You need Retail Math knowledge to run your business profitably.
Retail organizations – in fact, any type of organization – must have figured out this equation early on….
Sales – Expenses = Profits
Or have they?
Plenty of businesses go ‘Out of Business’. Maybe they didn’t have it figured out.
While that is surprising, to say the least, it’s not that far-fetched when you think about it. Not everyone is a numbers person.
Sometimes enthusiasm for a great idea overshadows the reality.
Suffice to say that any business person needs to understand how to figure out how they are doing in terms of dollars and cents.
The end result will always be the same if no one is paying attention to the numbers – failure.
Even a company that is selling their products like hotcakes can’t rest on the fact that they have a product that everyone wants.
Perhaps the hotcakes cost more to make than they are selling for.
Perhaps there are way too many people working in the hotcake store and all of the profit is being spent on wages.
It only makes sense that we have to know these things, right?
There are sayings that come to mind here: “Look after the pennies and the dollars will take care of themselves.” And, “A fool and his money are soon parted.”
If your store is part of a chain, chances are pretty good that your Head Office personnel are watching the financial picture pretty closely.
But that would be the big picture.
As a Store/District/Region Manager you still need to measure, monitor and follow up on all KPI’s determined to be relevant for your store(s).
So, let’s say you track and review all of your KPI’s regularly. What do you do with what you learn?
Do you sit down with each staff member and talk about your findings?
And during those sessions, do you hold the employee accountable and discuss ways to achieve more?
If you answered yes to these questions you are ahead of a lot of other Store/District/Region Managers out there.
If you answered no, you would benefit from some training on retail math, metrics and KPI’s.
And if you do talk to your employees about KPI’s but come up short when it comes to how to improve any metric, then you should seek help for that.
If you must have a policy manual, don’t let employees hide behind it!
It should go without saying that retail management and associates should never quote company policies and procedures to customers.
However, as evidenced every day in retail stores and call centers everywhere, it does need saying…and repeating… over and over….as my little story illustrates.
Just recently, in a mild dispute over some additional charges being levied on one of my mobile phone accounts, I was told in no uncertain terms that “It’s our company policy and there is absolutely nothing that can be done about it.”
When I politely asked to speak with someone higher up in the organization I was told, again “It’s just our policy and, no matter who you talk to, you’re not going to get what you want.”
So, then, Company policy trumps everything? No matter who I talk to? Hmmm.
Although I highly doubt that the Customer Service Specialist (The title is quite funny, isn’t it?) was correct, I didn’t want to spend my time and energy debating the point…so I just cancelled the service and they will no longer have to concern themselves with this pesky customer!
And they will no longer enjoy the revenue associated with my account.
Anyway, your company may have established policies and procedures to assist in the organized operation of the business; to help employees understand the framework the organization operates within; to help people do their jobs and to protect the company’s assets, reputation, etc.
They do not, and should not, exist to use as ammunition against customers.
If a customer specifically asks about the company policy on a particular topic, there’s no harm in answering provided it is something for public consumption and not a strictly internal or confidential matter.
But, when a customer challenges the way you do something, or the way you don’t do something, there’s no reason to hide behind a book.
In fact, quoting company policy is just plain cowardly.
It means you don’t have the training, depth of understanding or intelligence to deal with the issue…or the customer.
So, just don’t do it. And don’t allow it to be done by anyone in your organization.
For those charged with producing the policy and procedure manual, it can be tricky.
If you are too specific, you run the risk of slowing down the operation with bureaucratic nonsense and red tape. Not good.
But if you are not specific enough, employees will come up with any number of different interpretations causing a distinct lack of consistency within the organization.
Also not good.
Here is what we suggest. Don’t bother with a manual. Or, if you must have one, have a one-pager!
Ok, ok, we understand that you probably will want to create something to be used as a guideline so, be specific as far as instructions go (meaning how to do something) but not so specific that you end up with hundreds of pages of boring reading…or you state things that border on ridiculous.
The truth is, to be really specific, you will be writing a never-ending book because you simply cannot cover off each and every possible scenario at store level.
There is a better way. Highly focused, customer service oriented organizations have it figured out.
If you absolutely must have a book…the key is to write it in such a way that it ensures the reader will understand the one common thread running throughout those parts which affect customers and that is….reasonableness.
Make sure that there is no situation which would call for an unfriendly approach or negative result for the customer.
Now, you may say that what is reasonable to one person may not be reasonable to another. And that is true, of course.
But if your hiring and training practices are excellent AND your organizational culture includes a healthy respect for the customer, this should not be an issue.
Like I mentioned above, highly focused, customer service oriented organizations have figured it out…and you can too.
All of us are looking for success in our retail businesses. Apart from and beyond everything else, sustainable success requires consistency.
What do we mean by that?
We mean being consistently great in all aspects of our retail business.
Short term successes are possible due to some lucky combination of factors. But, we can’t rely on lucky combinations. They are too few, and far between.
What we need to do is to set the foundations of our business right so that we can repeat our successes consistently.
This also has a profound impact on customer satisfaction.
Your customers expect a certain level of performance from you on the basis of the perception you created.
By being consistent at your skill set and service levels, you satisfy the minimum expectations.
And if you put a degree of constant improvement process in place, you’ll create a winning combination for your retail operation.
At minimum, some of the areas you must deliver on a consistent basis are:
- Sales Skills(Trained staff on professional retail sales skills)
- Quick response to all sorts of customer issues (Rapid response procedures in place)
- Clean, tidy and efficient store environment (Great visual merchandising and maintenance)
- Streamlined and customer friendly checkout process.
Pretty basic, right? Yet, just wander around the malls and shopping centers and see for yourself how many retailers are failing in consistent delivery of the basics.
Companies who understood this simple philosophy went on to create empires.