Graham Lock

In over 30 years of owning and operating Retail Stores, nothing and I repeat nothing frustrates me more than walking into a store and either being totally ignored or greeted with the old, “Can I Help You” as, it is at this point that all the money, time and effort you have put into presenting your product, idea or service has just been totally wasted.

I want you to think about your own automatic reaction to this comment; and I bet that in 99% of occasions that this has happened to you, your response has been “just looking“, and what makes this even worse is that the salesperson you are paying, has probably just thought, “Boy, I’m glad, now I can get back to what I want to do”

At this point, I hope you are horrified, how could my staff do this, well to understand this, you have to ask yourself, “How Do I Greet Clients”, have I actually spoken to my staff and more importantly followed through with training and mystery shoppers to make sure they are doing what is needed to be done, and if the answer is no to any of these points, then it is your fault that your business is not going in the direction you want it to. Don’t despair as this can be easily rectified with some fun training.

So What Can Be Done?

In an ideal world every client that walks into your establishment would walk up to you and say, “I want this” but as we know that is not the case. Every business has its own unique product or service that it is offering, and it is up to us to engage a client to find out what their needs are. Sure some clients are just killing time today, but imagine if we made an impression on that person by our greeting and genuine interest that made them remember us when they were ready to purchase. Do you think the, “Can I Help You” then walking off to play computer games or engage in some non productive activity will encourage them to re-visit your business, I doubt it.

Greetings Must Be Genuine & Sincere, ideally product or service related and ALWAYS Open Ended, meaning that your question will make your client think before answering, giving you the information you need to move forward.

Let me give you a couple of examples.

• A home brew store I have worked with greet their clients with, “Hello Welcome to our store, do you drink beer or spirits? (Note the Open Ended Question) Their answer automatically gives you some direction on products to present, and more importantly enables you to start establishing a relationship with them.
• The Apple Computer Store near my office, greets their clients with the assistants name, immediately followed by, “Have You Used an Apple Before” if the answer is no, it is followed up by, “And what do you use your computer for” (Note the Open Ended Question) It is then quickly followed by a demonstration of how what you do on a computer can become even easier with an Apple.

So your homework is to work out a greeting or greetings that will enable your staff to engage with a client, to find out exactly what they are looking for and then lead into your presentation.

I would love to hear your thoughts and ideas, so please email me with what type of business you have and your ideas for greeting your clients. I will respond to all of them with my thoughts.

Until Next Time
Best Regards
Graham Lock www.grahamlock.com.au

I Think I am Making Money, Am I.

Break Even Point

Wouldn’t it be great to know how many sales you need to make to cover your costs? Or the exact point in each week when you’ve stopped working for your staff, lease and suppliers and started working for yourself? That’s why your break-even point is a handy number to know.

Your break-even point is the point at which revenues (the income from your sales) exactly cover your expenses. You need to start by calculating two other numbers:

• Gross profit margin. Sometimes called the contribution margin, this is the percentage of each sale that’s left over after the costs of that sale have been covered. It equals your total sales minus your variable costs, expressed as a percentage. Say you’re selling a product for $100 and that it originally cost you $60. The gross profit is $40 and the gross profit margin is 40%.
  
• Fixed costs. These are the costs that you have to meet, no matter what. They usually include wages, rent, leases and administrative costs, while excluding the variable costs of sales. Let’s imagine your fixed costs are $100,000 a year.
  

Once you know those numbers, you can work out how many sales you need to make to break even:

So, using our product example:

In other words, you need to sell $250,000 worth of product to break even each year. That’s 2,500 products or just under 50 a week. So if you’re averaging 15 products a day, you start working for yourself sometime after lunch on Thursday.

Break-even analysis can be a powerful management tool, because it helps you work out:

• The profitability of your product
  
• How far sales can drop before you start making a loss
  
• How many units you need to sell before you start making a profit
  
• The effects of changing your price or sales volume
  
• How much more you have to sell at current price levels to cover increased costs
  

Risk Reversal
=  More Sales & Better Results

The greatest fear your potential clients have is getting ripped off or purchasing something that may not do what they want it do.

So How Do You Overcome This Fear?

Several years ago I owned a consumer electrical home appliance store in Melbourne called “Lock’s Sony Centre” This store specialized in high priced Sony large screen televisions and other Sony products. High priced low margin products, which we had to turn over in large numbers to be profitable. Also products that could be purchased from many other stores, so what could we do that would help us achieve more sales.

• Firstly, our staff were trained to really qualify what our clients needs and wants were, we asked questions like, will this be the main screen for the whole family, how big is the area you are installing it in. These questions may not be relevant to your product or service, but the more questions you ask, the more chance you have of showing your client that you really do care about their needs, the more chance you have of creating a new client. Ask yourself this, have you ever done business with someone you didn’t like, so by spending a little time in establishing a relationship with your client, can only make them feel more at ease.
• So now we have established exactly what their needs are, and have shown them our product or service and explained to them the advantages of this, and how it will fill all of their needs. This is a very important step, because once you know exactly what their needs are, you are past the halfway stage of generating the sale.
• Now ask your client, Have we found the product or service  that will do everything you have asked for, let them respond, in 90% of cases they will say Yes, the more Yes’s we can achieve, the closer you are to achieving the sale. If they so no you haven’t, great, so let us ask what we have missed out on, as our greatest goal is to have them 110% happy with their decision.
• Once we have achieved all of the above, you will have a client that will be feeling a lot more at ease in dealing with you.
  Very Important That All of the Above Steps are Followed.
• It is at this stage we will Ask For The Order, and this request can be as simple as saying something like, “Ok Mr & Mrs Smith what day and time would suit you for delivery?”. If your client still is reluctant to go ahead, try the following.
• It is here where many sales fall over, and it is here that Risk Reversal comes in as one of the most powerful tools in your selling kit.
• RISK REVERSAL OK Mr & Mrs Smith, firstly are you happy with your decision re this product or service, does it do this (ask each question individually and wait for their answer), if you have qualified correctly in the early stages of your meeting, most of their answers will be Yes, if not find out why it doesn’t suit and modify accordingly. Once we have satisfied our new friends that this product does indeed do everything they need, we then say the following.
• Now that you are sure of this product or service, we would like to arrange to have it to delivered and setup in your home for 7 days FREE, as this is the ideal way to really satisfy yourself that you have indeed made the correct decision.  To enable us to do this we ask that you allow us to imprint your credit card for the amount owing, this will not be charged to you at this stage. Your new product or service will then be delivered, setup etc on a day that best suits you.
• Right now you are probably thinking Graham has gone mad, the truth is most of my staff did think this at the time. They are firmly believed that clients would rip us off, use the product or service for a few days and then return it. The reality is, that providing you have qualified your clients correctly, the moment they have the new product or service in their home, showing it to their friends and family, the sale is completed, and you have a new client that will become a raving fan of your honesty and integrity. We make sure that there is a minimum of 2-3 calls made to the client during the 7 day period, this is done to make sure that we have made the right recommendation, and that they are happy with their decision.
• Seven days from delivery, and yes we do deliver it, as this also enables us to make sure that it is a correct address, we call and congratulate the client on their wise decision. At the same time, we ask if they wouldn’t mind writing a testimonial for us, as Testimonials are another way of overcoming fears.

The end result for our business was a 70% increase in sales, more contented clients than we have ever had, and all of these clients recommending their friends and families to our store.  Throughout these campaigns, we only received 2 products back, and each of these were repacked and sold at a slightly reduced margin.

So How Can You Introduce Risk Reversal Into Your Market?

Please contact me personally if you would like to see how this could be introduced into your business www.grahamlock.com.au