Ancillary-Product Sales

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Adding new retail products for sale in your store seems like a no-brainer, but making these sales successful can take more than luck. The success or failure of your ancillary program is the responsibility of the entire self-storage team.You have probably heard the saying (and it's one of my favorites), "Success comes in cans. Failure comes in can'ts." And this is never more true than in ancillary-product sales.

While the primary element of ancillary-product profitability is attitude, it does require a bit more. Consider this: I remember introducing climate-controlled space at a store run by a lovely management couple. They were as honest as the day is long, but they had never used or been exposed to climate-controlled space. They told me, "it will never rent." Truer words were never spoken. They said they could not rent it, and they were right--they couldn't. I replaced that management team with another manager who also had never heard of climate-control. She had no opinion about it whatsoever; but she studied, asked questions, visited competitors, then filled up 18,000 square feet in record time. She had no self-fulfilling prophecy about success or failure. While attitude alone will not sell the product, it is a crucial element to success. It takes planning, budgeting, training and evaluation for a new offering to become a success.

Failure to Plan Is a Plan for Failure

Wal-Mart recently pulled a new product off its shelves: a crib toy that emits soothing sounds to assist a child in falling asleep. Customers listened to the toy and the message "I hate you" was heard in the background. Wal-Mart purchasing agents verified they had listened to the toy during product demos at the time of purchase, but had heard no such thing. When the shipments of 125,000 units were delivered to stores, they were indeed different from the ordered item, but no one had checked the shipment before selling toys to consumers.

While nothing quite so dramatic is likely to happen in our self-storage universe, it reminds us things can go wrong. You should use the goods you sell. If you sell tape, use the product. You will find there are different grades of tape quality. I recently moved and purchased tape from a local self-storage store. I had also ordered tape from Office Depot. The self-storage tape was the worst. It gummed up the tape gun and did not adhere well. While the Office Depot tape was more expensive and less convenient to purchase, the quality spoke for itself. The next time I was in the self-storage store, I asked the manager if different grades of tape were available. He assured me they were, but he only carried "the cheapest." Enough said?

The Only Stupid Question Is the One Not Asked

I bet there are a few questions you may have about the addition of ancillary services or products to your facility. For this reason, the services of a consultant or vendor can be of immense help in executing an ancillary-product sales strategy. Some questions you should ask are:

Deciding What to Offer

  • What products should I carry?
  • Where should I purchase the inventory?
  • How much should I stock?
  • What grade (quality) should I carry?
  • Should I carry more than one grade?
  • Is private labeling appropriate?
  • What are the liabilities associated with private labels?
  • Should I buy from more than one supplier?
  • How do I handle defective merchandise?

Displays and Promotions

  • What will I need to properly merchandise the products?
  • How much floor space will I need?
  • What kind of display hardware works best?
  • Who is my market?
  • Do I feature the product on my website? Do I post prices?
  • Do I include the products in my Yellow Pages ad?
  • Do I advertise in other mediums?
  • Do I include the products on my sign?
  • Is there a commercial-sales application? How do I reach those customers?

Pricing

  • How do I price the merchandise? What is a fair mark-up?
  • Where else can my customers buy this product, and what will it cost there?
  • What quantities will get price breaks?
  • When else do I give discounts?
  • What is a "loss leader"?
  • Do I take credit cards?
  • How do I handle returns?

Sales Training

  • Has my staff used these products?
  • What is their attitude about selling?
  • How do I teach my staff to suggestive sell? * What kind of training do they need?
  • How do I measure my team's sales success?
  • How and what incentives are necessary?

Business Matters and Profits

  • What is a reasonable return on investment?
  • How do I evaluate the success of the plan?
  • How will my software treat the sales?
  • Do I have the proper licensing to sell these products?
  • How much sales tax do I collect?
  • Can the products be drop-shipped?
  • Is there an e-commerce strategy for selling the products?

The Only Good Idea Is One That Works

And how do you know an idea worked? Even a broken clock is right twice a day. I remember a seminar presented by industry expert Anne Ballard. She was discussing the success of retail sales in her stores. Armed with facts and figures (she has more charts than Ross Perot), she proceeded to tell us how she measured her sales success.

I always knew retailers measured sales on a per-square-foot basis, but Anne took it to a higher level of sophistication. She tracked the sales per staff member and per store. She evaluated sales per new customer (lease). She measured sales against total units. She knew who on her team knew how to sell and who did not. She measured sales growth weekly and monthly. I think she even know what time of the day the most merchandise was sold. More important, she took the sales data and turned it into meaningful management data. She knew which products sold better than others. She knew if and when it worked. She had facts and figures, not assumptions and guesses.

There Is More Than One Way to Skin a Cat

Let's talk about a regional storage company with seven stores. We'll call it ABC Storage for the sake of anonymity. ABC decided it was going to sell merchandise at its facilities. After talking to a couple of self-storage suppliers, it decided to contact an outside provider and was able to negotiate a 4 percent savings on the merchandise. The out-of-industry salesman also suggested the company carry a few other solid-selling items that were popular in other industries.

While in an ABC store the other day, I noticed there was no more of the "odd" merchandise around and only industry-recognized brands for sale. The nonindustry merchandise suggested by the salesperson did not sell, and ABC eventually had to lower the prices so far below cost it was losing about 20 percent on each sale. I think the company learned its lesson, and it was an expensive one. The moral of the story is, "Go with what you know."

Plan Your Work and Work Your Plan

When developing your ancillary-product sales strategy, start with a budget, sales goals and a time frame. Think carefully about what will sell. I remember what I will call the "flower fiasco." One manager thought it would be a good idea to sell flowers in his store. And he sold flowers--but not many. While the mark-up was great, the thing about flowers is they die. And they die quickly. There is no market for nearly dead flowers or even those a that are a little ill. Not to mention the display cases are large and require lots of electricity to cool the dying flowers.

Even some likely sales ideas do not work particularly well. When one store was pitched on the idea of car rentals, it seemed feasible. The store already rented trucks; if you can rent trucks, surely you can rent cars, right? Wrong. There was no logical reason anyone would look to a self-storage facility to rent a car, and they didn't. In fact, it did not even bring in good traffic for the self-storage side of the business, because the traffic was all headed somewhere else!

Finally, set realistic time frames for sales training and product familiarity for your staff. Make sure they have solutions for all manner of on-site challenges. I recently had a problem with a disk lock that had rusted shut internally from lack of use. I drilled and drilled with no success. Finally, I had to grind off the lock, and it cost me a grinder and two wheels. The self-storage facility where I stored had no solution for me--no bolt cutters, no lock picks. I respected the manager's reasoning for not having lock-cutting tools on site, but I sure did not like it. Train your staff to offer--and sell--ancillary products and services to meet a wide range of customer wants and needs.

RK Kliebenstein is president of Coast-To-Coast Storage, a consultancy firm available to guide self-storage owners through the process of setting up an ancillary-sales program. He can be reached 877.622.5508, ext. 81; e-mail rk@askrk.com.

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