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To print this newsletter, click here. by Linda Carter EMPLOYEE MOTIVATION AND INCENTIVES There are almost as many effective ways of motivating employees as there are ways of enticing customers into your store. Of course, there are also innumerable ways to "turn off" your associates and it is equally important to recognize these poor practices so they can be avoided. A disgruntled salesperson is unlikely to present a shining countenance to a prospective customer. Some store owners and/or managers prefer to drive rather than lead and this manifests itself in a tense and uneasy store atmosphere. Fear destroys confidence as well as pride in one's place of employment; its effect on productivity is negative and destructive in the long run. It is desirable for management to be highly enthusiastic, articulate and effervescent although each person comes across in a different way. Sincerity, fairness and candor are essential. True personal interest in your associates problems is valuable. One of the very best ways to motivate is to consciously try to help bring out the very best in your staff and to do everything in your power to develop leadership talent and knowledge. There is great satisfaction in being able to point to successful people and honestly claim that you contributed to that success. This kind of interest comes through to all your people and enhances the image of your store. ON-GOING TRAINING It is also very important to give your sales employees an opportunity to expand their knowledge and upgrade their skills by providing on-going training. This can be accomplished through regularly scheduled sales meetings and with the use of sales training materials. MOTIVATION Make your employees feel part of the store by asking their opinions on different issues, such as “what can we do to get new customers?”. They will start to feel they are an important part of the business and this will instill loyalty. To protect your investment in personnel it is important that employees be motivated to increase their output. Incentive compensation plans can be very effective motivators. To be effective, incentive compensation must be based on those aspects of the position over which the employee has control or influence. For example, store manager compensation can be dependent upon meeting sales, shrinkage and payroll goals. Ideally, salesperson incentive compensation should be directly related to their own sales. INCENTIVES Implement store contests and events that stimulate and motivate sales associates and make selling fun and rewarding. These add spice and excitement to routine. Contests can be planned with individual winners; team against team; or store against store in a multi-store company. Contests can run for one day, one week, or as long as a month and could be based on total sales, most items sold in a single transaction, highest transaction, etc. Money is generally the greatest motivator, but it should be used wisely. More isn't always better and how it is applied is very important. A $20 bill passed around all day to the salesperson who has the highest sales transaction may be more effective than offering a single $100 bonus for the person with the highest sales for the week. Salespeople could be given rewards for sales volume increases over last year, for selling older merchandise, getting customers to sign up for the store’s email list, calling customers, etc. SALES COMMISSION PLANS Methods of compensation in retail apparel stores can vary all the way from straight salary to straight commission with countless variations in between. The most commonly used are draw against commission or a base rate plus commission. It is incumbent upon retailers to use the method or combination best suited to their particular business. Although we prefer individually based plans, for some stores that does not work out the best as it requires a level of on-going management to make sure everyone is acting in the best interest of the store. In instances where management wants the sales staff to work together as a team without that type of competition, we have set up team-based incentives. Following are several examples of individual salesperson incentive compensation plans:
Generally, we are in favor of incentive compensation plans; however, this is a decision that must be made by each store. When used, incentive compensation plans should be adapted to each situation. To be considered successful, incentive compensation plans must result in an increase in sales and/or profits. We've helped dozens of retailers implement an incentive compensation plan for their sales staff. Several years ago we developed a compensation plan for every position in the store for an Arts & Crafts store in West Virginia. Everyone from the store manager to the janitor was able to take part in the incentive plan. If you would like help setting up a plan in your store, call me and let’s discuss your needs. DO YOU HAVE A WEB SITE? Many retailers, especially smaller ones, do not think it is important to have a web presence. They are wrong! Like it or not, the world is tuned into electronic communication. Many people do not even look at the phone book anymore. (My husband is one of them.) They go directly to the web to find the information and merchandise they need. This means that if you are spending a lot for a display ad in the yellow pages, you might be wasting your money. You may think you can not afford to have a web site. However, the statistics above show you can not afford to be without one. You do not have to spend thousands of dollars to have a web site. Years ago that may have been true but it is not true anymore. To help independent retailers we have decided to add web site development to our list of services for independent retailers. My assistant is also the webmaster for The Retail Management Advisors and will be working with retailers to help them get their web site up and running. To find out more about this service, click here. QUOTE OF THE MONTH 1) Constantly make sure your inventory and expenses are aligned properly. 2) You need to have great partners. There can be no more win-lose situations; it has to be win-win. Both vendors and retailers must make adjustments and compromise to ensure that relationships are healthy. 3) Thank every customer and let them know you appreciate their loyalty. Mario Bisio (as quoted in MR magazine e-newsletter-Jan. 2010)SPECIAL OPEN-TO-BUY SERVICE OFFER - EXTENDED THROUGH JULY With our monthly service starting at only $230 a month for up to 15 classifications, after a one-time set-up fee, there is no reason to wait. We have the experience (35 years)! We have the right price for independent retailers (no need to pay high fees)! Call 877-206-1299 or email today giving us the total number of classifications in your store(s) and we will provide a quotation. We can make this special offer because of our confidence in our Open-To-Buy Service and it's ability to help you reduce inventory, improve your cash flow and increase your Gross Profit (and Profit). Contact us today! This offer expires July 31, 2010. * Sign up for our Open-To-Buy Service by July 31, with the Open-To-Buy starting either August or September, and if after 6 months you are not satisfied that you are benefiting from it, you can cancel and we will refund 100% of all monthly service fees paid.KEEP YOUR EMPLOYEES HONEST PEER GROUPS RETAIL JOB DESCRIPTIONS BUDGET PREPARATION AND CASH FLOW PROJECTION SERVICE
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