We've talked previously about the importance of knowing your customers, building a strong, realistic picture of your ideal buyer and turning it into a customer profile that you can use to target your best potential customers more effectively.
But did you know that a great way to understand more about how people buy and the sales process is to work in retail sales? I'm going to share the top lessons I learnt from working a part-time retail job before starting my marketing career.
Before I started Red Guerrilla Marketing, during my college years, I worked in my local Blockbuster Video (yes with VHS videos and everything!) as a customer service rep.
Although primarily targeting various rental media (videos, DVDs, and video games), we were also under a lot of pressure from our area manager to drive sales of various weekly / monthly combo-deals; packages of 'the latest movie + bag of popcorn + bottle of cola = £XYZ'.
So, through trial and error, some clever talking, and largely going off working with that worked best we usually hit our targets, but I learnt a lot of valuable lessons along the way about how people operated when it comes to purchasing and took away a lot of helpful knowledge that still holds true today despite the change in the marketing landscape.
Lesson 1 - Know your customer
If you pick up just about any book on sales and marketing, you'll probably see there, on page one, would be some lesson or other on the value of knowing your customer. This age-old business sales maxim still holds true today as it held true in that local town where our Blockbuster shop was.
The average socio-economic grouping in the area where I worked was quite low with most customers not wanting to part with any more of their hard-earned cash than absolutely necessary. Budgets were very tight, and so after shelling out close to £4 for a video rental, to try and upsell a customer a premium add on to nearer the £10 mark was just not going to happen.
The lesson here would have been to target customers' needs more effectively by understanding their motivations and financial situations and speaking to them.
What did we learn?
- You'll never sell your products and services to their full potential until you identify your ideal customers, their buying habits, and decision making process.
- Once you know your ideal customers, start aligning your sales and marketing activities (and goals) to them.
Lesson 2 - Value wins (...most of the time)
Financial motivation aside, one of the main challenges in hitting our sales targets was the presence of a rather large supermarket 200 metres away from our shop. Not that the supermarket sold videos or DVDs, but they did sell cheap drinks and snacks: the very items that we were trying to push as part of a bundle deal (video + popcorn + bottle of Coke).
Sure, there was a great saving to be had by taking our bundle deal, but there was an even better deal to be had by simply walking for 5 minutes up the road to a different shop; remember, lesson one told us that our customers had very little money, so they would happily sacrifice the relatively small convenience of buying their items in one place if it meant they could save money. It was just better value to them.
Customers want value in their purchased products and services. Whilst this doesn't have to mean 'cheap' or 'budget', it does mean that what you offer your customers has to be of a sufficient level to justify the costs.
What did we learn?
- When faced with a purchase decision, consumers will opt for the choice that has the most value.
- 'Value' is a perceived trait. Work out what value your products and services offer and how best to show this to your target market.
- Competition (local or otherwise) plays a large part in value: if your customers can make a like-for-like purchase from your competitors then you have two options:
- Reduce your prices / increase your offering
- Work harder to increase the perception of your value over the competition's
Lesson 3 - Distance and effort trumps value (...sometimes)
In a counter-point to the very last lesson, consumers will allow themselves to make a purchase of a higher-cost, lower-value product or service if the distance or effort involved to get the best value is greater than the customer's current ability or desire to pursue it.
For example, whilst many of our customers would decline our offers and visit the local supermarket instead, we did have other customers who either didn't have the time to go elsewhere, or just didn't have the inclination to do so; they may have also had a higher disposable income which factored into this.
This is also known as the captive-audience effect, much used by theme parks and cinemas for years. We all know that theme parks charge over the odds for relatively standard products, such as soft drinks, but they do so largely because your ability to go elsewhere and make a purchase of similar products is severely limited.
What did we learn?
- Consumers are more likely to make a purchase if the effort involved in chasing a better value offer is perceived to be higher than the difference in value.
- If you have a captive audience you can sell more effectively for a higher price, but...it's not a great sale.
Lesson 4 - The hard-sell doesn't work well
There was a time (probably somewhere in the 80's) where the Boiler Room approach to sales worked to a degree; that aggressive, high-pressured, time-sensitive technique that really coerced the customer into a deal. But this isn't the 80's and customers can't be forced into buying something they don't want to. Certainly not with the level of choice and variety they have on board today.
We were encouraged to push push push! our deals and offers and virtually refuse to take no for an answer. Problem was, we weren't selling what people really wanted. Coupled with the previous lessons in value and effort (which was minimal to visit the nearby supermarket), we were not off on the best foot.
Whilst no one would argue that there is a skill and subtle art form to selling well, the modern successful salesman is more of a helpful guide that joins the customer in their buyer's journey. He's not the brute-force selling machine of days gone by, designed to pressure and cajole clients into deals they're not right for.
What did we learn?
- You can't sell people products and services they don't want.
- If you do manage it, it won't be a great sale and opens the door for large buyer's remorse and potentially reputation damaging backlash.
- Good sales processes work with the consumer to identify their current needs, highlight your company's ability to fill those needs, and help them make the decision on their own.
Lesson 5 - Some customers want to be sold to: sell to them!
Part of being able to sell well means being able to stop selling sometimes! Think about it, have you ever spent hours, days, weeks on phone calls, emails, proposals, face to face meetings, and other work in order to get that sale? But it doesn't come off in the end, or it does but the project ends up being a headache, the client causing you more trouble than you bargained for?
Our sales targets were quite harsh back in the Blockbuster days and selling expensive products to low-income customers is tough. But rather than try to desperately sell everything to everyone, we capitalised on those customers who aligned to the products we sold and they sold much better that way and often with additional products included too!
By understanding who your customers are, how they purchase, what they purchase, and how they like to be sold to, you'll be able to sell much more effortlessly; mainly because you're not really selling at all - you're merely aligning the right customers and their customer profile to the right products and services...yours.
What did we learn?
- Not every customer is ready to buy, let alone from you.
- Don't waste time with customers who aren't a good fit for you and whom you are not a good fit for - it works both ways!
- Identify where a customer is in their buyer journey and focus different efforts on different stages.
Lesson 6 - Just because it has a high margin doesn't mean it's the best product to push
I'll be honest: we did OK, but we often missed a lot of our specific sales targets (mainly the popcorn bundles) for that month. This was largely due to the first couple of lessons in this article. Those bundles had a really high margin, so of course they were a great win for the company, even with slightly reduced prices as part of a bundle.
But they didn't sell...
We did, however, make up for this by pushing other products and additional rentals that didn't have quite as large a margin as the bundles, but sold much more successfully.
It's important not to get lost in chasing large profits and high-margins because they're not always the best products to sell. Sure, from a company point of view they're probably the best products to sell, but if they're a nightmare from a physical selling stand point then maybe it's time to look at your better performing products and services and maximise their potential.
What did we learn?
- Products with the highest margins aren't always the golden goose when it comes to sales
- Spend your time and energy on what can and does sell well and maximise the selling potential there.
Savvy shoppers means you need a better sales process
You can see that people are more clued up when it comes to product research, purchase decisions, and being sold to. You've got to really understand your customer in today's marketplace and customer profiling is an evolving process that's tended to much like a well-kept garden.
Have you worked in a retail job before your current role? Do you have any lessons you'd like to share? Leave them in the comments below!