OEC Consultant's Corner
Getting it Right in Luxury Retail
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By: Susan Onaitis Affluent consumers have more choices these days. They also have become savvier, more demanding, and less brand-oriented. In the highly competitive luxury retail market, it's no longer
enough to have the "it" product; you also have to provide the "it" experience.
Anyone who walks into a luxury retailer starts with a high level of expectation. Store appearance, ambiance, and visual merchandising play a role in meeting that expectation, but the crucial element is interaction with sales consultants. Research shows that American consumers will allow a retailer two "mistakes" before they shop elsewhere. The customer interface offers the greatest potential for dropping the ball. A mediocre salesperson signals that the retailer is investing in everything but the customer experience.
Retail executives constantly tell me how hard it is to hire the "right" people. Before you can even identify who they are, you have to define the experience you want them to deliver. What will make it consistently wonderful, unique, and better than what your competitors offer? After you've identified and hired the right people, you need to give them the right skills to deliver the right customer experience.
Sales Training is not the Whole Story
Too many retailers believe sales training is a panacea. By itself, training will not improve the performance of sales professionals. It must be part of a process that includes the following elements.
- Assessment—"Mystery shopping" all or a significant portion of the client's stores reveals the status quo. For a recent assignment, I made two visits and two phone calls to each of 15 stores owned by a high-end jeweler. Using a proprietary protocol, I evaluated the skills and customer-centricity of salespeople; the performance standards they seemed to be following; and other factors that contribute to the customer experience, such as store cleanliness, merchandise displays, and policies. The end result of this step is a detailed analysis and recommendations for management.
- Performance standards—The next step is to sit down with senior management to look at existing performance standards (if any), define the desired customer experience, and
come up with a set of standards that will produce that experience. In effect, the standards provide behavioral guidelines for sales professionals across all stores and serve as the basis for hiring, evaluation, and compensation.
- Customized sales training—Only now is it possible to create and execute an effective sales training program: one tied to the performance standards. We create highly-engaging,
interactive sessions that give salespeople a chance to practice in role-playing situations. The training also provides insight into customers and their wants, needs, and expectations to dispel preconceived notions that affect behavior.
- Manager training—Department and/or store managers receive supplemental training in how to observe and coach sales consultants on a daily basis, provide useful feedback, and
keep records. Accountability and reinforcement are the keys to success. Feedback is important immediately after training. Typically, 60 percent of what has been taught is forgotten within 10 days unless it's reinforced.
- Ongoing feedback—Mystery shopping provides reinforcement and accountability at the manager level and helps clients determine whether the investment in this process has been worthwhile. Over time, employees turn over and people revert to old habits, making continuous feedback—ideally once a month—important.
- Customized performance evaluation—We develop performance evaluations that are tied to the standards and to compensation. Human beings respond to carrots and sticks. If we aren't held accountable, we get lazy; if we re rewarded, we step up to the plate. Achieving the "it" customer experience is the result of a process. Eliminate any of these steps and you weaken that process, reducing the likelihood you'll satisfy today s very demanding luxury consumers.
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The Ayers army of consultants balances generalists with specialists in a range of areas, giving us the ability to match the right consultant to each OD assignment. We have worked with clients in industries that include aerospace, financial services, health care, technology, and telecommunications, as well as luxury retail. For more information, contact Managing Director Joan Caruso at joan.caruso@ayers.com or 212.889.7788.
Susan Onaitis is a consultant who focuses on sales performance improvement and negotiation skills for clients that include the FORTUNE 1000. The author of Negotiate Like the Big Guys, she is writing a book about selling to the affluent.
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