Sales Laundry

Archive for the ‘Sales Stories’ Category

Yesterday I wrote about looking at what you sell with new eyes and finding ways to simplify the buying process for your customer.  To spur your creativity I am going to tell you what another company is doing to simplify a process they invented.

For years, I have written off Domino’s pizza as “college pizza” or the pizza you order when you are too broke to order anything else.  After looking online for pizza delivery one night, I decided to give Domino’s a shot for nostalgia purposes alone.

 What I found on their site was an evolution of Domino’s original pizza delivery model, making plain old pizza delivery arguably more personal, more consistent and flat out easier on the buyer.  I got my pizza and another great example of making buying easy all in 30 minutes or less and I am happy to say their idea was more innovative than finding a new place to stuff cheese.

Domino’s pioneered pizza delivery and in the process brought about the age old process of keeping a stack of expired pizza coupons in the drawer by the telephone, scouring the coupon sections of telephone books, calling in and asking about the specials, placing your order and getting the standard 40 minutes to an hour estimated delivery time.  Domino’s changed all that by integrating online ordering like their competitors, but unlike their competitors, they developed the “Pizza Tracker” (see image.)  

Click Thumbnail for Full Size Image

 I was able to build my pizza with a simple graphic interface; my coupon was automatically deducted from my purchase price, I confirmed my order and paid in less than two minutes.  It was an easy process that started delivering unexpected value for me as soon as the “Pizza Tracker” loaded up.

 The “Pizza Tracker” tells me that Li is doing the prep work on my pizza and shows my pizza moving from the Prep phase through the Bake phase and Box phase.  At 5:21 Li hands my pizza off to Scott who departs the store at 5:23 and arriving at my house at 5:33 with a ring of the doorbell.  

•  No more calling. 
• No more errors relaying the order. 
• No more coupons to track.
• No more wondering where your pizza is.
• No more calling back an hour later realizing they forgot your order or made it carry out by mistake.
• As a bonus, you get the names of the people that are working to make and deliver your pizza.

 The pizza met my expectations, it was the easiest order I have ever placed, and I got unexpected value out of the “Pizza Tracker” feature that was just part of the transaction.  Getting to see my order processed in real time by real people made me feel more confident that my order was going to be correct, and get to me on time.   More importantly, I will likely be back to order again.

Not resting on their success, Domino’s has found yet another way to simplify the pizza purchase process.  Forget the computer, that is so 400 words ago, now all I need is a remote and my TiVo.

 If Domino’s can improve the art of pizza delivery, how can you improve the process of buying your product for your customer?  Can you make a change that brings a measurable competitive advantage and wins additional loyalty from your customer base?

 *Domino’s Pizza is the world’s largest pizza delivery company with 19% of the domestic pizza delivery market, inventing the pizza delivery category.  Pizza Hut, largest company by sales, holds 17% of the domestic pizza delivery market, Papa John’s nails down third with a comfortable 10%.  Source: Domino’s Investor Presentation – April 2008

I found myself in Walmart today finishing up some pre-Easter shopping and as I was waiting behind a lady with 27 items in the 20 item checkout lane I started thinking.

 Walmart is still making money and growing when the majority of their competitors’ sales are down by double digit percentages.

 What immediately comes to mind is the fact that they are the perceived “low price leader.”  That can’t be right though, because I have long accepted as fact that a strategy of being the “low price leader” is not a strategy that can sustain a business in the long run because low price strategies only hold up until the next guy shows up with a lower price.

 She still has 15 items in her basket.  How did she cram so much stuff in that little carry around basket?  No barcode on the Easter apple cover looking thing… 

 Walmart uses a host of strategies to be sure, but there are at least two that came to mind that are worth copying, and neither involve cutting your prices and praying for volume sales.

 1.  Walmart puts a relentless focus on finding any efficiency they can to get a product from the manufacturer to their distribution centers and ultimately their stores.  (They forced the issue with Electronic Data Interchange, or EDI, now an industry standard, and have recently nudged cereal companies to make smaller boxes that hold the same volume to reduce shelf space and paper waste among other things.)  As a result, it costs Walmart less to get a product on their shelves than it does their competitors, so an item for sale for $9.95 at Walmart and X Brand stores will likely have a lower true cost at Walmart.

Where competitors cut their price and profit to get in line with Walmart prices, Walmart cuts their cost, sells it for less and still makes more money doing it.

 
2.  When Walmart began, Sam Walton had a radical idea of putting stores in towns that were deemed too small for other major retailers, effectively going where the national competition was not willing to go.  This strategy continues to pay off even today as major retailers fight it out in every major metropolitan market, including Walmart, but Walmart has hundreds of stores in markets where there is no real competition and where future major competition is unlikely. 

 She has 7 items left in the basket, looks like egg dye, bubbles…

 Where can your costs be cut or efficiencies found between the idea stage and final sales/delivery? 

 Can you buy from your manufacturer/distributor differently to garner some savings?  Can you consolidate to a single distributor or is it time to see how hungry your distributor’s competitors are?  Maybe join a larger buying group?  Partner up to buy bigger shipments to get to the next break in tier pricing?

How many hands have to touch the products you sell or the orders for those products?  Is there an opportunity to negotiate, automate or eliminate some duplication?

 Look at your Cost of Sales.  Without damaging customer service, what is the most efficient, least time consuming way to sell each of your products?  Now, how are you selling each of your products?  Any appreciable room for improvement?  What admin tasks could you off load from your sales team to get them more customer face time?  Click here if you would like to go a little bit deeper discussing Cost of Sales.

 2 items left.  Why do they always put the slow Checkers on the Express lane?

 How can you follow Walmart’s example of having a presence where there is no real competition? 

 Is there a niche where you can plant your flag, dominate, and protect your margins?  Can you create that niche by building a rabid referral customer base like Joe Girard did?

 She is helping the Checker sack her goodies.  Finally.  At least she is helping sack the items.  There should be a faster way to check out when you only have a handful of things.

*beep*  *beep* *beep* Scanned, paid and done.

 “Sir, next time you could use one of the self check out stations if you are in a hurry.”  My Checker said.

 Guess that is a sales lesson I won’t be blogging about.  Too busy thinking.

 “Thank you for shopping at Walmart!”

Image courtesy of RichSellsHomes

I got some great responses on both the article and the survey at the end of the “How to get Referrals & get Them to Work for You” article, so I decided to share one more story that should motivate you to get moving.  This story is particularly interesting because this story takes place in economic conditions like we are seeing today.

 Salesman Joe Girard is our main character.  Many of you may have heard of him, but for those that have not, listen up.

 Joe never finished high school and bounced around from job to job until he ended up in Michigan begging a Sales Manager of a Chevrolet car dealership for a sales job.  Joe got the job and sold his first car that day and borrowed $10 from his Sales Manager to buy groceries on his way home.  The dealership owner fired him two months later after having sold an amazing 18 cars because the other salesmen complained he was being too aggressive.

 Based on his new found success, Joe found employment at Merollis Chevrolet and began a legendary career that would put him in the Guinness Book of World records and earn himself a spot in the Automotive Hall of Fame in 2001.   He is the only sales representative in the Hall of Fame.

 Joe Girard, according to the Guinness Book, sold more new cars and trucks on a one-to-one basis (that is retail, to people like you and me, not wholesale or fleet cars) than any other sales representative in the world, and then repeated that feat 12 consecutive times.

 Over 15 years he sold 13,001 cars or roughly 17 cars every week for 750+ weeks.  In his best year he sold 1,425 cars, or between 5 and 6 cars a day, depending on how many days he worked a given week.

Here is the best part.

 In 1974, during a major recession, unemployment at 9% (today it is hovering around 8%,) oil was in short supply, gas being rationed, not sold, (see picture) the consensus was you could not sell cars.  Joe only sold 1,376 that year, or roughly 27 cars a week!

 How did Joe sell so many cars?

 As you might have guessed, primarily by referrals.  Long before email and the personal computer Joe sent a handwritten card to every single person on his list, every month, just to let people know he was still out there selling cars and thinking about them.  No promotions, no advertisements, just hand written cards.

 Joe referral system was so successful he personally hired two assistants to help him pre-screen his customers, manage his appointment-only sales schedule, and assist him in writing 500+ cards every day.

 One simple idea, staying in touch with people and letting them know you care about them executed by mailing each person one card a month put a sales representative named Joe in the Guinness Book of World Records as the best car salesman of all time.

 Imagine what Joe could do with the technology we have today.  Better yet, imagine what you can do, and then do it.  What one simple step can you take to start building a referral generation system for your business?  It does not have to be impressive, worst case just send a card.

 Let me know what you come up with.

•  Want to see what the stock market in 1974 looked like compared to 2008, see the graphs here.
• Learn more about the best car salesman in the world, Joe Girard.
• Cartoon image courtesy of http://www.automation.com
• Gas coupon image courtesy of Wikimedia

On a nice evening out for dinner with my wife we were seated at a great table in an upscale Italian restaurant.  

 A manager stopped by our table and welcomed us to the restaurant and asked us if we would like to start off with a bottle of wine.  My wife was looking at the wine list and thought a bottle of her preferred wine was too expensive, so she ordered a glass.  

 The manager asked if I would like a glass, I had not thought about it, but said “Yes.”

“You might consider ordering a bottle, sir, if either of you would like a second glass the bottle would be a better value.”  The manager said.

 My wife smiled and very quickly nodded to the affirmative that ordering a bottle was a good idea.  I ordered it even though not three minutes before my wife had considered the bottle too expensive.

The price was a barrier until the value the bottle represented was elegantly explained.  With a value statement, the manager successfully bridged the gap between the perceived cost and actual cost of that bottle of wine, altering the perception and effectively closing the deal.

 The restaurant was beautiful.  The lights were dimmed a bit.  Fresh aromatic bread was on the table as was a special oil and garlic mixture for dipping.  We both ate the delicious bread, dipping it into the oil as we went over our respective menus.

 My wife decided before we had even arrived that she wanted some sort of lobster pasta dish.  Sure enough, she found what she wanted, but was put off by the price.  She decided to go with her second choice.  Seeing that we had put our menus away, our waitress stopped by asking if we were ready to order.

 I asked about a special couples promotion I had heard on the radio the restaurant was running but the waitress did not know what I was talking about.  The manager, however, just arriving with our bottle of wine overheard the conversation and verified the promotion and happened to toss in that the lobster pasta dish was part of the promotion, having no idea that was what my wife was really wanted.

 My wife, smiling ear to ear, ordered her pasta dish, I forget what I ordered.

 The restaurant was still beautiful and my wife was thrilled, which in turn made me happy.  She got a reasonable value on the wine she loved, she ordered her entre of choice, and the restaurant staff was on top of everything.

  Soon the bottle of wine was delivered and out waitress placed our empty crystal wine glasses on the table and set about opening the bottle.  She poured two glasses with a bottle roll at the end and confidently plopped the bottle on the table stating out entrées would be out in just a few moments.  A bite or two of the fantastic bread later, we picked up our wine glasses to toast the occasion.  The evening progressed with a good meal, great conversation, a nice desert, I paid and we left.  

The marketing dollars spent and the message delivered was a perfect compliment to the sales experience on the restaurant floor.  The marketing dollar found its target market in me, the message compelled me to action and the sales team at the restaurant was delivering on that implied promise, providing an experience for me and my wife I was willing to pay for.

Corporate direction, to raise average tickets by getting more couples in the restaurant, was perfectly in line with Marketing, having put together an attractive targeted promotion that got us in the restaurant, and Sales completed the trifecta by delivering quality service and tacking wine and desert on our final bill.  

This was a perfect case study in what can happen when Management, Marketing and Sales are all on the same page, out of their respective silos, and delivering a consistent message from the top down.

Look at your own company.  Does your stated corporate direction match what your Marketing department is doing?  Is the Sales department in line or are they marching to their own drum?  If not, then your company is probably paying too much for each sale.  From a numbers perspective it probably looks like there are too many sales people on the payroll for the amount of revenue being generated. 

The good news is it should be easy to find some sales improvement just by getting everyone on the same page and some additional improvement yet again,  from my experience, once you all get good at working together.