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issue: February 2005 APPLIANCE Magazine

APPLIANCE Line
The Retail Influence


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By Lisa Bonnema, Editor, APPLIANCE Magazine

How well do your potential customers know your brand? Good question. How well do the people selling to your potential customers know your brand? An even better question.

Lisa Bonnema, Editor, APPLIANCE Magazine

Let’s start with a statistic: 85 percent of consumers walking into a retail establishment have made no decision on brand. Surprised? I am. In today’s world of educated consumers and the Internet, why are more than 8 out of 10 consumers still unsure about what they are going to purchase after making the trek out to their favorite appliance retailer?

Well, I may have an answer. The statistic comes from Booz Allen Hamilton, a U.S. technology consulting firm, but the answer comes from Ara Ohanian, CEO of brand consulting firm Vuepoint. In fact, a select few of you already know him, although most of you don’t. His message is loud and clear: effectively training your sales force is the key to success.

So, how effective are you? “You have companies out there spending U.S. $600 million or
$700 million dollars to get people to come to their point of purchase, but only 15 percent of those who come in are going to buy their brand automatically,” Mr. Ohanian says. “The other ones are not sure, which means that a human being at the point-of-sale—the sales individual—has the most influence on what brand the consumer will eventually buy.”

And I found that other studies are showing similar results. In a survey conducted by Penn Schoen & Berland Associates for Panasonic Consumer Electronics, 8 out of 10 consumers reported doing some research before going to a retail store, but rely on the sales staff to help them make the final purchasing decision.

So while a lot of you may be spending much of your resources on “knowing your consumer,” the real question is do you know the person conversing with your consumer, and even more important—do they know you?

According to Mr. Ohanian, probably not. “Many manufacturers are just printing training brochures and sometimes having specific events [sales] people travel to, but most don’t have well-thought-out, organized, technology-driven retail knowledge and training tools,” he notes. “And they don’t have mechanisms for tracking who knows what about their products and their brands. It hasn’t been done widely using smart, impactful technology.”

Mr. Ohanian does say there are a few “smart companies” out there that understand the right way to reach their retail sales partners. “Those companies realize that a new way of moving to market is to really make training part of your marketing mix,” he explains.

So how do you decide whether or not you’re doing it “right”? Mr. Ohanian says you first evaluate what level of reach you have within your retail channel—what percentage of the people touching your product at retail have been trained on your product? In most cases, he has found the answer is around 10 percent—a far cry from 100 percent.

The next item is frequency—how often do you train your retail sales force? According to Mr. Ohanian, it should be every time you launch a new product.

The third consideration is effectiveness—are boring training brochures the only way to educate your sales force about the features of your product?

The last item is what I found to be the most interesting—insight. Do you know how many individuals have actually seen your training materials? As Mr. Ohanian puts it, “Can you get a report and digest it in a snap?” Accountability, he says, is more important today than it ever was: “Every time you spend a dollar to reach a sales person or a distributor, that dollar needs to have some kind of impact proof,” he says. “The Holy Grail is having a way to link your retail communication and training to an actual business result.”

If you’re like me, you are now waiting for the action items. Mr. Ohanian suggests going high-tech. Invest in e-learning suites that make training more interactive. Purchase some administrative software that allows you to schedule and manage training events through the Web. There is also analytic software that can correlate different metrics—integrating the amount of training by retailer with sales numbers, customer satisfaction numbers, etc.

The next action is getting the retailer on board. Mr. Ohanian thinks “smart retailers” will realize the benefit—moving product off the shelf quicker—but that it might take some incentive programs to actually work. “The manufacturer does not have that direct impact on a secondary retail channel, so it has to think about how it can motivate them and create loyalty,” Mr. Ohanian says. He suggests a point-based system like airline miles to encourage training. A sales person takes X number of training units on certain products, and he or she gets points that can be bartered for something else.

Of course, establishing a close relationship with the retailer needs to be in place first and foremost. “Without that partnership, tactical support tools are not enough,” Mr. Ohanian says.

There is another side to product and brand education that cannot be forgotten: directly communicating with the consumer. With some “big box” retailers taking sales people completely out of the mix, that certainly can’t be left out of the retail equation. Home Depot has taken it even further by deciding to sell appliances online. Like it or not, there is a group of consumers (albeit small) that will go for this model. In fact, Mr. Ohanian says he knows some appliance companies that are turning away online sales to protect the traditional retail landscape.

Ready for another statistic? The American Management Association finds that 90 percent of brand and product marketing materials go unused. Talk about waste. Consumers want to be able to research, but they want to do it easily. Gathering a bunch of brochures together and trying to compare them is time consuming to say the least. Even we realized that, which was the impetus for our consumer magazine, Home Appliance, which is sold at bookstores and at the actual retail location, where decisions are made.

So let’s apply Mr. Ohanian’s four-point strategy here: At what level are you communicating directly to the consumer? How often? How effectively? And, of course, do you have proof that it’s working?

In the end, it’s all about seeing the bigger picture. Product development and engineering advancements are critical to company and brand differentiation, but if you’re not effectively communicating those features to the consumer—both on and off the retail floor—then all of that effort is futile.

Editor’s Note: Everyone at APPLIANCE magazine and Dana Chase Publications sends their deepest sympathies to those that were affected by the tsunami tragedy in South Asia. Our thoughts and prayers are with you.

 

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