Monday 23 September 2019

Alan O'Neill: 'Take time to train and build a bond with your sales people'

Picture posed
Picture posed
Flexigroup chief executive PJ Byrne at the company’s headquarters in Custom House Plaza. Photo: Tony Gavin

Alan O'Neill

The Champagne region is centred in Epernay, east of Paris near the historic city of Reims. Moet Chandon, one of the top champagne brands in the world has a cellar and beautiful chateau housed there. The recession was challenging for all premium brands and was somewhat kinder to lower-priced sparkling wines. As a way to motivate and inspire the teams, I was invited to speak at their international sales conference.

In preparation for the event, it became apparent that the distribution channels most impacted were clubs and off-licences. Supermarkets and duty-free sales were doing reasonably well due to investment in point-of-sale merchandising. But the channels that were dependent on people to sell the product, were more challenging. Some countries were more successful than others in these channels. The reason for their success was that they recognised that 'selling-in' was not enough. The real success came from those that helped the re-seller to 'sell-out' their brands off their shelves.

If you are a company that relies on re-sellers to sell your product, then maybe it's time to think differently. For the purpose of this feature, I'll focus on retailers as re-sellers. But even if your business is B2B, the messages will apply to you too.

The World of a Retailer

Picture the world of a retailer. They are very busy people. They often have scores of product ranges and thousands of individual items within those ranges. They might also be open seven days a week and up to 12 hours a day. They need to have enough sales people to cover an 84 hour week, with a mixture of full- and part-time people. Furthermore, the turnover of sales associates in retail is high, particularly in the main towns and cities. How can a retailer ensure that its salespeople remember the features and benefits of each product? And how does that reality impact on your products?

Many distributors and wholesalers I know, are already aware that it's not just about getting and delivering the order. Many of them also provide some merchandising support in the form of display stands, signage and maybe even advertising spend. But that assumes that every store is a self-service, where the customer picks up their choice and then goes to pay. That may well be true for supermarkets and so on. But in specialist stores like fashion, technology, jewellery, home, hair and beauty salons, there is more to do. The missing piece in the jigsaw is for you to train the front line salespeople.

A Sample Product Training Outline

I have on occasion attended training by suppliers and they regularly get it wrong. They spend all of their short precious time talking about the brand's heritage and inspiration. Instead, you should consider what information a salesperson needs to know to effectively sell your product instead of a competitor's.

For this example, let's assume a 30m training session:

1 Brief history of the company, the brand and its DNA. (5min)

2 Overview of Product Ranges for this season. (10min)

  • The inspiration or context this year's collection
  • Target customer for each range
  • Price architecture
  • Who are the main competitors for this brand
  • Unique Selling Proposition (USP) for the company's products - what makes you different
  • Press interest and marketing support
  • Best sellers and why

3 Selling Tips. (10min)

  • Presentation: what can be said about the visual appearance - benefits
  • Product: what are the main features and matching benefits
  • Pricing: how to justify the pricing
  • Pluses: what added value things can be said about the product
  • Related products: what other products are an ideal link sale to the main product
  • Typical objections and answers

4 Wrap-up, Questions and Answers and your contact details. (5m)

The Last Word

The added benefit of taking the time to train re-sellers is that you build a bond with the salespeople. They might also sell your product because they now know and like you. You will show that you care and have a mutual interest in their success, as well as your own.

If you're not happy with sell-through right now, then it's you that owns that problem. Flexigroup, featured in the case study below has prioritised this as a key enabler of success, with eight account managers on the road full-time across Ireland, training retailers.

(If you'd like a copy of product training slides template, write to me at alan.oneill@kara.ie)

 

Flexigroup has right formula for modern retail success

Finance

Business: Flexigroup

Set up: 2007

Founder: Andrew Abercrombie

Turnover: €50m

No of Employees: 50

Location: Dublin

byrne.jpg
Flexigroup chief executive PJ Byrne at the company’s headquarters in Custom House Plaza. Photo: Tony Gavin

Many distributors and wholesalers are already aware that it's not just about getting and delivering the order. The missing piece of the jigsaw can be to train the front-line salespeople. The added benefit of taking the time to train re-sellers is that you build a bond with the salespeople. They might also sell your product because they now know and like you.

A number of weeks ago, I wrote here about the basic fundamental model that retailers use to drive their sales: F x C x A = S. ‘Footfall’ (the number of customers entering the store) multiplied by ‘conversion’ (the percentage of those that actually buy rather than just browse) multiplied by ‘average transaction value’, equals sales. This formula gives a retailer the key pointers for where to focus their efforts. 

Good retailers are instinctively very skilled at all three levers. But as the industry changes and pressure mounts with new competition every day, I believe that quality support mechanisms that help retailers to succeed are worth investigating.

A new rental concept

In 1985, Aussie Andrew Abercrombie noticed that every business he went into, had a photocopier. He developed a new rental concept, that enabled businesses to rent rather than buy their machines. Over time, the business branched out into renting other office equipment across the spectrum. He met fellow Aussie Gerry Harvey (of Harvey Norman) and together they conceived a new idea. Trialling at first in two stores, Flexigroup enabled consumers to rent their new products over a specific time frame. It was an incredibly successful model that was loved by consumers and retailers alike.

From there the business took off and opened in Ireland in 2007. As we all know, the world collapsed around us about then and Flexigroup just kept their heads down servicing the Irish Harvey Norman business. In 2013 the business started to expand and today, headed up by CEO and Carlow man PJ Byrne QFA, it has volumes/sales of €50m. With a multinational and diverse support team of 50 employees, it enables retailers to drive more footfall, convert browsers to spenders, and helps to increase ATV.

The Business Model

Flexigroup conducted a wide-reaching survey of retailers and consumers, listening carefully to what their needs were. Consequently, the main product today is FlexiFi which is an instalment plan for consumers. As an alternative to credit cards or cash, it enables consumers to buy products such as electronics or furniture and pay back over a short time. This is with no interest charged to the consumer.

Obviously there are terms and conditions attached, and there are also different product categories for varying amounts advanced. The average value of a loan is €2,300 and the average term is two years. However, there are many cases of short-term loans that are paid back in four fortnightly instalments and plenty of cases where consumers finance purchases of just a few hundred euro.

Once a consumer is approved, the money goes directly to the retailer on handover of purchase.

Eleanor and Daragh had just moved into a new house and were expecting their first baby. Eleanor applied for FlexiFi and was approved for €8,000, making the transition to the new house much simpler. Through Flexigroup partner Harvey Norman, the couple were able to fit out their entire living room and purchased many of the necessities for their new baby in Mothercare, all within their budget. 

Retailers are the primary customers of Flexigroup and it is already supporting hundreds of retailers countrywide, including Woodie’s, Paul Sheeran Jewellers, Best Menswear and Therapie Clinic.

The service is funded by the retailer through a ‘management service fee’. As the product grows in reputation, it drives footfall to those stores that provide the service.

As the consumer browses and contemplates a purchase, a retailer might nudge them over the line by suggesting a FlexiFi payment option. And to increase ATV, a retailer might also use the FlexiFi proposition to up-sell to a higher spec.

“One retailer in particular has experienced an increase in sales of over 30pc which they attribute solely to having a good point of sale finance offering. Furthermore they also saw their average basket size grow threefold” said PJ.

The Future

As the company continues to invest in technology, a future service will allow the consumer to be pre-approved for finance and then purchase in a ‘partner store’. When they have made their selection, they will simply pay through their mobile phone. This won’t be restricted to the current ceiling of €30 for contactless payments. Flexigroup will control the security of the transaction and enable instant payment direct to the retailer.

There are other endless possibilities for new products. With the rise of AI (artificial intelligence) and the digitalisation of many finance products, the scope for growth and innovation is limitless.

FlexiGroup is determined to be at the forefront of this digital revolution.

Flexigroup has already won ‘Best Supplier of the Year’ with Retail Excellence Ireland. I can see how it will support more and more retailers with F x C x A = S.

Alan O’Neill, author of Premium is the New Black, is managing director of Kara Change Management, specialists in strategy, culture and people development. Go to www.kara.ie if you’d like help with your business. Business advice questions for Alan can be sent to sundaybusiness@independent.ie

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