SAN FRANCISCO — In our consulting practice, we field many questions, but the most common question has long been “How do I increase sales?”
When this question arises, we always encourage the person who is asking to modify it to “How do I increase profitable sales?”
How many of you have tried Groupon, delighted initially at the large number of respondents, but then evaluated the retention rate on those deeply discounted sales and vowed never to use it again? These promotional efforts can be used as a marketing introduction for a new service or new location, but resulting sustained sales are rare. They have the added disadvantage of training your customers to think that your service is not worth your normal price.
So what is the answer?
First, there is no silver bullet. Profitable sales require a multi-pronged, sustained effort. There is no passive path to increased profitable sales.
It is time to acknowledge that 1) dry cleaning has a narrow target market and 2) there is a great deal of competition for the attention, disposable income, and loyalty of this desirable target market. To compete successfully in this crowded field, you must differentiate yourself and model your company to be remarkable.
TRAIN TO SELL
The next step is to train everyone to sell, a daunting task because most associates resist sales.
But they are willing to provide information that is useful to customers, and can be prompted to do this in many ways. One is through the use of visual prompts, i.e. flat screens, counter mats, service displays, delivery displays, hang tags, “Did you know we do ____?” buttons, etc.
These and other items “prompt” the customers to ask about services they don’t currently utilize.
Help associates to cross-sell by providing them with a list of questions (updated periodically) to ask of each customer and make them aware of additional services from which they can benefit. This can work via hang tags for customers that you don’t see face-to-face.
Give your dedicated sales team professional sales training and management, with sales goals, call requirements, closing percentage targets and constructive feedback.
INVEST IN MARKETING
Recently, marketing attention has rightly focused on the Internet and social media. Since so much information is available about this marketing channel, I won’t dwell on e-marketing here.
While traditional media may be less effective than it once was in many cases, well-selected media buys are proving to be extremely successful and much less expensive than previously due to the reduced circulation of newspapers. A declining subscriber base can make a newspaper less valuable for mass marketing, but there is a high correlation between newspaper readership and dry cleaning usage, so well-placed messages (including press releases) can create a significant impact for you.
The cost of cable TV advertising has also dropped dramatically, and is now affordable for, again, selective placement during programming identified as desirable to your customer based on the profiling you conduct.
Whatever the media you choose, there must be a realistic budget to fund your sales and marketing efforts. Those of you who have experienced the challenge of the highly visible chain dry cleaners know their spending is far higher than you ever budgeted before. For those who have not yet faced the challenge, be prepared to face marketing expenditures of 5-7% of sales.
CONSIDER ACQUISITIONS THAT ARE COMPLEMENTARY AND IMPROVE EFFICIENCY
Perhaps the simplest way to increase profitable sales is to acquire a compatible competitor that is ready to move on. The economies of scale that can be achieved by combining operations may result from:
- Better utilizing your existing plant capacity
- Improving personnel efficiency
- Right-sizing your store store and route offerings
- Combining central management
- Back-office operations
The length of the economic downturn has increased the number of acquisition opportunities. As always, thorough analysis is required to ensure that the opportunity is valid for your organization and that the transaction is designed appropriately to optimize your benefit.
These are just a few primary approaches to the question of how to build profitable sales. If you implement any of these basic steps, you are headed for increased sales and profit.
Have a question or comment? E-mail our editor Dave Davis at [email protected].