Retail System Failure

Seth Godin had an interesting post on the failure of systems.   

The problems with systems?
1. if you rely on them too much, your people stop trying, and your hiring people realize they don't have to get such great people.
2. sooner or later, it's going to get copied by the competition. It's a lot easier to copy a system than it is to get great people.

3. Systems are meant to control something.   In sales, while you want a little control as possible to provide your sales people the ability to be able to close the sale.   The more control or structure you add to the sales process, the less likely your sales people will be able to close the sales that fall outside that structure.

So what does this have to do with retail?

Go shop at a big box retailer and I guarantee that you will experience the following:

• You will be offered an extended warranty plan
• You will be offered a credit card plan
• You will be offered at least 3 accessories that match with your product.

Retailers have created a system that they train each and every new employee to follow with every customer.    A series of steps that is supposed to take the customer from initial greeting to the end of the transaction.

As Seth stated, the biggest problem with a system like this is that it creates a lack of creativity in the sales process.   Instead of trying to hire people that can be dynamic in the sale process and manage the sales process, they hire people who can follow the sales process.     I call these people Glorified Clerks not sales people.   They don't understand what they are doing, they are simply following the steps.  With the right management, some of these may turn into good salespeople but more often than not Glorified Clerks burn out and move on.

Here the typical sales system in retail doesn't work

• Customers are not dumb.  They will figure out your sales process after they shop a few times with you an start avoiding the steps.    This will result in your sale people losing sales because the customer isn't following the rules anymore.
• Customers don't know your sales process and will often move out of the path.  A poor salesperson cannot react quick enough and you end up losing the sale.
• And to Seth's Point, it is easy to copy so your competition can create a sales process that counters yours, at take the sale away from you.

My recommendations:

• Create a process as a path, but allow your sale people to make dynamic decisions based on each transaction.   Give them guidelines not rules.
• Don't manage to the process, manage to the sales persons behavior.  Your salesperson is the best judge of when something should be offered to the customer.   Manage to the results at the end of the month.   Use the steps in the process as guideposts not as a track that the there is deviation from.
• Don't micromanage a process but do perform on the spot or curbside coaching.
• Reward creativity in the sales process.  If it is ethical, moral and legal and accomplishes the ultimate goal of making a sale, is it really a bad thing?

Does this mean that all sales systems are bad?  No, it just means that you shouldn't create a sales strategy that is based on your team following the steps of a system.