IT and consumer electronics majors in India are losing up to Rs 84 lakh per store annually due to poor sales effectiveness. According to a survey conducted across Asia Pacific by performance improvement solutions provider Grass Roots Group, a capability gap in establishing customer needs and closing the sale by frontline sales staff at the retail outlets are primarily responsible for this loss.
By Charoo Aggarwal
Saturday, January 16, 2010: The survey—‘Are you being sold?’—focused on 14 multinational brands in the IT and consumer electronics space. The research was conducted in reseller outlets of these brands across seven countries—India, China, Singapore, Thailand, South Korea, Indonesia and Australia—with the help of 1,400 shoppers. The performance of the sales staff was judged on the basis of the complete shopping experience, including a salesperson’s response time, product knowledge and attempts to close a sale.
India’s robust retail culture strongly played out when measured on the ability to greet the customer. Sales people scored a higher than average rating in terms of the proportion of customers being served immediately. Also, the product knowledge of Indian sales staff at 81 per cent was on par with the rest of the region. However, they were significantly less likely to recommend a brand. Talking about India’s performance, Stephen Hibberd, regional director, Asia, Grass Roots Group, explains, “Through this survey, we wanted to understand if leading hardware and software giants were being well represented by their channel partners and how effectively they were being sold. India’s excellent scores in categories like product knowledge indicate that although the sales people have the technical knowhow about a product, they are simply not feeling engaged enough with the brand to support it or make recommendations.”
Where India lagged behind?
India performed poorly in terms of making first impression, including the prominence of the assigned brands. Indian reseller outlets had the least number of displays of the assigned brand signage in the region. India scored 9 per cent lower than the regional average and 17 per cent lower than China. India also scored less when it came to the salesperson’s ability in meeting customer needs. Only 59 per cent of the sales people engaged by the channel partners could live upto the expectations of the customers when compared to South Korea, China and Indonesia. Moreover, Indian sales staff seemed to fail in finding and recommending a brand to the customers. This inability to provide a personal brand validation tends to create a doubt in the customers’ mind as to why the salesperson is recommending a product that he hasn’t experienced himself. Only 20 per cent of Indian sales people tried to up-sell. China at 40 per cent topped in this category.
In over half of the shops across India, where the survey was conducted, salesperson let our shopper walk out without attempting to close the sale. It is perhaps a precursor to greater pitfalls for the $4.7-billion worth of consumer electronics market in India to discover that half of the sales people don’t ask the basic sales question—“Would you like to buy?” We agree that asking for the sale could be considered by some as a difficult question. If we go by the traditional selling pattern of the Indian seller, being regarded too pushy is not the trademark of effective selling. A survey conducted in the US asked buyers the question, “Why didn’t you purchase goods?” as they were leaving a retail store. Most answered, “Because we were never asked.” ‘Are you being sold’ supports this finding. It was not a question of being pushy but it is clear that sales staff lost the opportunity to close the sale, with only 50 per cent of all shoppers asked if they would like to purchase the product.
And what do we learn…
The outcome of this study reaffirms that it is very important to motivate the channel partners and, in turn, the sales people involved for driving stronger brand advocacy. Brand loyalty is one of the foremost ingredients for the winning combination in the selling game. Brands rely heavily on third parties to sell their products. Typically the relationship sits firmly within the distribution channel. Yet, the sales staff have less specific interaction with the brand, and therefore, are least utilised to drive growth. This should be avoided at all cost for successful selling.
Factors such as first impression and the way the customers are greeted are crucial determiners which affect their buying decision. According to our shoppers, only half of the stores were able to impress them. Therefore, I would say that tremendous opportunity exists for companies to improve the brand experience for the customer from the moment of entry. How a customer is ‘greeted’ sets the foundation for the buyer-seller relationship.
Critical to the confidence level of the customer is the knowledge that the salesperson has understood his requirements and can correctly establish his needs. When the sales staff is successful in doing this, the relationship between customer and salesperson is build, thereby moving the customer into a ‘purchasing’ frame of mind. Fewer than 60 per cent of shoppers in India were asked about specifications and requirements of the product. This represents a missed opportunity for 40 per cent of sales people who could have offered an upgraded solution, based on an understanding of these specific needs.
I have noticed that people tend to buy from those who are consistent and committed to a customer’s needs. What we find out from the study is that in Asia-Pacific while sales people are rated well for listening, asking appropriate questions was not on par with the rest of the region. While 67 per cent of the customers were asked about intended use, merely 9 per cent were asked about satisfaction with previously owned brands. There is definite inconsistency in this category. This suggests that 20 per cent of all customers, who actively asked about a specific product, are now taking their business elsewhere where they can get the expertise and required information.
The last say…
After investing hundreds of millions of dollars on R&D, manufacturing, distributing and advertising a product, it is disheartening for any company to discover that their ideal customer faced a retail environment and sales experience that forced them to walk out of the store without buying their product. It is an issue of grave importance, particularly for those industries where the main source of sales is via channel partners. Hence, effective channel engagement initiatives should be on top of the ‘to-do’ list of the marketing teams of such organisations. The breadth of brand influence takes on a different dynamic as relationships and brand advocacy become diluted downstream. Yet, it is at the vanguard of the sales process that brands need to rely on the most.
Brands do not have direct interaction with the customer and, therefore, rely heavily on frontline sales staff to promote and push their products. Therefore, a poor service experience has far reaching repercussions for both the channel and the brand. The clear message from the data gathered is that a holistic approach needs to be taken to two inter-linked issues—the strength of the relationship between the brand and the channel, and the overall sales effectiveness of frontline sales staff to promote the brand. Although entwined, each issue deserves a different method to achieve desired success. This can be through alignment of brand promise and key channel initiatives which will see sales staff change from mere pushers of product to brand ambassadors. It will also support the channel to turn a store of sellers into a welcoming environment for buyers.
Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine
