A great compensation idea for Christmas from Harry Friedman's webinar today.
The webinar done by Harry Friedman today was really terrific. Lots of good stuff in 45 minutes but there was a great nugget for Christmas.
So here's the nugget I received today and its mind blowing. But first a little story.
Yesterday I chatted/consulted with a jeweler who has an 80% closing ratio in his store on product. Hard to believe, I know. So I asked the question 7 ways to Sunday and he and his manager swear its 80%.
But he's not happy. He has lots of debt and it comes from him over-buying. But that's another story for another day.
You see to increase sales typically the store has a 30% closing ratio on product and if it went to 40% (sell 1 more person) that would be a 33% increase in sales. That's HUGE.
But he's at 80% now. His average sale is only $200.
There's our opportunity. Why is his average sale $200? More than likely poor buying on his part. So lets try getting it up just $50 to $250.00.
So lets not talk about increasing his average sale to $250 but increasing the average customer INVOICE to $250!
That means ADDING ON! Someone buys a $200 pair of earrings, suggest buying gifts for his kids/nieces/secretary/mother also and add on a $50 bracelet. Bingo average INVOICE (has 2 items) goes up $50. if your store sells 30 items a week and you do that on half of the invoices that would mean a sales increase $39,000 just on a $50 add on. Multiply it times anything else and it could be huge.
So Harry's webinar today was about how to accomplish that. How to get the staff to add on! You have to reward them.
If your store pays a commission of 5% on sales, make it 5% for a sale of the first item. Sell 2 items and pay 7%, sell 3 items pay 8%, and so on.
Me personally I'd make it jump. Maybe do this:
Sell Units on an invoice Total commission % paid
4 or more 10%
Now there's a reason to add on, "I get paid more".
Don't worry about the higher commission, there's no overhead on selling a second item, the gross profit is ALL profit. The 1st item paid for its share of rent and advertising. The second is free!.
"Shoot while the ducks are flying". This is the time of year to start this immediately and if you have never paid commission in your life create your own sliding scale UP to reward members of the staff.
But you have to role play and practice this. This staff can NEVER say "would you like to also buy the matching earrings?"
Customers are put off because no one likes to be sold anything.
Better yet say this:
"You know this bracelet is just the ticket to go with these earrings. Who else is on your list this year?"
During the webinar Harry said it was being recorded and it would be available on his website. When I find out I'll send out an email about it.
Director of Add On Sales