By Bill Scott, founder of StoreReport LLC & Scott Systems Inc.
In 1965, I made my living as a DJ pulling the morning shift at a local radio station, and selling radio commercials in the afternoon. I remember one sales call in particular.
I sat across the desk from a Southland Corporation (Pak-A-Sak) executive in his office on Fairfield Avenue in Shreveport, La., as he expounded on the virtues of the penny.
His claim: if I could teach my employees to do one simple thing, I could double the profits in my stores.
His idea: as customers approached the cash register, I try to train my employees to inquire as to whether the customer needs anything else.
I will never forget that meeting or the impression it left on me. This became significant later in life, when I discovered most convenience store tenders contain less than two items. A testament to the fact that 50 years later, we have made little or no progress in this area.
Retailers, especially convenience stores, are concerned with moving customers through their stores, much more than they are at controlling their customers’ purchases. With the amount of profits being lost, this is a problem desperate for a solution.
Later, I took a job for the Yellow Pages and sold telephone directory advertising in New Orleans. One of my customers was a man who made his fortune selling prescription drugs and drug store items out of a warehouse. He had no retail stores whatsoever. His customers simply called in their prescriptions and secretaries took the orders over the telephone. Then his team of motorcycle riders would deliver the orders.
He told me something that fell in line with what the Southland Corporation executive had said. When his salespeople would take the customers’ orders, they asked them to lay down their phone, and check their medicine cabinets to see if they needed anything else. Nine times out of 10 they did. Whether they needed anything else or not, the order-taker would not end the call without suggesting something that was currently on sale… perhaps a box of Kleenex tissue, or a two-for-one promotion… anything.
This caused the customer to stop, think and usually one sale would escalate into two, three or more sales in addition to what the customer originally wanted. Rarely, did the customer get off the phone without buying at least one additional item. His thinking: he would incur the cost of the delivery regardless of whether his delivery boy delivered one item or two. Why not offset the expense with a little profit from something the customer didn’t know they needed?
With the emphasis being “move the customer through the sales line as quickly as possible,” retail stores today are not set-up to make that extra sale, even if they asked for it. Instead of asking for another sale, we have come to rely on ‘change-makers’ and apparently they are not having the desired results or we would see more than one item on a tender, and it’s just not there.
The opportunity to double profits is compelling. All we need is the desire to make it happen. Sometimes stores are too busy, and the products may be scattered throughout the store. That doesn’t mean we can’t experiment during slow periods, or accumulate sales products near the register.
We would love to hear from retailers who have taken some action to pick up these profits that go unnoticed by most.
