How to stop the Buddy’s, Chiefs, Champs and Mates (your clients) being asked if they’ve been fixed-up.
We all know that we never get a second chance to make a good first impression. As part of an assignment to increase sales and margins with an agribusiness, we conducted mystery shopping surveys and documented over 30 different client greetings!
Two of my favorites were: “G’day mate, have you been fixed-up yet? My sense of humour is not always funny so I refrained from replying, “No, but my wife’s been on my back about getting it done.” The other memorable greeting was, “Hey Chief, do you need a hand?” This may have been an appropriate greeting if I was wearing a head dress made of feathers.
The promotional (or communication) mix is one of the four P’s of marketing: Product, Price, Place, Promotion. When prompting and selling consumer or retail products, the order of importance is:
However, when promoting and selling the majority of agricultural products, which is business-to-business selling, the order of importance is:
Best Practice: remember and use client's names
The first step in establishing a relationship with another person is to remember and use their name or accepted nickname. If though, a client rides into your store on a horse, wearing a head dress made of feathers, then you could call him Chief.
The benefit of setting personal selling standards
Reason #1: Improve outputs by improving inputs.
As general rule, improving business outputs – gross profit, sales, client satisfaction, low levels of rework etc. – is dependent on improving business inputs in sales. We have helped clients improve sales and margins by agreeing on and implementing sales improvement and margin protection standards, policies and procedures (inputs).
Reason #2: Not everyone is the same and the majority of clients would rather we use their names and not call them mate!
When it comes to dealing with clients you should just treat them how you want to be treated. Right? No, wrong. Not everyone is like you. You wouldn’t develop a marking plan based on a random sample of one survey, would you?
We encountered a sales person in a rural supplies store who was discounting most of their sales. He explained that he was just treating clients how he wanted to be treated when he went shopping!
Set personal selling standards.
You could meet with your team to discuss and agree on standards for:
What you could do with the personal selling standards once staff have signed off on them:
So then Chief...all the best in setting personal selling standards for your team and stopping the 'Buddy', 'Darls', 'Mates' and your clients being asked if they've been fixed up!
It takes a bit of work to transform a motley group of individuals into a well-oiled team, but the result is worth it!
We’ve all heard the saying, “working on the business, not in it”.
Reflecting on what we do and making adjustments is a natural, innate part of being human. From the moment we stood upright and left the cave we have looked for ways to make the difficult easier. That’s why a woman invented the wheel.
But what about you and your team? Do you have any formal continual improvement processes in place?
Formalising and properly structuring your team’s continual improvement processes means you’re putting in place the mechanisms to work on your business.
Step 1: Agreed team structures
I once asked a manager when discussing the business outcomes he wanted to achieve, “I understand that you have goals for your team…but are they your goals, or their goals?”
Teams must have an agreed understanding and acceptance of:
If we don’t have agreed goals and processes, then against what do we measure team performance?
The team goals you and your team could set might include:
Step 2: Team accountability
The team goals then form your monthly meeting agenda. Reporting on team progress in achieving team goals creates team accountability.
Conducting regular team meetings where team members support each other does not just contribute to a healthy bottom line, it also contributes to team member health as well. Social connectedness and social support through being part of a supportive, caring team creates positive personal health outcomes.
Step 3: Individual team member accountability
Team goals are then broken or cascaded down into individual team member position descriptions, and critically, team member report templates (accountability). At each monthly meeting, each team member provides a report on their progress in achieving their individual goals which contribute to team success.
A manager once complained about a staff member’s performance, particularly in regard to punctuality and not completing weekly stocktakes and product orders. So, we included these outcomes in the staff members report template. They reported on their punctuality and how they were going with the weekly stocktakes and product orders.
This was not punitive; we did this in a supportive manner. When they reported on improvement, the team celebrated the improvement.
Individual report items could include:
Everyone works on the business
Collaborative problem-solving works on your business and has a positive impact on staff morale and wellbeing.
When we follow this process, it creates the circumstances and mechanisms for a group to transit to a team by developing team members small group social skills, problem solving, conflict resolution, listening, challenging, clarifying, etc.
Research reveals that teams:
And remember, there is no ‘i’ in team, and to quote Bart Simpson, there’s no ‘u’ either.
Having a difficult conversation is, um…difficult. But if we have a process and know push words, difficult conversations can become less fraught. Knowing the right words to use at the right time and with the right manner can make our lives easier.
Before I get into the detail of having a crucial conversation, here is a question. If conflict were a dog, what type of dog would it be? When asked that question, most people choose a dog that either creates fear, like a pit bull or blue heeler, or a small yapping dog that creates annoyance or anger.
The flight (fear/worry) and fight (annoyance/anger) responses are hard wired into our brains. So, when faced with interpersonal conflict – the need to have a crucial conversation – it’s easy to feel the emotions that stem from the flight or fight response.
Good, healthy relationships can only endure when conflict is dealt with openly and honestly. This prevents stagnation and stimulates curiosity and creativity. Groups suffer more from the lack of conflict that they do from conflict itself. Lack of conflict in groups is a symptom of apathy.
The VIP process: Validate, Investigate, Problem Solve
Conflict can cause anger, distrust, frustration, fear and a host of other emotions – and if these feelings are not validated first, rational problem solving is inhibited.
When we’re angry or fearful our adrenalin flows faster, and our strength increases by about 20 percent. The liver, pumping sugar into the bloodstream, demands more oxygen from the heart and lungs.
The veins become enlarged and the critical centres of our brain, where thinking takes place, do not perform as well. In short, the blood supply to the problem-solving part of our brain is decreased because under stress a greater portion of blood is diverted to the body’s extremities – to help us with fight or flight.
By acknowledging or validating the emotions, the blood flow increases to the problem-solving part of the brain and we start to calm down.
Listen to understand, not to agree or disagree. We need to listen to understand in order to accurately validate what others are feeling and what we’ve heard them say.
We can’t expect others to listen and not interrupt us if we don’t listen to them without interrupting. Even wait a couple of seconds once they’ve finished in case they’ve got more to say.
When responding, do so in a calm and gentle tone or manner.
Parent manner (angry tone): “Don’t raise your voice at me. You’re being unreasonable”
Child manner (scared tone): “I didn’t mean to make the mistake and I’m trying my best”
Adult manner (calm tone): “You’re disappointed that we didn’t get the information right the first time?”
Be aware of your thoughts. Our thoughts trigger emotions, both rational and irrational. For example, “This &^% is having a go at me and is being rude and aggressive” is irrational. “he’s not having a go at me, he’s just expressing his frustration in a really inappropriate way, he’s not attacking me personally” is rational.
How the VIP process works
Them: “What on earth were they thinking when they made that decision! How stupid! No wonder this place is stuffed”
Us: (validate) “So you’re dumbfounded and frustrated by the mistake we made in the products you ordered last week?”
Them: “Yes” (said we less intensity) How hard can it be?”
Us (validate) “It is such a simple task that we didn’t get right”
Them: “Yes” (said in a calm tone)
Investigate: Ask permission to ask questions. This is a subtle way of asking someone to shut up, especially when they’re over talking or being dominant.
Us: (use their name) “So Bob, what would you like us to do to fix the problem?”
Them: “Well, I suppose everyone can make mistakes. Can you put the product on the next available truck you’ve got heading my way and everything will be all right”?
By staying calm in our adult ego state we’re better equipped to solve the problem, even if the solution is to agree to disagree.
A person attending a training course once said “If someone repeated back to me what I just said, I’d thump him. This is stupid” The reply “So you’d get angry and violent if I repeated back to you what you just said to me, is that right?” He said, “Yeah, that’s right” and he didn’t get angry or thump me!
Give others the VIP treatment…especially at home.
Inventory Management is often left as ‘the next thing on my list, when I get time’, but diligent and regular control of your inventory is crucial to ensure your capital investment in stock is financially productive.
It is a common strategy within the rural industry to ‘load up’ on high valued cropping inputs prior to the planting season because ‘we just can’t afford to run out of stock’. We all agree stock-outs must be avoided, but we sometimes fail to recognise or understand the financial pressures of running an overstocked business.
Carrying the right level of stock at the right time to meet your customer’s needs is crucial, and that is why you need an inventory management plan tailored for your business needs.
The most common reaction to an overstocking problem is to ‘close the order book and get the stock value down’. The by-product of this approach inevitably results in running out of the key 'bread and butter' stock lines that turn the till over on a daily basis. Why? Because you are focusing on the symptom and not addressing the root cause of the problem.
Effective inventory management is about buying more, more often, it’s not about buying less. The aim of the game in any merchandise business is to increase revenue, which in turn increases the cost of goods, which increases your inventory purchases.
Therefore, an inventory management plan must control what you buy, when you buy, how often you buy and how much you buy. Working with your supplier partners to forecast requirements and agree on an inventory protection plan for your business provides the added security and confidence for you to support their brands and buy accordingly.
A best practice approach towards maintaining an effective inventory management plan must focus on a number of key business processes that complement each other.
How do you know if your current inventory management processes are working?
Stock Productivity Index (SPI) is a simple measure that can be used to report on the financial productivity of the working capital you have tied up in inventory. The formula to calculate SPI is Gross Profit Margin multiplied by Stockturns.
The minimum SPI benchmark that is currently being used in a number rural merchandise businesses throughout Australia is 125. Anything below this measure is considered as unproductive use of the working capital investment you have in inventory.
Gross profit margin (20) x stockturns (6.25) = 125
Gross profit margin (22) x stockturns (5.68) = 125
Gross profit margin (18) x stockturns (6.94) = 125
In the first example a stockturn of 6.25 would equate to a maximum inventory holding of approximately eight weeks’ stock on hand. (52 weeks ÷ 6.25 = 8.32 weeks)
A rural merchandise business with an annual sales turnover of $9m is generating a 22% gross profit margin and carrying an average inventory of $1.8m.
Sales: $9,000,000 less COGS: $7,020,000 = Gross Profit: $1,980,000
Gross profit margin = gross profit ÷ sales = 22%
Stockturn = COGS ÷ average inventory = 3.9
Stock productivity index = 22 x 3.9 = 85.80
Stock on hand = 52 ÷ 3.9 = 13 weeks
In order for this business to generate a SPI of 125, the average inventory would need to reduce by $564,085 if the same levels of sales and gross profit margin was retained. Alternatively, gross profit margins would need to increase by 10% if the same level of sales and average inventory was retained.
It is far more realistic to drive an SPI increase by delivering a reduction in inventory values than by increasing margins. The best way to achieve this is to implement an inventory management plan which adopts a stringent purchasing practice that replenishes at the rate of no more than eight weeks stock-on-hand. Over 12 months this could free up as much as $564k of working capital.