Profitable Solutions

A Little Employee Education Goes a Long Way

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Our bi-monthly column on retail solutions offers Main Street directors insight and information so they can provide the necessary tools to help retailers become more profitable and actively participate in the improvement of their district. This column is written by Tom Shay, principal of Profits Plus and a fourth generation retailer. His company specializes in working with retailers to help them increase their profits as well as build their businesses for the future.

During the holiday season last year, I was listening to a radio newscast that was trying to illustrate the depth of the recession with an example from a mass merchant. The retailer anticipated hiring 24,000 seasonal employees who would become the stores' frontline customer service at its locations all across the country. Their employment would start in mid-November and terminate at Christmas. The big hook of this news item was that this retailer received more than one million applications for the 24,000 positions.

A representative for the retailer explained that the employees would be part time and that they would receive sales training before being placed in the stores to interact with customers. As many newscasts do, this one included a sound bite of the interaction between a customer and one of these new salespeople at the check-out counter. The sales clerk first stated the amount of the purchase to the customer and then asked, "do you have a [name of store] purchase rewards card?"

The customer responded with a simple, "no."

The employee then asked, "do you want one?" and the sound bite ended shortly after that. Listening to the words of the sales clerk, I realized that the person had no sales skills whatsoever. 

Curious to see if this radio broadcast was only a fluke, I visited several locations of this mass merchant. Each time, I made a small purchase so that I could interact with the cashier. My first customer service interaction was with the greeter just inside the store. Their job was to watch for people bringing any merchandise into the store so they could be directed to the return counter.

Detective Work

Having made a decision about what I would purchase before I went in, I wandered around looking for the item. Not once did a sales clerk approach me. My only other encounter with an employee was at the cash register. My experience could have easily been substituted for the one I heard on the radio. Each cashier asked if I had a store card and each time I responded that I did not. Sometimes the cashier offered a card like the cashier in the sound bite, and other times the cashier said nothing more and simply completed the transaction.

What I learned from all of my visits to the stores was that the first person (the greeter) and the last person (the cashier) with whom a customer would interact demonstrated the least amount of customer skills. The philosophy of the mass merchant seems to go against the thinking of what many of us who grew up in retailing were taught. Perhaps that thinking is best summarized by one of the old adages of retailing found in the acronym "ACES," which stands for "Around Customers Everybody Sells." 

"Around Customers Everybody Sells" means that all of your employees understand that they are the face of the store to your customer. For example, when the people working in your back office are approached by a customer while on the sales floor, they can't tell the customer to find someone else to wait on them. The same is true for the person who is checking in merchandise or stocking a shelf. Whatever their task at hand, it can – and must wait – because the customer in the store at the moment should be served. Of course, the office person might not know where an item is displayed or the answer to the customer's question. But, he or she can make sure the customer is introduced to a salesperson who can provide the necessary assistance.

My observation is not meant to condemn the mass merchant. The scenario I witnessed in those stores should not be surprising to most readers of this column. All of us have had similar experiences. My concern is how often that situation occurs in Main Street businesses.

Many Main Street businesses profess that their personal touch with customers is their competitive advantage, but the question asked today is: how can that be an advantage if employees aren't constantly working to hone their sales skills? Are your local business owners taking the opportunity to improve the quality of the salespeople working in their stores?

In the case of the mass merchant in this newscast, let's take a look at the math behind the scenario of its hiring plan. More than one million people applied for 24,000 jobs; that means approximately 42 people applied for each opening. Is the most surprising component who was hired by the mass merchant? Were they the most qualified people for each job? Did the mass merchant spend more time teaching the new employees how to perform certain tasks than on providing quality customer service?

I use the example of how a mass merchant approached hiring holiday help to accent a point: there are a lot of people out there who are looking for work. But a large number of applicants does not ensure that you will always get qualified people.

Commit to Improving Staff

There are two lessons to be taken from this story.

The first is that you can, and should, always be looking for people who could be better employees than some of those you currently have. This is not to suggest that you should adopt a mercenary attitude for your business. Instead, you have an obligation to yourself and to your business to hire the best employees available, and an obligation to your
customers, especially, to have the best possible business.

When you have employees who aren't meeting your standards, those employees are not doing their best to help make your business profitable; they are not placing the importance of your business first.

What's more, in this scenario the employees who are doing what is asked of them may be wondering how long you as an owner or manager are going to tolerate underperforming employees.

For all of these reasons, it becomes your obligation and opportunity to improve the quality of your staff by finding a new employee.

The other lesson is that as a Main Street business owner you have an opportunity to improve employee performance by creating and maintaining a staff education program.

From my many years of experience as a retailer, I found that the best employees are those I continually taught how to sell, how to perform various tasks, and how to understand all about the products and services that the business offers.

Providing this education to your employees is neither expensive nor labor intensive. It simply requires meeting with your entire staff on a regular basis. A one-hour staff meeting held every other week, before or after business hours, is sufficient to provide your staff with the education that will make great customer service more than a claim—it will become a reality and one of the main reasons why customers return to your business. These staff meetings could include techniques on how to sell; how to answer the telephone; or how to stock shelves and maintain the appearance of the store.

In today's ever-challenging marketplace, given your competition from mass retailers' longer hours and greater selection of products and services, your competitive advantage has to be more than a statement. It has to be something that you can demonstrate to your customers and to your staff.

As you begin a new business year in 2010, differentiating your business may be one of your New Year's resolutions. Make a commitment to yourself and your business by ensuring that you have the best employees possible and maintaining an education program in your business to make sure that resolution is carried out.