Today, we’re discussing a topic close to my heart and crucial for your bottom line: employee sales training, especially for high-revenue stores.
Now, I know what some of you are thinking. “Bob, my store is pulling in over a million in gross revenue. We’re doing just fine with our promotions and discounts. Why fix what isn’t broken?”
I will show you why that mindset could cost you more than you realize.
The Training Stigma: Breaking Down the Barriers
Let’s address the elephant in the room: the stigma around training. I’ve heard all the excuses:
- “My experienced associates already know what they’re doing.”
- “With such high turnover, why bother investing in employees who might leave?”
- “Training takes too much time and money.”
- “Our current sales strategies are working well enough.”
Sound familiar? I thought so. But here’s the thing: these assumptions are not just wrong but actively hurting your business.
Let’s break it down.
The Myth of the “Experienced” Associate
Just because someone has been on your sales floor for years doesn’t mean they’re selling effectively. In fact, without proper training, they might be reinforcing bad habits or outdated techniques. Or they may have learned on the job with catch-as-catch can – that’s not creating amazing customer service.
The Turnover Trap
High employee turnover is often a symptom of poor training, not a reason to avoid it. Employees who feel competent and confident in their roles are more likely to stay. Plus, a solid training program can help you quickly bring new hires up to speed, reducing the impact of turnover when it does occur.
The Real Cost of “Saving” on Training
Think skipping training saves you money? Think again. The cost of untrained employees far outweighs the investment in a good training program. We’re talking about:
- Excess inventory due to poor stock management
- Overreliance on discounts to close sales
- Missed upselling and cross-selling opportunities
- Customer service issues leading to returns and negative reviews
These hidden costs add up fast, bleeding your profits dry.
The Numbers Don’t Lie: The True Cost of Untrained Employees
Here are some real numbers that’ll make you sit up and take notice.
Consider a store with 14 employees and $2 million in annual revenue. The average sale is $104. That sounds pretty good, but let’s dig deeper.
- Annual revenue per employee: $142,857
- Total annual transactions: 19,231
- Transactions per employee: 1,374
Now, here’s where it gets interesting. Let’s examine what happens when we implement proper training and slightly improve performance.
The Power of Small Improvements
- Increase the average sale by just 5%:
- New average sale: $109.20
- New annual revenue: $2,100,025
- That’s an increase of $100,025!
- Bump up the number of transactions by a mere 3%:
- New number of transactions: 19,808
- New annual revenue: $2,060,032
- Another increase of $60,032!
- Now, let’s combine these effects:
- New annual revenue: $2,163,034
- Total increase: $163,034
Are you seeing this? We’re talking about an 8.15% increase in gross revenue. For a $2 million store, that’s over $160,000 additional revenue annually. Not only is that at the low end of results, but it is all from modest training improvements!
Beyond the Numbers: The Ripple Effect of Training
But it’s not just about the immediate revenue boost. Proper training has a ripple effect throughout your entire operation:
- Improved Customer Satisfaction: Well-trained employees provide better service, making happier customers more likely to return and recommend your store.
- Increased Employee Engagement: When your team feels competent and successful, they’re more engaged. This leads to lower turnover rates and a more positive store atmosphere.
- Reduced Reliance on Discounts: Skilled salespeople can sell on value, not just price. This preserves your margins and builds a stronger brand.
- Better Inventory Management: Trained employees understand how to sell effectively, reducing overstock issues and improving cash flow.
Commit: How to Implement Effective Training
Now that I’ve got your attention, you’re probably wondering, “Okay, Bob, I’m sold. But how do I actually do this?”
Here’s your game plan:
- Start at the Top: Leadership needs to buy in fully. Your managers should be your best salespeople and trainers.
- Create a Comprehensive Program: Cover product knowledge, sales techniques, customer service, and store operations. Make it engaging and interactive.
- Make it Ongoing: Training isn’t a one-and-done deal. Schedule regular refreshers and updates.
- Measure and Reward: Track key performance indicators (KPIs) and reward improvements. This could be through bonuses, recognition, or advancement opportunities.
- Leverage Technology: Use e-learning platforms to train across locations and accommodate different learning styles consistently.
- Role-Play, Role-Play, Role-Play: There’s no substitute for practice. Regular role-playing exercises can dramatically improve your team’s skills.
The Bottom Line: Training is an Investment, Not an Expense
Listen, I get it. When looking at your P&L, it’s tempting to see training as just another expense to cut. But that’s short-term thinking, and it’s holding your business back.
Think about it this way: You wouldn’t dream of using outdated technology in your store. So why are you okay with outdated skills on your sales floor?
A Challenge to High-Revenue Retailers
Here’s my challenge to all you million-dollar retailers: Take a hard look at your training program (or lack thereof). Calculate the potential revenue increase based on the numbers we discussed earlier. Then, implement a robust training program like my SalesRX for the next six months.
I guarantee you’ll see improvements in your revenue and every aspect of your business. Your employees will be more confident and engaged. Your customers will be happier and more loyal. And you? You’ll be wondering why you didn’t do this years ago.
Wrapping It Up: The Choice is Yours
The choice is yours. You can keep relying on discounts and promotions, watching your margins shrink and your staff turnover climb. Or you can invest in your team, equip them with the skills they need to succeed, and watch your business soar to new heights.
As the Retail Doctor, I’ve helped countless businesses transform through practical training. It’s not magic; it’s just good business sense. And in today’s competitive retail landscape, it might just be the edge you need to thrive.
So, what’s it going to be? Are you ready to commit to training and unlock your store’s true potential? The ball’s in your court. Let’s make retail great again, one well-trained associate at a time.
We are pleased to mention that the author Bob Phibbs aka the Retail Doctor (who has contributed to BRA with outstanding articles like this one and so many others that we have reposted over the past few years) has also contributed to BRA monetarily. We value his relevant retail insight and encourage you to learn more about his offerings by clicking on the following link to his website: www.retaildoc.com
– Doug Works, Executive Director BRA
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