HOW DOES CUTTING LABOR COSTS AFFECT YOUR MARKETING?

HOW DOES CUTTING LABOR COSTS AFFECT YOUR MARKETING?

My cousin is getting married in a couple of weeks so obviously, my wife needed a new dress.

We walk in and out of shops lining the mall on our way to the big anchor store my wife knows she would have her new dress. Macy’s has been around a long time.

Glancing about numerous displays and headless statues I wondered why there were no sales people. The only employees I could find were standing in islands with lines of 4 or 5 people waiting to approach the shore, give them their money and scurry away with over sized bags in tow.

I found it interesting to watch dozens of people come through the store, finger through a couple of items, look around, and leave. These are people who want to buy something.

According to Patrick M. Dunne and Robert F. Lusch in their book Retailing, 71 percent of shoppers have no contact with sales personnel resulting in them leaving the store having made no purchase. Seventy one percent! Retailers spend millions of dollars on location, advertising and image, but they don’t staff the store. They over stuff the store full of merchandise and assume everyone will find what they need. Yet I can rarely find the men’s department let alone my waist size.

Department managers are responsible to cut cost, not impact sales. That’s the marketing department’s job and it is performed at the corporate level. But not all department stores are like this.

Far more successful then Macy’s in recent years is Nordstrom’s. Here the stores are more sparsely stocked. They have fewer items. They are staffed not with register clerks but with sales people who are eager to help you find what you’re looking for. The most amazing thing is that their advertising budget is nothing compared to that of Macy’s. The only advertising I recall receiving from Nordstrom’s is a hand written card notifying me of their semi-annual suit sale. It’s signed by a guy who sold me one suit 3 years ago.

You don’t have to be a genius to see that an increase in sales staff and sales training would better serve clients and profits. Train up a successful sales team and you won’t have to advertise.

If you’re asking how a lesson on retailers affects your contracting business I’ll have to say you first need to understand that you are a retailer. Clients don’t come into your business, they use the phone instead. Your call takers are sales people. I just said a profound statement, so to make sure you don’t miss it, I’ll phrase is again. Call taking is a sales position. So why are you over-burdening them with other duties?

The most common mistake I see in contracting businesses is the mindset of having a bookkeeper answer phones. This is like the store that only staffs the cash register island and does not staff the sales floor to cut costs. An alternative to cutting cost is to increase sales. Train your call takers and dispatchers how to increase sales. I don’t have enough time right now to go into how a call taker makes you money, but I can leave you with something that will hopefully cause a paradigm shift in your thinking.

If you have the person that does some accounting/clerking position answer your phones, every time the phone rings, it will be an interruption to what they are doing. Interruptions are never welcome.

The personality you hire to be good at your books is usually not the best personality for the phones. The expressive personality that can turn a wrong number into a sales call will not be the best bookkeeper. They are polar opposites in how they prefer to deal with people. But both can be trained to strengthen their weaknesses.

The big message in this rant is this. If you are going to spend money to make the phone ring, don’t cut on labor by having untrained unfocused people answer the phones. This will only increase your marketing costs.

The unmentioned benefit to more staff is better service. Be careful not to lose sight of your goal of more profits. You must keep within your key performance indicators. If your people don’t add to sales, find people who can.

Be a Nordstrom’s, not a Macys.

Leave a Reply

Your email address will not be published. Required fields are marked *