Saturday, June 7, 2014

Employee Success: Rules of Engagement

So how does one understand how the hobby works and how to address their customers needs?

The answer is simple, study and communication. Any time you want to learn a new subject your best courses of action are to read about it and then get involved in it. First familiarize your employees with the product, have them read online reviews and forums. Have them read the source material and magazines. After they have familiarized themselves with the product in question, usually one or two of them will be interested enough to try it out. Encourage them by giving them a small amount of free product to build, paint, and understand the tactile feel of the hobby. After they have finished building and painting their models they now have an idea about what their customer will be experiencing when the first get their product, while also teaching them important facts about each product itself. Once the employees have a grasp of the product, begin training them on basic customer communication.

In the service industry, which is what retail, arguably, is, the customer is always right. Unless they are horribly wrong. This is what I refer to as "Haves, Wants, and Needs." These are the three basic bits of information an employee should ascertain from the customer before the employee sells them any product. This is done through engaging and communicating with each customer who enters the store and browses the wargaming section.

BUT WAIT, you scream at the top of your lungs, THIS SOUNDS LIKE A GW TACTIC!

You would be correct. There is a reason their B&M stores used to function really well. They had staff who knew the product, could ascertain what the customer wanted, and sell the customer what they needed. The only issue arose when the management of the stores pushed their "red shirts" to turn profits instead of create loyalty. This is something 3rd party B&Ms have in their favor. They don't have a regional manager looking at the bottom line who has no interaction with the customers on a daily or even weekly basis.


Then bloody say so. You are walking into a retail store. You are then assumed to be there to purchase an item. The employees of the retail locations should assume you are there to purchase an item. They should approach you and initiate communication. If you wish to not be helped, tell them so nicely. Respect goes both ways. Don't be a cunt.

Anyway, now it's time for the employee to learn what the customer is at the store to accomplish. Are they there to browse or purchase an item. Now, it's seen as rude for an employee to be upfront and ask a customer if they want to purchase something, so instead both players must do a little dance. For the employee, that dance is all about open ended questions. If the customer says yes or no to a question you asked, you are not getting enough information from them.

The first thing the employee does is observe the customer. What is their body language? Are they picking up items and glancing at the pictures? Are they reading the back of the box? Are they looking at the rule book or starter sets? Have they picked up an army book and casually flip through it? Are they pulling boxes of the shelf and making neat little stacks with an army book in their hand referencing the model's stat profile and points cost?

All of these non-verbal communications are important to watch for, as they can tell the employee a lot about the interest level and knowledge of the customer. A customer giving models a cursory glance may not be familiar with the hobby, and should be approached by asking questions about familiarity and analogous experiences to wargaming, such as board games or video games. On the opposite spectrum, a customer delving into rule books and stacking model kits off the shelf will be ready to make purchases, and it's time for the employee to use their training, experience and knowledge to get a couple more bucks out of the sale by up selling the buyer.

After the employee has observed the customer for maybe one minute, it is time to engage. The initial contact should build rapport with the customer, sharing names and hand shakes (where appropriate). The follow up to initial contact is to comment on what the customer is doing, and then ask a question about their action with regards to the product at hand. "I saw you were checking out the warhammer section, what is your experience with tabletop gaming?" or "I see you have picked out some units from <insert army name here>, what style of list or point size are you shooting for?" These are what we call open ended questions, they serve as a way to open dialogue with a customer beyond the simple "Yes/No" response.

After the customer has established a baseline of knowledge and shared their intention it is time for the second phase, assessing their wants. A customer wants a lot of things such as knowledge gained and product in hand, but most importantly they want to feel happy with their purchase. A customer may think they want a Stompa, but as the employee established earlier, they don't have the hobbying skill or army to accommodate the behemoth of a kit (or maybe they do and you can sell them the Stompa and more, but that comes later).

These wants are also what drive impulse buys, they are where the lifeblood of the companies miniature sales come from. However, the employee isn't there to just let people purchase a bunch of things the customer wants, they are there to ensure the customer comes back and buys more product. A Stompa, for example, will earn the company $140 gross retail, less the cost of the kit (~$90) and employee costs, today; however, there is no guarantee the customer will ever go in again, especially once they find out their purchase is essentially worthless without the tools needed to field the miniature; while 1 rulebook, 1 codex, 15 paints, 2 bottles of glue, hobby and paint tools, 6 Ork Boyz boxes, 3 Trukks, a Mechboy with KFF, and 3 Warbiker boxes over 2-3 months easily quadruples the value of the customer to the store.

This is where the customers needs must be met. While they may want something ridiculous, the employee must ensure the customer purchases something they will NEED to grow in the hobby, and come back for more. This is where more product knowledge can be used, as well as appeal to the customers sense of value. While a Stompa may bring lots of cool features to the battlefield, it's value is only useful under certain occasions. The customer may not always play a game that allows you to field a Stompa, or they may not find an opponent who will play against their Stompa. So what, instead, can the customer use to learn how to hobby and play games? In this instance, Ork Boyz and a Trukk will be the customers best bet. This gives them both infantry they can learn to play the game with, and a vehicle to give them that sense of "Wow cool, a big kit that I built!" It satisfies their need, while still addressing a portion of their wants.

This juggling act is difficult to tackle for newly trained employees. They see a large margin kit, such as the aforementioned Stompa, and proverbial dollar signs pop around in their head. Most retail employees are not at the store for a career, they are there for a job. These employees don't necessarily look at the long term picture where the customer keeps coming back and spending money, because they aren't thinking about the long term at their job. Usually the employee who isn't motivated won't even move beyond just pushing the buttons on the cash register, all this extra work may be above their perceived pay-grade.

Games Workshop paid their employees $15.00 an hour with full benefits and a 50% retail discount. They offered a comprehensive 401k plan as well as an FSA and, after a year, stock options.

Holy cow! That is a lot of benefits to working for their company! Was that for managers?

Nope, that was your starting pay. It's amazing that GW stores worked like that for so long (about 6 years).

Obviously, small 3rd party retailers cannot afford to pay all their employees like this, so instead businesses need to present the employee with other benefits. If the employee has investment in how well the company does, they will respond better to added responsibilities and really try to perform well on the floor.

Back on topic, so your employee has engaged the customer, built rapport, assessed the customers wants, and addressed the customers need. Now it's time for the most difficult, and most valuable step of the retail transaction process: Up-selling.

Up-selling can be done in many ways. We all have seen the candy, magazines, and sodas at the check out line of grocery stores. This is a form of up-selling. A waiter describing the daily special or bringing the dessert menu to the table before the check? That's up-selling! Any time an employee offers the customer a way to spend more money or purchase more product than they initially intended, the employee is participating in up-selling.

The first step to up-selling is to offer additional purchases to customers. This can be done by showing the customer the value they receive, whether monetary or perceived, informing the customers about why they should purchase the additional items. This can also be done by substituting purchases. If a customer wish to purchase one item for $50, the employee, knowing what the customer needs, can offer an alternative of two or three kits that may cost $65 instead, but contain more models. The second step to up-selling is to place multiple, high-margin items near the register. This could be paints, glue, card sleeves, small blisters, etc. It's something to grab the customers attention and have them purchase an additional item or two with their checkout. The third step is for the employee to ask the customer if they need anything else. "Do you have enough supplies to build and paint these new models?" This is a phrase echoed in every GW store across the country, and it is something that SHOULD BE EMULATED. Most customers are so excited about their purchase that they some times forget the tools and supplies they will need to build and paint their purchases. This is a great way to boost the transaction price higher.

Now that both the inventory aspect of the business and the employee training and goals have been addressed we can focus on the final segment of this piece, store layout and presentation, coming soon.

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