Retail Selling
The Dynamic Manager’s Handbook On
How To Increase Retail Sales
by Dave Donelson
Donelson SDA, Inc.
Copyright 2011 Dave Donelson
ISBN: 978-1458185648
Smashwords Edition
A note from the author
The Dynamic Manager Handbooks are for entrepreneurs, managers, and others who want to succeed in small business by learning more about management techniques, operations, and best practices. Each volume in the collection is devoted to a single topic. The material was extracted from the Dynamic Manager Guides, my series of books based on my experiences as a business journalist, consultant, and entrepreneur.
Table of Contents
Chapter 2 – Creating An Effective Retail Sales Environment
Chapter 3 – Case Study: Should Retail Art Gallery Prices Be Negotiable?
Chapter 4 – Case Study: Selling Intangibles In The Automotive Aftermarket
“When you take the sales initiative, opportunity knocks a lot louder.”
Back in the good old days, when retail stores had living, breathing employees who helped customers choose their merchandise, it was standard procedure for the salesperson to try to increase the size of each individual sale. They did this very effectively in several ways that can be adopted by today’s retail shop owners who are interested in increasing the top line on their income statements.
One of the first is simple up-selling, where you guide the customer to a selection with a higher price point than the one they came in to buy. In an extreme example, let’s say that the customer came to your hardware store to buy a wrench. An up-seller would make at least an attempt to sell him or her a complete set of wrenches instead. Outlandish? Maybe, but you never know until you try. And, as long as the suggestion is done quickly and without pressure, the customer won’t mind.
A good way to manage this kind of interchange with the customer is to ask them what problems they’re having while you’re getting the item they came in for. That’s also the time to get some basic information like what kind of project they’re working on so you can give them accurate advice. Then, even if they say “no thanks” to the suggestion, you can reply with “Let me at least give you a price so you can think about it.” There’s no pressure on the customer in up-selling this way.
Add-ons
Another sales-building strategy is to suggest add-ons to the original purchase. Back when men wore coats and ties to the office (is anybody besides me old enough to remember that?), you couldn’t buy a jacket in a men’s store without the salesperson offering you a shirt, a couple of ties, and a pocket handkerchief (now I’m really dating myself). The modern shop owner can and should do the same thing. At a garden center, for example, once you’ve sold the customer a rose bush you should suggest new pruning shears and maybe some long gloves.
Add-ons should be, but don’t necessarily have to be, related in some way to the customer’s original purchase. It’s also helpful if they have a lower price point. They are truly impulse purchases for the customer, although the impulse originates with the shop salesperson.
There is no reason these same tactics can’t work for service revenues, too. The garage customer that buys a set of adjustable shocks, for example, might also be interested in a chassis tune. One incentive for the customer to make the additional purchase might be that you can save him or her some money by doing both jobs at the same time. It can also save the customer something else that’s valuable—time.
Up-sell Bargain Hunters, Too
There are some situations where you might think that up-sells and add-ons aren’t possible, like when a bargain-hunting customer comes into the shop and says, “I’m looking for such-and-such, and I only want to spend X dollars.” There are several ways to deal with that kind of low-baller. The first is to call their bluff and see how serious they are about their budget by telling them you don’t have anything in that price range and offering to show them secondhand merchandise or a cheaper job. Note that you’re not refusing to meet their needs, just their price. You’re also sending them a not-so-subtle message that their expectations may be too high without telling them flat out that they’re an idiot.
Another way is to just ignore what they say about their budget and start at the high end of the market and work your way down. One advantage of this approach is that it gives the customer a chance to see options they might not even know exist. What’s more, after they’ve seen that royal banana split, it makes their plain vanilla cone look a whole lot less appealing.
Yet a third approach is to give them alternatives and let them choose. Even if Product A and Product B are both priced higher than they say they are willing to pay, it’s always very possible that their budget will change if you do a good job of selling the higher-priced options. This is also a good way to find out what’s really important to them, both in terms of what they are looking for and how much they are really willing to pay.
Sell The Right Thing
A similar customer with pricing on the mind may insist they can get by with a cheaper product even when you know they are ultimately going to be dissatisfied with it. It’s important to sell this customer the right product the first time if at all possible, because they will probably blame you for their dissatisfaction later—even if you sold the cheap product to them under protest. Even worse, they may spread the bad word to their friends. Selective memory is a powerful force for evil.
One way to up-sell them is to play up the differences between the cheaper and the better products while you stress the very small differential in their prices by breaking it down into smaller amounts. Over the life span of two brands of high performance tires, for example, how many pennies per mile does the twenty-dollar price difference amount to?