Making Better Decisions

Everyone struggles to make tough decisions. Is there a process that can make tough decision making easier? The answer is "yes" according to management consultant Rick Houcek, and he turns to Winston Churchill as his guide. Churchill is both one of the most loved and loathed characters of the 20th Century. Credited with protecting England from Hitler's onslaught in World War II, Churchill was forced to make thousands of life-and-death decisions. Churchill developed a process outlined in his book, Churchill on Leadership, that he deemed "5 distinct truths" to make decisions:

1. There is full authority to make the decision
2. There is a reasonable prospect for success based on the decision made
3. Greater interests are not compromised
4. All possible care and forethought are exercised in the preparation
5. All vigor and determination are shown in the execution

Houcek adds a sixth point:

• Adjust as you go as you gather valuable new information.

Every day in the showroom you and your team make decisions. Brainstorm with fellow team members to identify the criteria you should follow to make more effective decisions. Churchill provides a road map. Will it work for you? If not, what will?

The Difference Between Trust and Loyalty, by Tom Cohn (DPHA Executive Vice President)

There was a recall on one of my cars recently, so I took it to the dealer to be fixed. While it was in the shop, I asked for an oil change and a replacement wiper blade. I also asked the technician to check a whistling sound coming from an air vent. 

 

Several hours later, I received a call from the service technician who offered a laundry list of fixes and recommendations that totaled more than $3,000. The repairs that I had requested amounted to $112.50. Being mechanically challenged and not knowing the difference between a camshaft and a spark plug, I questioned the service manager about his recommendations. The car had just reached 60,000 miles, and the manager informed me that at 60,000 miles the dealership performs a number of preventive maintenance services such as changing the power steering fluid and a bunch of other stuff that sailed right over my head. Now I must admit that I take care of my cars, and I have two others. One is 19 years old and the other is 24 years old. Both run great. I have had no previous problems with preventive maintenance, but I do want my cars to last a long time. When I got the call, however, my antenna went up. "Danger, Danger" rang through my head, and for good reason. About six months earlier, I had to take the 19 year old car to the same dealer for an emissions check. A couple of hours after dropping it off, a call came in recommending $5,500 worth of repairs. I simply laughed. The car is not worth $5,500, so I respectfully declined the additional repair recommendations. That was more than a year ago, and the car continues to operate beautifully.

 

I asked a simple question, "Does the car really need all of this work?" The response I received was, "this is what we do at 60,000 miles." I again asked, "Does the car need to have the work done. I realize that this is what you want to do, but is it necessary?" The manager could not answer. He repeatedly stated that this is what they do. He could not answer why they do it or explain the necessity for doing it. I was left to believe that the only reason the work was recommended was to make money for the dealership. Bottom line: There was no trust. 

 

Trust is the hardest thing for any business to earn today. This lack of trust is helping to commoditize products and service. That's one of many reasons for Amazon's success. According to Charles H. Green, author of Trust-Based Selling, "We know that when we are buyers, we are afraid of being manipulated or taken advantage of, looking stupid or silly in the eyes of our peers or bosses or subordinates or of risks only simply perceived. In all cases, our inclination is to revert to features and price and away from the relationship - and away from the risks and opportunities of trust."

 

Consumer caution and skepticism fuels commoditization that has intensified because the Internet provides access to information never before available. Couple that with online discussion forums and review sites such as Yelp, Angie's List, Home Advisor and a host of others and consumers, regardless of what they purchase, do not willingly trust sellers. Trust is something that has to be earned. 

What are you doing to earn the trust of your customers? Do you know how trust is established? Green points out there is a difference between trust and loyalty. Customers may buy from you, but that does not necessarily mean they trust you. Trust involves making emotional connections. It requires really listening to customers, understanding both their wants and needs, and then delivering. Green believes that trust is established if a buyer believes that the seller actually cares. "Caring is indicated by things like paying attention to, showing interest in and exhibiting curiosity about the things that customers themselves care about. If you do, people tend to trust you, and buy from you when they need what you are selling," Green writes.

 

Did the service manager at the car dealership care about me or my car? There was nothing in our conversation that gave me that impression. What do you and your sales staff do to show that you care? 

 

Lessons We Can Learn From Sears

On Monday, October 15, Sears filed for Chapter 11 bankruptcy protection, announced the shuttering of more than 140 stores and fired its CEO.  None of these actions came as a surprise to anyone who has followed Sears recently.  There will be many who attribute Sears' woes to Amazon and other online etailers, but that's not the reason for Sears' current predicament, because Sears was Amazon before the Internet was even a pipe dream.

 

Sears is arguably one of the most innovative companies in retail history.  As the Retail Doctor, Bob Phibbs, points out in a recent blog, in the 1920s, Sears opened a new store on average every other business day.  When a journalist asked President Franklin D. RooseveIt if he could send only one book to the Soviet Union, what would it be, his response was "The Sears Catalog."  

 

Sears revolutionized retail, direct mail, merchandising, customer flow and store design due to a corporate culture of innovation flowing through every fiber of the company's DNA. Did you know that Sears introduced the Discover Card to help offer credit to catalog shoppers?  Did you realize that when Sears started Allstate it was the first time consumers had the ability to buy insurance through direct-mail?  Acquiring Dean Whitter and Coldwell Banker and combining those services along with Allstate gave Sears the ability to provide a wide range of services all under one roof.  

 

Sears had no equal when it came to training its sales professionals.  Starting in the 1940s, Sears taught their sales professionals to always promote first the best in category.  For example, if a customer wanted to purchase the least expensive Kenmore washing machine, Sears associates were taught to direct that customer to the most expensive Kenmore model and explain how much more functionality and benefits the top-of-the-line item offered.  If the customer did not bite, the sales professional would then move to the next model down and explain what benefits would not be available at this price point, and so on.  

 

Customers could order merchandise through the catalog and pick it up in store. Sound familiar?  In the 1980s, Sears used its own employees in ad campaigns to promote its new line of beauty products. That campaign was another first-to-market innovation.  

 

What happened? Sears stopped innovating in the 1980s. For many DPHA members and their parents and grandparents, Sears was a staple. They knew that they could go to Sears and get what they needed at a fair price from a knowledgeable and helpful sales professional. But Sears lost its focus - it forgot what made it successful, resulting in many of its customers gravitating to Target, Walmart and Amazon.  

 

Here are some of the lessons that the Sears predicament teaches.

• Don't ever forget who your customers are and what they need.  Sears offered to a wide swath of Americans the ability to acquire products that made their lives more fulfilling.  Their sales professionals realized their primary role was to help customers obtain the good things life had to offer.  At your next sales meeting, brainstorm with your team on approaches you can take to talk to your customer about how the products, services and end results of what you do improves their lives and provides access to the best things life has to offer.

• Technology is a tool, but not a complete solution. Sears tried equipping sales associates at 450 Sears and Kmart stores with iPads to help bridge the gap between online and in-store sales, but technology and omni-channel purchasing opportunities are not substitutes for knowledgeable, friendly and professional sales associates. 

• Invest in your brand. Have you been to a Sears lately? If you have, most likely you were depressed when you left.  Sears spent on average a paltry 91 cents per square foot in capital expenditures per store. Contrast that figure with Best Buy's investment of $15.36 per square foot in the same time period.  What impression does your showroom offer to someone who walks in the door for the first time?

• Your marketing must reflect reality.  Sears' marketing was top shelf - it has its own YouTube channel that offers helpful information. However, when marketing drove customers to stores, a different portrait was painted. Consumers found too few sales professionals whose knowledge was not the best, too many discounts and too much merchandise that was out of stock. 

The future of Sears remains tentative at best.  You can take the lessons from Sears though and make sure you don't suffer a similar fate. Focus on your customers' needs. Make sure your showroom and marketing reflect that brand that you want to project, and train your sale professionals to understand their role is to make their lives of their customers better. 

How to Put Your Team In Your Clients' Shoes

Empathy is a powerful tool to connect with customers and build their trust. Unless someone on your team has actually undertaken a bath or kitchen renovation, they really can't completely relate to what it's like to have part of their home ripped apart with troops of strangers marching through it for an extended period of time.  How can you emulate that experience without actually undertaking a renovation? Consider inventing a game or exercise that illustrates the challenges and stress that your customers encounter when selecting products and living through a renovation.  Here's a roadmap:

• Identify with your team what makes it difficult to select products, budget effectively, respond to unexpected changes and create realistic expectations.
• What comparable experiences does your team encounter when they make transformative decisions that affect the quality of their lives, such as buying a car or moving into a new home or apartment?
• How can you simulate, act out or play through the process of renovating a new bath or kitchen?  

For team members who have never had to stand in their customers' shoes, developing examples and games that replicate the experience will not only provide them with a deeper appreciation of a customer's concerns, it can also identify countless opportunities to improve the customer experience.

Boosting the Benefit of Bar Time

The networking during bar time and other events generates a big return while attending the DPHA Conference (October 11-14, 2018) at the Sawgrass Marriott Golf Resort & Spa in Ponte Vedra Beach, FL. At the bar, members can discuss how things are going with peers from across North America. It's also the only venue where dealers can receive a real inside perspective on the state of the industry and business practices that others use to address the daily challenges of owning and running a showroom. 

 

You can maximize the returns on your bar-time conversations in Ponte Vedra Beach by preparing in advance - sorry though, that does not mean to start drinking now. When someone asks "how's business", don't automatically respond with the tried and true, "good, could be better, great, coming around, on the uptick," etc. Instead, use those standard questions to engage in a more beneficial conversation by giving a couple of examples of how you have made things better, changes that are taking place or recent accomplishments. Instead of saying, "business is good," relate that business is good because a couple of new things you have tried are starting to bear fruit. For example, state something to the effect that you took a dive headfirst into the social media pool and already have acquired 625 new friends, several of whom you converted to customers when they came to the showroom. Or you may want to say, "we weaned our faucet lines from 163 down to 24 that we now focus on. Our sales, margins and profits all increased as a result." Two examples is all you need to really get the discussion going because your peers are likely to respond with recent accomplishments of their own. 

 

Bar time also presents a perfect opportunity to talk about problems you are working on or challenges you are looking to overcome. When you are networking with your peers, talk about what's different now compared to six months ago and why. It's a great way to catch up with old friends, and a better tool to really engage in a meaningful discussion. 

 

Finally, don't be shy about asking your peers for opinions and their advice. To get the conversation going, you may want to say, "our business is really starting to take off. I know you guys are also doing well, especially since you started using iPads in your showroom. Can you explain what you had to do to get buy-in from your staff to move away from paper catalogs and use electronic libraries on tablets instead?" 

 

When you are at the DPHA Conference, don't miss the opportunity for meaningful engagement and guidance from your peers. Instead of responding with the standard one-word or one-phrase answers to questions about how your business is doing, think about follow-ups that can start a conversation about challenges, or issues and experiences that you want to discuss from a resource that is rarely available at any other time of the year. And it's also okay to have a drink or two. 

 

Do you need more reasons to attend the DPHA Conference? Let us provide another one. It will make your business better. If you waited until the last minute to reserve, there's still time to make your business better. Contact Rebekah Covay at rebekah@dpha.net or call her at 630-854-3911 to reserve.