responsibility in training the new hires. They feel more empowered which leads to even more responsibility.
  2. Everyone is accountable for how well the training is accomplished. If your initials are on the checklist, you better have taught them well. Knowing that you’ll be evaluated, too, has the regulars honing their own skills in the process.
  3. We’re building camaraderie right from the start. The new staff are interacting more with the old staff and getting to know them quicker than if they were just working along side each other.

Sure, I’m still involved in the training. Some of my involvement is direct teaching the skills I want to teach, but most is just overseeing the process and evaluating the new employees’ skills as they learn. Best of all, I get to see who of the regulars has the ability to teach and who needs more work on their own skills.

All in all, through this process everyone is improving their abilities to give the customers the kind of service they expect. And I’m getting seven new smiling faces ready for the frontlines this holiday season.

-Phil

Uncover the Diamonds in Your Hiring Process By Eliminating the Biggest Hiring Mistake

You’ve hired and fired enough people to know what makes a good employee and what doesn’t. Yet, your track record of finding diamonds in the rough doesn’t seem to change. I know. I’ve been there. It took me years to learn this logical approach, but now I have a proven process that eliminates the biggest mistake in hiring and helps me find diamonds at every turn.

The biggest mistake we make in the hiring process is to look for experience instead of character traits.

There is a simple process for identifying the right raw ingredients for the job.

  • Make a Master List of all the traits of the perfect candidate.
  • Separate the Master List into two columns – Teachable and Non-Teachable traits.
  • Develop interview questions to identify the Non-Teachable traits.

If you are looking for a top notch salesperson, you need someone who is friendly, approachable, outgoing, honest, caring, and empathetic. Yet, what is the first thing you usually check? Sales Experience.

All the experience in the world will not make someone more caring, approachable, or empathetic. Years and years on the sales floor does not equate to honesty or friendliness. Experience cannot teach the non-teachable traits.

Just as the potter can’t make fine China with coarse clay, you can’t have a great employee if you don’t start with the right raw ingredients. Every job has certain skills or traits necessary for success. Many of these traits are teachable. Some are not.

Three simple logical steps. Follow them in your hiring process and your hiring will improve immediately. You will more quickly identify the people who already possess the innate skills needed to do the job. If they have all the Non-Teachable traits and Experience, all the better. But without the right traits first, they’ll never shine under pressure.

You need coal to make a diamond. You need certain non-teachable traits to make a diamond employee. Experience does not guarantee success. The candidate who possesses the non-teachable traits from your master list has the best chance to be successful for your business. And once you know this, you’ll be finding diamonds at every turn.

And as for those teachable traits in the other column? There is your training program, your chance to polish those diamonds to make them shine. Here’s a form to use for separating the traits for each job.

It’s simple, it’s easy, and the method is free for anyone to use. If you agree, send this to everyone you know who hires and fires.

If you don’t agree, leave a comment. I’d love to hear your take on the matter.

-Phil

Helping the Independent Retailer Succeed

“An expert is a man who has made all the mistakes which can be made, in a narrow field.” – Neils Bohr

Whenever I make a mistake, I am usually the first to admit it. Probably makes me unique. But if you’ve been near me when I goof, you’ve heard me say, “Not the first time I made a mistake, certainly won’t be the last.”

After growing up in a retail family and spending 16 years running a top level independent retailer, I’m now the guy Neils Bohr was talking about. Yes, a bona fide expert in independent retailing. And I’m here to share my experiences with you.

I’m launching a new website just for the independent retailer – http://www.philsforum.com/. There is so much a business owner needs to know to run a successful retail operation.

You have to be great in four categories.

Great Products – having the right products in the right amounts merchandised the right way at the right prices to make your customers happy and make the registers sing
Great Customer Service – providing a top notch experience for your customers through a fabulous, well-trained, friendly and caring staff with customer-friendly services and attitude.
Great Marketing – getting the word out about your business in a consistent and well-planned manner with a powerful message that connects deeply and drives traffic through the doors
Great Financials – knowing where your money is and what it is doing to help you succeed

Rare is the independent retailer who is strong in all four categories.
Few have mastered even three.
Most independent retail owners are strong in only one or two.
All think they know more than they do (except for the smart ones among you)

The truth is we all need to keep learning.

Even a guy like me is still learning. I’m constantly trying to become better in every category above. And, having made and learned from a bunch of my own mistakes (not to mention the mistakes of others), I can say I’m pretty close to becoming one of the Few.

No, I’m not a financials kind of guy. Talk to your accountant on that. But I do know about Marketing, Merchandising and Customer Service. Stuff that has elevated Toy House and Baby Too to be recognized as one of the 25 best independent retailers in America.

Now I’m going to share our secrets.

The website is loaded with freebies – ebooks and articles you can download and start using right away. This blog is there, too. I’ll be writing to give you insights and new perspectives on the world of retail and how to grow your business.

I’m also looking for your feedback. What hot button issues are graying your hairs? In which category do you need the most help? What topics do you want me to cover?

Your success is the goal. I already have a successful business. My purpose is to help you get there, too.

Watch What You Say

1:06 pm Saturday, April 18th, phone in my right hand listening to the ring tone. Calling a downtown restaurant known for good lunches in the sleepy city of Jackson where on a Saturday half of downtown shutters the doors before the sun hits it’s zenith. They answer…

“Hello, {Restaurant Name}”

“Hi, how late are you open?”

“One o’clock…” (big pause)

“Oh, you just closed?”

(Exasperated) “No, one o’clock AM!”

Geez, sorry for asking…

First impressions go a long way. Unfortunately many first impressions are made by wrong assumptions. The person on the other end of the line assumed that everyone knew they were open at night and therefore assumed that “one o’clock” could only mean “one am”.

Imagine if I had called at 12:30 pm. I might have assumed that “one o’clock” meant “in thirty minutes”. And they would have lost any chance at my business that night.

Simple little misunderstandings caused by assumptions that lead to lousy first impressions. If you want to make an assumption, assume that every caller is a first time caller to your business and knows little to nothing about you. How would you treat that caller differently?

Exactly! You’d give them more precise and useful information and avoid embarrassing and potentially costly misunderstandings.

Put a little time into your next staff training to evaluate faulty assumptions you might make when you answer the phone. Use this story to illustrate the point. It may be the least expensive best training you’ll use this year.

-Phil

PS Full disclosure: It was my mom who made the call. She almost hung up at hearing “one-o’clock”. Although she and her friends are going there tonight, her first impression will be a lasting one, and they’re going to have to work really hard to overcome one seemingly innocuous answer and win her over.

Three Mistakes to Avoid

Circuit City is just about gone. The remaining stores are liquidating as we speak. This once fabulous chain (one of the 11 companies featured in Jim Collins’ book Good to Great) made two of the three classic retail blunders so common in a rough economy.

First, they slashed prices. In December 2006, in an effort to gain “market share” (the usual wrong-thinking excuse) Circuit City cut prices on flat-panel TV’s so low, there was no way to recoup the lost profits. The result? The worst loss in their history – $16 million.

Price-slashing is a desperate move at best, and usually backfires. Why? Most businesses never do the math. They don’t calculate the extra costs involved in selling the many more pieces they have to sell to make up the lost margin. If you make $500 per TV sold and you cut the price by $250, you need to sell twice as many TV’s to make the same profit. How much extra staffing and advertising will it take to do that? And how realistic is it that you’ll sell that many? Chances are you’ll spend more trying to sell the extra units, and also fall well short of your goal of units sold. Net result? Huge losses.

But, you say, Wal-Mart does it. Really? If all Wal-Mart did was slash prices they’d have been long gone years ago. No, Wal-Mart revolutionized operational efficiency. They made it possible to be successful on smaller margins. The volume came later as they gobbled up competitors in their ruthless expansions.

Unfortunately, price-slashing seems to be the retail mantra du jour. Sears & K-Mart have entered the fray, with JC Penney’s close on their heels. How’s that working out for you guys?

The only price-slashing that works is marking down the dogs as discussed in the previous post. Unless your business strategy is to go after the highly unprofitable Transactional Customers, price-cutting is only a recipe for disaster.

The second blunder Circuit City did followed right on the heels of the first mistake. After realizing such huge losses, in 2007 Circuit City went on an expense-cutting spree. The first to go? The high-priced, experienced sales personnel – the front-line sales staff with knowledge and sales expertise. To save money, Circuit City fired all the highest paid sales associates and replaced them with lower-paid hourly workers. And as anyone could have predicted, customer service dropped just as quickly.

When you’re selling commodities, maybe this works. But when you’re selling technology that evolves faster than the average mind can keep up, experience counts for something. Knowledge and know-how are your ally.

Unfortunately for Circuit City, this loss of knowledge in the sales staff left them with only one tool to compete in the electronics market – price. And we all know how that worked out.

In tough times, when sales are slow, one of the biggest expenses is payroll. The temptation is to cut payroll to save money. But when cutting payroll means sacrificing customer service, you’re just cutting off the nose to spite the face.

When your goal is to be the expert your customers can trust, payroll is no longer an expense, it is an investment. Instead of cutting staff, teach them to service better, to connect stronger, to sell more. Help them become more profitable for your business. Treat them like an asset, like an investment, and leverage that asset to get you the best returns it can.

If you have to make cuts, trim the fat. Cut out the inexperienced, non-productive, non-performing staff. Just as you would drop the stocks that don’t perform in your portfolio, drop the staff that don’t perform. And don’t worry about what they make. There is a reason all those Circuit City employees were making so much – they knew more, they worked more, they sold more. And the same is probably true with your staff, the most productive members make the most (if not, they deserve a raise). Keep the productive ones, give ’em raises, and cut the non-productive staff.

Price-Slashing and Payroll Cutting, two big mistakes you can’t afford to make in this economy.

The third? Marketing. We’ll save that for next time.

-Phil

Are You Riding the Mommy Tsunami?

There is a tidal wave of babies being born. A group large enough to rival the heralded Baby Boomers. And the moms having these babies are the most educated, wealthiest, most connected group of moms in history.

They have a name for this group – The Mommy Tsunami.

When the Baby Boomers had their kids it was called the Echo Boom. Other names like Gen X and Gen Y have been used to describe the echo boom. Whatever you choose to call them, this group is now having babies.

But with one difference.

This group is waiting until later in life to have kids. This new mom is typically about 30 years old, college educated, and has invested a few years in her career before stepping out to start a family.

She has the power of the Internet in her purse, a camera on her phone, and an account with YouTube.

She grew up in an over-saturated advertising market so she is cynical to all forms of marketing. She ignores the hype. She pooh-poohs the over-the-top claims. She calls out anything that she knows is a fake. She doesn’t bite when you say “biggest sale ever!!” because she knows you’ve got another sale lined up two weeks later. She knows what the fine print says. She knows that no matter what you say, everything has a downside.

And if you cross her, she’ll have a video on YouTube within the hour and ten thousand of her closest friends will see it by nightfall. She’ll destroy you with the power of a tidal wave.

Yet, the Mommy Tsunami has more dollars to spend than any group of moms in history.

How do you reach this powerful, cynical, knowledgeable consumer?

The answer is quite simple – honesty.

Product knowledge used to be your advantage. But with the Internet at her fingertips she probably knows almost as much as you do about what you sell. You can’t trick her into thinking this is the only option out there. She knows what the competitors have. She researched it last night in her pajamas. She knows what features every product in the category offers, and has probably read a half dozen reviews to know which features actually work.

Now she needs someone to put that knowledge into context to show her how each feature fits into her life (or doesn’t fit). She needs someone willing to be up front about the downside she knows is inherent in everything. She needs someone to tell her which features will actually benefit her in her lifestyle and which ones the company threw on just to jack up the price. She needs a salesperson to show her the benefits and the shortcomings.

Total, unabashed, show-all-the-blemishes honesty.

She needs someone willing to listen to and fulfill her needs, not shoehorn her into something that suits your needs. She is thrilled when you tell her why not to buy something. She is thrilled when you go out of your way to get what she wants instead of just what you have. She is thrilled when she knows you are looking out for her best interest. She is thrilled, mainly because it happens so rarely.

She knows that businesses lie. Every great offer comes with a fast-talking disclaimer. Everything is “subject to change” and never in her favor. Every great price has a hidden fee. In this ever-increasing self-serve world, everything is a take-it-or-leave-it proposition. And too many times she is leaving it.

Honesty means sometimes saying, “I don’t know,” followed by, “Let me find out.” Honesty means sometimes saying, “I can’t help you here,” followed by, “But let me call someone who can.” Honesty means being transparent in your ads, your products, your sales pitch, and your closing. Honesty means being transparent in all of your business practices, in what you stand for, in what you believe.

The Mommy Tsunami has the power of a Tidal Wave and can crush you just as fast. But just ask one of those crazy big wave surfers in Hawaii. They’ll tell you the thrill of riding the wave just once outweighs the risk every time.

Happy Surfing!

-Phil

Keeping Fit the Triathlon Way

Jeff Beagle talked me into doing a triathlon a few years ago without saying a thing.

Jeff is a personal trainer who had a client larger than me that he was training for the Clarklake Triathlon, a 0.5 mile swim, 14 mile bike, 4 mile run event. I figured if that guy could do it, so could I, even though I hadn’t run 4 miles collectively in the past 8 years.

I love to swim. I like biking. But running is my Achilles Heel figuratively and literally.

In the two months prior to the event I swam daily, biked a few times a week and ran when I could. Sure enough, on the day of the event I finished 17th… …in the swim portion. Overall I came in 396th out of 400 who completed the race. I was dead last in the 4 mile run. Two little old ladies watching the race passed me with their lawn chairs in hand I was so slow.

But I finished.

Talking to Beagle afterwards about training for the following year, he gave me great advice. “Phil, I know swimming is your favorite, but put the swimming away and spend all your energy on running. A 10% improvement in your running will have far greater impact than a 10% improvement on your swim.”

How true, how true.

Business owners can learn a lesson from this.

Like a triathlon, we have three elements of our business in which we must perform: Product, Finances, and Marketing. The best businesses are strong in all three. Most businesses are strong in only one or two. And most business owners are only good at one or two, and usually only passionate about one of those three. Thus we spend our time and energy on our passion, improving only slightly, instead of focusing on the weakest, least fun aspect where the most room for improvement lies.

As you make your plans for 2009, do your business a favor. Evaluate which part of your business needs the most help. (Here’s a hint. It’s probably the part you like the least.) Then put all of your focus on improving that area.

A 10% improvement in my swim would have moved me up to 394th. A 10% improvement in the run gets me to 356th.

If marketing is your weakness, sign up for Roy William’s Monday Morning Memo and go to the bookstore and buy his “Wizard of Ads” trilogy. You’ll learn more about advertising than you can imagine and a few things that will help your business in other ways, too.

If finances are your weakness, set up an appointment with your accountant (get one if you don’t have one already) and start going over the numbers. You can’t manage what you don’t measure and you can’t measure what you don’t know. Have your accountant teach you or hire a business financial coach. A good coach will pay for himself or herself many ways over.

Chances are, the product is your passion. That’s how most people get into business. You know your products. You know what’s selling. But do your employees? Is your training program getting the results you want? Also, do you have a good inventory management system? Do you have a solid Open to Buy program that keeps your inventory in line and cash flow moving?

Think like a triathlete. Work on your weakness. That’s where the big results take place.

The following year I moved up to 367th. Time to work on the bike:-)

-Phil

How Do You Stay Motivated in Tough Times?

I am on the Retail Advisory Board for a juvenile industry trade magazine. Each month we answer a question as a regular feature in the magazine.

The question for February was, “During these tough times, how are you staying motivated and how do you share that motivation with your staff?”

What?! Stay motivated?!

In tough times you either stay motivated or close up shop. There really isn’t anything in between. In fact, you don’t need tough times for this adage to work. If you aren’t motivated, you shouldn’t be in business, whether the economy is good or bad.

But I can see where this question originates. We have been bombarded with negative story after negative story from the credit crisis to the auto industry to the Chapter 11’s to the so-called National Bankruptcy Day on Feb. 9, 2009 when the CPSIA law goes into effect.

That’s a lot of bad news and can be a big drain on anyone’s psyche.

But if you’re in business and want to stay in business, motivation is in ample supply in a tough economy. More so than in a good economy.

When times are good, we become complacent. So what if we screw up with a customer here or there? Another customer is waiting in line right behind her.

When times are tough, we know we have to maximize every single customer. We have to be at the top of our game every single time. It’s like being up to bat with two outs and the bases loaded in the bottom of the ninth with your team down by one, or standing at the free throw line with 8.6 seconds left and your team up by one. Concentration is at a peak. Every muscle is locked into the task at hand. You know there is no room for error. Motivation? When the game is on the line, motivation is sky high.

The same is true for business. When times are tough and your very existence relies on you doing your job well, you don’t have to search for motivation, it finds you.

Then again, some stores don’t get this. You’ve probably been to one. The sales clerk barely looks up from his station to acknowledge your presence. If he says anything at all, it’s to gripe about how slow is business. He blames it on the weather, the economy, the media.

That is the difference between the successful stores and the stores just hanging on. Successful stores look at the tough times as opportunities. There is more market share to be won during tough times than in good times.

Customers who are tighter with their money are shopping around more to find better shopping opportunities. And it’s not just about price. They’re looking for stores who best meet their needs, whether it is advice, selection or convenience.

The best stores recognize that tough times are when you make your move, when you go after disgruntled customers, when you expand your selection, your hours, your services to meet their needs. Tough times are when you ratchet up your training programs to keep your staff on their toes and in tip top shape. Tough times are when you differentiate yourself from the crowd by “risking more than others think is safe, dreaming more than others think is practical, and expecting more than others think is possible.” Tough times are when you pull out all the stops to make your business better – not just better than the competition, but better than your own standards, better than the highest standards in your industry. Tough times are when you sharpen the ad campaigns, not throttle them back. Tough times are when you work a little harder, a little longer, a little smarter.

The stores that do best during tough times are the stores that embrace the motivation all around them and see the opportunities that are inherent. And when the good times finally arrive, these are the stores that will be standing the tallest.

Tough times are as Darwinian as it gets. The strongest survive. What more motivation do you need?

-Phil