12
Selling Skills for Retail Sales Assistants

McArthur Sp. z.o.o.

Małgorzata Mitoraj-Jaroszek

This case was prepared to serve as a basis for discussion rather than an illustration of either effective or ineffective administrative and management practices. Names, dates, places, and data may have been disguised at the request of the author or organization.

Abstract

This case study is a description of an ROI project based on sales training targeted at retail sales assistants in a chain of shoe stores in Poland. A trend analysis was used as a method of isolating the effects of training. The sales training brought overall positive results.

BACKGROUND INFORMATION

McArthur Sp. z.o.o. is a medium-sized trading company, with a network of several shoe shops in large shopping centers in Poland. The senior management felt that the current level of sales was unsatisfactory. In addition to implementing a sales training program, the company conducted a series of mystery shopper surveys to assess the level of customer service and found the results to be very negative.

THE SOLUTION

It was acknowledged that there was an obvious sales training need for store managers, assistant store managers, and sales assistants. The sales training was conducted in nine stores and included the following topic areas: customer service standards, making contact with prospective customers, diagnosing customer needs, offering a solution (i.e., making a shoe presentation), presenting benefits, handling objectives, and closing the sale. In addition, to support and encourage the development of selling skills, managers and assistant store managers took part in tailor-made coaching training. In all, there were 45 participants in the training. Fortnightly, managers were asked to complete a competency assessment sheet for each of their staff members, and send it to the head office for verification by the sales and marketing director. After completing the observation sheet, the managers were asked to conduct coaching meetings with each of their staff members. The whole coaching process took three months.

THE MEASUREMENT CHALLENGE

The guidelines from the senior management were very clear, the aim was to raise the level of sales. To measure the effectiveness of the challenge, the ROI Methodology from the ROI Institute was applied. The process consisted of six areas of measurement: reaction and planned action, learning, application and implementation, business impact, ROI, and intangible measures.

The process includes a comprehensive plan for data collection and analysis, as shown in Figure 12-1. It contains steps leading up to the calculation of ROI, starting from evaluation planning and including types of information needed at each level of evaluation. To complete the process at Level 4, an analysis of intangible benefits is also carried out.

Planning for ROI

One of the important elements of the ROI evaluation is evaluation planning. Two key documents were used: the data collection plan and the ROI analysis plan.

Data Collection Plan

Figure 12-2 shows a completed data collection plan for this project, including all stages of the planning process and data collection. The objectives at Level 1 were identified as: participants indicate a positive response to the training program and complete an action plan at the end of training. The satisfaction level for this objective was a rating between 4.0 and 5.0 on a 5-point scale.

The objectives at Level 2 aimed to check the level of sales skills acquired during the training. At the end of the training, the trainer assessed all participants by a means of a pass or fail aptitude test focusing on the skills practiced. Over 80 percent of the participants passed the test.

At Level 3, two means of evaluation were implemented. The sales assistants were evaluated every two weeks by their managers or by the assistant store managers with a yes-or-no observation checklist for a period of three months. The satisfaction level was set at the implementation level of 80 percent of learned skills in the sales assistants’ daily work. In addition, information regarding the implementation of skills was also verified by a mystery shopper survey.

The business impact expected was sales growth, monitored throughout a period of three months after the training was completed. The results of the ROI calculation were expected to be 50 percent.

The data collection plan was a crucial part of the evaluation strategy. It allowed for a very clear outline in terms of the types of information needed, how the data should be collected, and when and by whom it should be collected.

ROI Analysis Plan

The ROI analysis plan was also important to the evaluation. As shown in Figure 12-3, the ROI analysis plan shows how to analyze data at Level 4 (business impact) and convert it to money so a credible ROI calculation can be achieved.

FIGURE 12-1. The ROI Methodology

FIGURE 12-2. Data Collection Plan

FIGURE 12-3. ROI Analysis Plan

RESULTS

Reaction and Learning

All of the participants (100 percent) who took part in the training completed the evaluation questionnaire. The results are shown in Table 12-1. During the training, participants were evaluated by the trainer using a yes/no test. Eighty percent of the participants received a positive evaluation.

TABLE 12-1. Reaction Questionnaire Results

Note: Participants rated the following on a scale of 1-5.

Application and Implementation

Every two weeks from the end of the training, participants were assessed by their superiors. The process took three months. Managers evaluated the use of sales standards in the sales assistants’ daily work. As a result, the study found that 70 percent of the participants used all of the acquired sales standards. Thirty percent did not use one of the acquired standards, closing the sale. Also, 80 percent of store managers effectively conducted on-the-job coaching.

An additional source of information was a mystery client survey. The results after this period were satisfactory. In six of the stores, there was visible improvement, and in three of the stores no changes were observed. (Note: During the evaluation process, staff changes occurred in three of the stores—store managers and sales assistants were dismissed, or resigned on their own.)

Barriers to Success

After completing the sales training program, a focus group was conducted concentrating on the barriers linked to the implementation and application of sales standards. The results of the focus group brought out that the greatest barriers were:

• lack of time to practice some of the skills when there is an increased number of customers in the store (especially true during the weekend rush hours)
• lack of support from immediate superiors, irregular and insufficient amount of constructive feedback.

Store management pointed out that this type of training should be organized more frequently, at the same time stressing that a crucial element of further trainings was to allow the participants to practice in non-standard situations in which they apply the acquired skills. Another crucial observation that was made was that the participants still faced problems with closing the sale. This was the first sales training carried out for McArthur sales assistants, therefore the level of motivation and commitment in this case was extremely high.

Business Impact

It was decided that the business analysis would only take into consideration the results from six of the shops, due to the fact that in three of the stores there was a high employee rotation during the project (this group was excluded from further analysis). Shoe sales were studied in six of the stores for a period of three months after completing the training.

Isolating the Effects of the Program

A key element of the ROI Methodology is isolating the effects of the program on the data. It was decided that in order to do this effectively, a sales trend analysis for a period of three months after the training would be used to compare the results with the same period from the previous year. Actual average unit sales taken starting the week the trainings commenced, during the three-month period was 4 928 pairs of shoes sold. Forecasted average unit sales taken starting the week the trainings commenced, during the three-month period was 3 610,25 pairs of shoes sold, as shown in Figure 12-4.

Average “real” – average “forecast” = 1 317,75

A group of experts most familiar with the situation indicated that no additional new influences entered during the post-evaluation period. They also indicated that the pre-program influences are still present in the post period.

In all of the stores surveyed, a positive difference was observed between the actual results and the forecasted results. Conducting the same analysis in all of the stores at the same time strengthened the credibility for the increased results.

FIGURE 12-4. Trend Analysis

Converting Data to a Monetary Value

To calculate the monetary value of the benefits, the following steps were taken, as shown in Table 12-2. The average price of shoes is 79 PLN, of which 40,29 PLN is the net profit (data supplied by the Sales and Marketing Director). The increase in sales within the three months of the evaluated period was 1 318 units, giving an increase of 439 units per month. Annually, this gives an increase of 5 268 units x the net sales profit of 40,29 PLN. Which gives an overall sum of 212 247,72 PLN.

TABLE 12-2. Steps for Converting Data to Monetary Value

Program Costs

Table 12-3 outlines all program costs. The costs take into account the cost of training for nine stores, although the benefits are calculated only on the results of six of the stores.

TABLE 12-3. Project Costs

ROI Calculation

The ROI and benefit-cost ratio (BCR) were calculated for the project as follows:

The benefit-cost ratio was very satisfying for the customer. ROI was calculated as follows:

The ROI interpretation is as follows: each zloty invested returned 2,5 zloty (PLN) in benefits. The training proved to be a good investment and worthy of continuing in the future in order to develop staff sales competence.

The whole process was consistent with the 12 Guiding Principles of the ROI Methodology:

1. When a higher level evaluation is conducted, data must be collected at lower levels.
2. When an evaluation is planned for a higher level, the previous level of evaluation does not have to be comprehensive.
3. When collecting and analyzing data, use only the most credible sources.
4. When analyzing data, select the most conservative alternative for calculations.
5. At least one method must be used to isolate the effects of the solution/project.
6. If no improvement data are available for a population or from a specific source, it is assumed that little or no improvement has occurred.
7. Estimates of improvements should be adjusted for the potential error of the estimate.
8. Extreme data items and unsupported claims should not be used in ROI calculations.
9. Only the first year of benefits (annual) should be used in the ROI analysis of short term solutions.
10. Costs of a solution, project, or program should be fully loaded for ROI analysis.
11. Intangible measures are defined as measures that are purposefully not converted to monetary value.
12. The results from the ROI Methodology must be communicated to all key stakeholders.

Intangibles

An intangible benefit that emerged during the training was an increase in customer satisfaction in six of the shops. A customer satisfaction survey was conducted and mystery shoppers evaluated salespeople for the same criteria. Table 12-4 shows the criteria being examined within the sales staff.

In addition, during the store management training sum up, it was discovered that one of the additional advantages of this training was a much higher level of commitment on the part of the sales assistants. The training also helped to improve communication between the head office and individual stores.

TABLE 12-4. Mystery Shopper Salesperson Evaluation

COMMUNICATION OF RESULTS

The project results were presented at a meeting with the sales and marketing director and the chairman of the board. The six steps of assessment, the data collection plan, the method of isolating the effects of training, and proposals for the future were presented during the meeting. The overall results of the project were also presented to the participants of the project.

LESSONS LEARNED

Conclusions which emerged during the discussion:

• The training time should be longer (one day is not enough to effectively practice sales competencies).
• The process of coaching should be continuous, not limited to specific projects.
• Before a decision is made about whether to implement training, the motivation level and commitment of participants should be examined (one needs to avoid situations in which the company invests in training employees who may be dismissed in the nearest future or may resign on their own).
• This first ROI project made me realize that this is an extremely practical methodology, which should be applied in companies on regular basis and function as part of their overall organizational process. The first step that is worth recommending, is choosing individual training programs in order to evaluate them at various levels. My goals are to propose the ROI Methodology to companies in Poland, conduct open training sessions on the ROI Methodology, and to consult and conduct research on the application of the ROI Methodology.

QUESTIONS FOR DISCUSSION

1. How credible is this case study? Explain.
2. What other methods could be used to isolate the effects of the program on the data?

ABOUT THE AUTHOR

Małgorzata Mitoraj-Jaroszek PhD, CRP, has more than 15 years’ experience in the training industry. She is the author of various training programs on topics such as training for managers, social skills training, and sales training. Over the years she has worked on multiple consulting projects including the implementation of a formal job evaluation, establishment and implementation of company standards, sales and customer service standards, implementation of the open door policy, setting recruitment processes, and preparing specialists and managers for the role of company trainers. She is also the author of several articles printed in national journals such as “Management and Staff.” Her PhD thesis is devoted to management development in organizations, and was presented to the Management Institute at the Jagiellonian University.