Self-Storage Retail: Become a Merchandise-Selling, Cash-Extracting Expert
|Copyright 2014 by Virgo Publishing.|
|By: Kenny Pratt|
|Posted on: 09/13/2009|
Once you have a hard-earned customer, you want to generate as much revenue from that relationship as possible. Here’s a simple and repeatable process you can use to turn yourself or your employees into merchandise-selling, cash-extracting experts.
After reading the case study below, you’ll know how to measure sales progress and set goals for improvement. You’ll be able to create a system that makes it easy to really engage customers. You’ll also be equipped to systematically help customers shop more, consider and understand merchandise, and buy more.
When my company wanted to see how its portfolio of storage properties was performing in the area of merchandise sales, we recognized that we needed a way to track our progress. We wanted a metric that would help us not only see the progress of individual stores, but to compare one store manager to another.
Gross sales volume was the obvious place to start. However, we found it wasn’t helpful to compare the gross sales of larger stores with smaller ones, or stores that rented trucks with stores that didn’t. Effectively evaluating the performance of onsite managers across stores requires a different metric. What worked was tracking the amount of merchandise sold per move-in. This helped us focus on the manager’s contribution by the level of traffic coming through the office.
To make comparisons among stores, we separated them into two peer groups: those with rental trucks and those without. What we discovered is stores without rental trucks were selling between $8 and $13 of merchandise per move-in. This was disappointing, because it meant that, on average, we were selling less than one disc lock per move-in. With this data in hand, we were determined to do better.
We began the improvement process by meeting with our store manager. Together we reviewed her historic merchandise sales and set a goal to do better. She was motivated to try harder because she knew her performance was tracked, and the clear metric provided a scoreboard that gave her instant feedback with every transaction. Her efforts were soon rewarded with a modest increase in overall and per-move-in sales. But despite the improvement, we hadn’t yet met our goal. There was still something missing.
In his book Why We Buy: The Science of Shopping, Paco Underhill, a consultant to major retailers around the world, outlines three simple insights on how to help people buy more merchandise. The first is there is a direct correlation between the amount of time people spend shopping and the amount of money they spend. Second, people only buy the merchandise they actually look at and consider. Third, people only buy things they think they understand. If they don’t “get it,” they don’t buy it.
Think for a moment about your own experience. When you shop, you tend to pick up things and look them over. If you’re shopping for clothes, for example, you feel the fabric and hold items up to yourself. You take them into the dressing room and try them on. The longer you linger, the more you consider. The more you consider, the more you buy.
Except you don’t consider or buy things you don’t understand. Take the Web service Twitter, for example. You’ve probably heard of it because it’s received a lot of press. However, if you’re one of the many who still don’t “get it,” you probably haven’t spent any time looking into it. If your brain doesn’t understand something that’s non-threatening, it considers the item irrelevant. The last thing you want is for your merchandise to be irrelevant to customers.
The questions we must answer are now clear: How do we get people to spend more time shopping so they will look and consider more merchandise? How do we make the merchandise easy to understand?
Here’s the process that worked for us: First, we created a coupon for one free box with the purchase of any other merchandise. The coupon is effective not because it motivates people to buy, but because it gives you the opportunity to sell.
Here’s how it works for us: Once the manager has finished moving in a new customer, she stands up and says, “Let me walk you over here for a moment,” heading to the merchandise-display area. Because the customer is in the manager’s world and sees her as the authority on things related to storage, he never hesitates to follow her wherever she leads him.
She then engages the customer, using the coupon as a means to segue the conversation from the storage transaction to a consultation about boxes and moving supplies. She hands him the coupon, saying, “I have a coupon for you for a free box,” and follows with an open-ended question such as, “How many more boxes are you going to need before you’re ready for your move?”
Now the manager becomes a helpful consultant. She knows a fair amount about what the customer is moving and storing from the conversation that surrounded the sale of the storage space, and she’s able to leverage that understanding to help him look and consider relevant products. She’s in the perfect position to direct his attention to the items he’s likely to need and buy.
For example, if the manager knows the customer will be storing a mattress, she directs his attention to the mattress covers, possibly handing him one to consider, and explains how and why they are beneficial.
Because the manager is actively involved, she’s able to demonstrate the features and benefits of the different products a customer might not understand. For example, clean newsprint is a product many self-storage locations carry, but not all customers understand its use. The manager can describe how the clean newsprint helps pack fragile items safely without marring them with ink. Further, she can actually show the customer the difference between using newspaper and clean newsprint.
The free-box coupon gives you a tool to engage customers easily and tactfully. With practice, it becomes easier to steer the storage transaction toward a conversation and demonstration about moving supplies.
By actively selling the merchandise, you’re able to increase the amount of time the customer spends shopping. You’re also able to direct the customer’s attention to relevant products that are then noticed and considered. Finally, you’re able to suggest and explain products with which customers may not be familiar. All of these efforts combined ensure more merchandise is sold.
If you follow this process, you’ll have a goal and a scoreboard to track progress. You and your team will be empowered to have much more influence on the buying and sales process. If your results are like ours, you’ll be selling two to three times more merchandise than before.