Tuesday, July 27, 2021
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How are Retailers Wasting Away their Money?

A retailer I worked for lost during 2019 a total sum of 110,000 EUR just due to sales employee fluctuations. Yes, in this article you will read about money that retailers so lightly give up, yet it could easily remain in their pockets.

When I look at this situation from my perspective, as a Retail Consultant and Sales Trainer, sometimes it looks like a barrel with countless holes. Money is leaking everywhere, we are wasting it, and it is not like it is time to waste the money!

I suggest we look at those holes together and understand how, with a little good organization and some investment, retailers can patch them up quickly and easily. But there should be a will to do it!

Don’t change your sales employees frequently!

The fluctuation rate of retail salespeople is huge. I mean really huge! In Serbia, on average, we talk about figures of approximately 20% per year; in Europe, these figures go up to 66%. This is to be expected, as employees are now changing jobs quicker than ever, thanks to websites that post information about new job opportunities.

If you are in retail and have salespeople in the shops, with the help of a Churn Rate Cost calculator, you can calculate for yourself how much money you are losing, just as I calculated for my client at the beginning of this story.

This loss comes for several reasons:

  1. The cost of recruiting a new employee. Think about how much money is wasted on job ad posting, employee training, the hours spent by the manager for training;
  2. Loss of clients due to a job vacancy. For example, three salespeople cannot serve the same number of customers as four;
  3. When a new salesperson starts to work, the conversion ratio (KPI) cannot be immediately at the level of already experienced salespeople. The average conversion ratio for that shop therefore falls, which is immediately felt on sales results. For instance, if they have a 3% conversion ratio instead of 4% like they used to, their sales volume drops by 25%!


You might ask: what is the solution? Well, let me just give you a hint, salespeople in retail usually say they feel „left alone“, do not feel that they are part of a „family“, and most people leave their jobs because they lack the „human touch“.

So now is the time for you to think about how much „human touch“ you give to the most important people in your company, especially the ones, that bring you the money?

Invest in Employee Training

Research shows that more than 60% of salespeople say they lack product knowledge. We do not even need to mention how many customers are lost because the salespeople cannot answer simple customer questions about the products on offer.

Not to mention the bad practice that salespeople use called “I’m going to find out, just a moment!” whenever we ask them something that is written on the label, which they should already know!

This problem is often seen at:

  1. Retail chains that have a large number of SKUs;
  2. Retail chains with high fluctuations of salespeople.


Well, can you really say that in the 21st century, with all this technology, it is so hard to provide proper product training?

Motivate your salespeople

The vast majority of salespeople in retail say they do their jobs “mechanically”. No engagement, no team spirit, no company culture.

They feel that their job is just to bring the items customers ask for, serve them, and to be kind. While this was enough until a few years ago, today, at a time when customers are expecting a premium service, speed reaction, and added value from retailers, this apathy is becoming increasingly challenging.

We all know that we should exclude from the value chain every element that does not bring value. You can bet that indifferent salespeople do not bring one!

Make your „STARS“ shine

There is no knowledge sharing among salespeople. As a coach or consultant, I usually go to several stores first, without letting the salespeople know who I am or what I do. What I notice first is the inequality of their knowledge and skills.

There are “STARS” among them; salespeople with highly developed social intelligence that we usually say are born for sales. But unfortunately, there are few of them. The rest of the salespeople provide an average or below-average service, giving the impression of indifference, never even trying to impress the client. And so little effort is needed for a STAR to become a coach!

With technology, we can record this “STAR” in action and send the footage to the sales team. It is really a shame we do not meet this practice more often!

Set daily sales targets

Retailers do not communicate the targets in the right manner. “You have to sell X number of products by the end of the month” does not mean much to the salespeople. They do not know exactly how much to sell to each customer, they do not know how to translate that goal into practice.

For a long time, if we are talking about financial goals, I have been communicating to the salespeople all the KPI targets on a daily level. It is only when we explain to them, for example, that to reach today’s target each customer should buy a purchase worth X EUR and that there should be at least two items in each purchase. That is when we have made the goals tangible and understandable to them.

So, please do the math, calculate KPIs daily, and communicate them to the salespeople. And give them positive feedback about every KPI target they meet, of course daily!

Salespeople are an investment

Lastly and perhaps most importantly, retailers almost no longer train their salespeople. We have entered a vicious circle, because of the high salespeople fluctuation rate, training them does not provide expected ROI. They will leave in a while anyway, right? So they work, but without the proper skills, they do not achieve the goals and are not satisfied nor motivated. So they go to find another job… and the new cycle is ready to start… “Let’s just hire another one!”


I hope all of this made you realize how much money you leave on the table because of the situation with your salespeople. So this article had only one goal. To kindly ask you to stop taking your salespeople for granted.

Do not forget that you have put thousands and thousands of Euros in their hands (in the items they sell), they have to earn you the margin you and your family are living from! So, please, I suggest you start treating them adequately!

Biljana Ždralehttps://mercuri.rs/
Biljana Ždrale is the Co-Owner of Mercuri International Serbia, part of Mercuri International -the world's largest sales consulting company. She is also the Co-Founder of the startup Boostowski, an application for improving the operational efficiency of retail employees.
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