According to David Bruce in his book, “The Funniest People in Sports”, the comedian, stage, film and television star Groucho Marx once captained a charity baseball game between the Comedians and the Actors. He ordered Jack Benny to step up to the plate and hit a home run, but Mr. Benny promptly struck out. This caused Groucho to resign, complaining, “I can’t manage a team that won’t follow instructions.”
This funny anecdote too often rings true within a retail organization. Corporate and store management teams can set unrealistic and conflicting goals for store associates without even knowing it. Below are six key ways managers can get the most out of their associates.
Communicate The Vision
“Hit a home run” or “sell more stuff” isn’t a vision — it’s a task, and a very broad one at that. It doesn’t speak to purpose or the organization’s mission and goals. Establishing the vision helps provide a roadmap indicating where the organization is headed and how it’s going to get there (together).
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Since the vision doesn’t need to be the mission statement itself, it can focus on a more immediate need, such as preparing for a selling event. It should, however, still be part of the overall roadmap and consistent with the overall mission. And effectively communicating that vision provides a greater understanding of each associate’s role along that journey. It is not enough to just tell an associate to do something, whether it’s face-to-face or via memo, email or text message.
To ensure that the communication has been appropriately received, there should be a way to measure effectiveness through a feedback loop and through behavioral observation and reporting on performance.
It’s Not The What, It’s The Why And How
Telling your team to “sell more stuff” is an objective. It does not give them an understanding of why selling is important or how improved sales personally impacts them; let alone does it convey what behaviors they need to model and actions they need to take in order to do so.
Explaining the “why” helps to gain your associates’ cooperation because they will feel like they are a meaningful part of the organization rather than just taking on an isolated, reactive role. Giving associates the tools (behaviors and actions) to achieve the goal (the “how”) provides them with a clear understanding of what you expect and the confidence they may need for successful completion.
As far as the “what” goes, goals should pass a S.M.A.R.T. test by being specific, measurable, agreed upon, realistic and time-bound. “Sell more stuff” may be measurable, but it fails the other four tests.
The most challenging part of setting a S.M.A.R.T. goal is being realistic. A good example of how hard it is to set realistic goals is in targeting shopper conversion rates. Conversion is the number of transactions divided by the number of shoppers who enter a store. Conversion is a key indicator of how well a store turns shoppers into buyers.
A simple goal may be to increase conversion by a specific percentage. Whether or not that percentage is realistic depends on how it translates into increased transactions and how it impacts overall sales.
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Giving every store the same goal — say a 5% conversion increase — doesn’t take into consideration the unique differences between stores. For instance, one may be in a heavily shopped mall while another may be in a slower strip center. The traffic footprint, seasonality, socio-demographics and other attributes make a difference in what’s realistic versus what’s unreasonable.
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It may appear to be easy to get a 5% increase in conversion from 22% to 27%, but if your store sees 1,000 shoppers each week, that means going from 220 transactions to 270 transactions, or an average of more than seven additional transactions per day. How realistic that expectation is depends on the store’s current transaction track record.
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Realism should consider the impact on other performance measurements. For example, if you ask your team to ring seven more transactions per day, will they do so with no regard to basket size? It’s one thing to add seven more transactions of $1 apiece, but if your current average basket size is over $30, are you really improving your business? Or, if an associate breaks one transaction into two in order to double the transaction output, is he/she truly growing overall sales?
Incentives Should Inspire, Not Motivate
If your employees need motivation, then you have a bigger problem on your hands. The general desire to do the job should be established during the hiring process and monitored throughout each associate’s tenure. Performing the job at a baseline expectation results in the agreed upon standard compensation.
Incentives should help to take that performance to another level entirely. An effective incentive plan should reward an associate for going beyond normal expectations and include S.M.A.R.T. goals as a guide to achieving the reward.
Remember that inspiration doesn’t necessarily require significant investments. Small incentives, such as gift cards, personal recognition and a free meal can be meaningful rewards depending upon the requested level of achievement.
Follow The Scouting Badge Rule
Youth organizations give participants rewards (typically in the form of badges) when they achieve a goal. The more participants accomplish, the more badges they earn. But some retailers also do the opposite, by penalizing an associate for under-performance.
For example, they establish an overall bonus objective and then take bonus dollars away when certain thresholds aren’t met. This practice actually becomes a disincentive, as many associates become discouraged or lose interest if they fall behind, ultimately failing to meet even baseline objectives. Since retail accomplishments are typically focused on either adding to revenue generation or saving on costs (and thereby improving profit dollars), rewarding rather than penalizing incentivizes good behavior and more effectively improves results.
Don’t Expect Improvement Without Training
Establishing S.M.A.R.T. goals with properly communicated incentives can only go so far if an associate is unable to model key behaviors and take the actions necessary to achieve expectations. Training plays a critical role in performance. Many retailers assume that store leadership will take on the function of associate training. But what if the manager isn’t comfortable facilitating training or doesn’t have that skill set? Smart retailers also provide “train the trainer” programs or identify qualified trainers for each store or district.
Review Your Results
You can’t understand how significant your influence as a leader was unless you measure your success. After the event/task/mission has been completed, retail leaders should revisit the goals they established beforehand (e.g., Did everyone involved achieve their target? Was a manager able to monitor associate behaviors along the timeline to ensure that they achieved their goals in the right way?)
If everyone hit the target and did it the right way, then celebrate your success! If not, start to assess what went wrong by going back to your communication plan and answer the following questions:
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Was the vision clear?
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Did I ensure that everyone involved understood the communication?
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Were all areas of the S.M.A.R.T. test passed?
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Did I inspire everyone? If so, how? And if not, why?
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Which individual(s) didn’t achieve their goals?
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Did the underperformers have adequate training?
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Did the underperformers demonstrate appropriate behaviors and skills?
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Where were the gaps in behaviors and key performance indicators (what did you measure)?
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What corrections can I make to the plan and behaviors for the next time?
While this may seem like a lot of advanced work, the payoff is that you will have happier, inspired associates and an even better chance of hitting a home run every time your team is challenged!
Brian Field is the Senior Director of Advisory Services for ShopperTrak, where he oversees the application of ShopperTrak’s proprietary solutions to retailer-specific issues across different functional areas in order to drive top and bottom line store performance. Prior to joining ShopperTrak, Field served in roles of increasing responsibility at Chico’s FAS Inc., including as the director of corporate store operations and finance. Field has spent nearly four decades in the industry, and his experience includes: store sales and management, training, merchandising, strategic planning and analysis for brands as diverse as David’s Bridal, Circuit City and Macy’s.
