HBR on Retail:
An article in the Harvard Business Review (HBR — Jan/Feb 2019, pg 72) suggested that the brick and mortar retail industry is “squandering their most potent weapons” against their e-commerce competition. The author suggests that the hidden advantage is in the store is salespeople. I’m afraid I have to disagree.
The rest of the article is fine. I agree with the analytics as well as the goals for that analysis. However, the old model of using commissioned salespeople is a problem. On the rare occasion that I step foot into a physical store, I am looking to buy. I want customer service, not sales.
Salesperson vs. Customer Service Person
I’m not splitting hairs here. The details are important. The conventional wisdom is that if you wish to hire a salesperson, then it is expected that a significant portion of that person’s compensation will be sales commissions. That is, that person will be focused on making a sale. Helping a customer is secondary to the need to earn a commission.
Worse yet, vendors will want to have an advantage by running added commission programs (known as spiff programs) to encourage salespeople to sell their products. So salespeople on commission and who can also earn spiffs are not to be trusted as far as I am concerned. They want to maximize their earnings rather than take time to find out why I want a product and how I intend to use it.
What I want is a very knowledgeable customer service person, who is paid a full compensation package without sales commissions. That person needs to know about all the products, where they are located in the store and have the customer’s best interests at heart rather than a focus on making a particular sale.
Texas Is Wrong
A recent news article stated that the Texas legislature is considering a bill that would keep Tesla from servicing their cars in Texas. Despite the Texas “direct-sale law” that attempts to require that cars be bought through a dealership, Texans have enthusiastically purchased Teslas from neighboring states.
The franchise dealers are lobbying the legislature to make sure their old business model is protected. They will lose. As more people hear about and/or experience the no-salesperson car purchasing model, they will opt for it. There is a reason calling someone a “used-car-salesman” is considered an insult.
Back to Retail
E-commerce continues to become a larger percentage of total sales. Since this is the trend (see the graph above), and since on-line purchase generally doesn’t require interaction with a salesperson, it follows that the need for salespeople will decline and the need for excellent customer service people will grow.
Nothing is saying that a good salesperson can’t make the transition to a good customer service person. The great salespeople I have worked with are more customer service focused than sales focused. They realize that the long term relationship is more important than the immediate sale.
I do not enjoy haggling over price. It’s not because I don’t care about the price. I don’t want to have to negotiate everything. I’d rather walk away than have to haggle. Decades ago, we purchased a Saturn. The rule was, you will get the best price we can give you, so no negotiating. What a great experience that was.
However, some folks love haggling over the price of their purchases. So in my “no salesperson world,” they would be missing all the enjoyment they get negotiating the best deal. I much prefer to research the specifications versus price, on-line, without anyone having to go back to their manager for approval of some negotiated price reduction. Technology has disrupted how we buy products. The good news is, there should be no wholesale unemployment created. Instead, the rather straightforward transition from sales to customer service will be appreciated by almost everyone involved.