Posts Tagged ‘currency’

Socratic Retail Method

July 11, 2010

Mentor: Tell me, when you work in retail, where do your paychecks come from?
Pupil: Your employer?
Mentor: Yes, but where do they get the money to pay you?
Pupil: Hmm. They get money from money they make?
Mentor: Very good. How do they make this money?
Pupil: By selling the product they carry.
Mentor: What if they do not make money selling goods?
Pupil: Then they have no money to pay their employees. But if they make a lot of money, where does that go?
Mentor: Ah, you are getting ahead of yourself, my pupil. It is true, if they make more money, one thing they can do is hire more workers.
Pupil: Why?
Mentor: The more money they make generally means they need more help to produce–more people to unpack and replenish clothing, more salespeople to sell, and more cashiers to take the money.
Pupil: Oh, I see.
Mentor: Although each aspect is important, what part do you think is more critical? The replenishment, the salespeople, or the cashiers?

Pupil: The cashiers.
Mentor: Truly?
Pupil: No?
Mentor: What do cashiers do?
Pupil: They take money from the customers, and this money is used to pay the workers.
Mentor: What influence do cashiers have upon the customers?
Pupil: They take the money.
Mentor: Do they help customers find products or fill their needs? Do they help build the sales?
Pupil: No, I do not think so.
Mentor: Although there are very skilled cashiers who can add-on to sales, and generally, they do not directly interact with more than one customer at a time. They cannot multitask multiple customers at once.
Pupil: This is true. Do they not also offer discounts and coupons which also decrease the amount of money made?
Mentor: Very good, you have kept up with your studies. Cashiers have the duty and responsibility to lower the amount customers spend, thus lowering the total profits. This done multiple times, through many transactions can have an overwhelming effect on total profits–imagine if they gave 15% off all transactions. Cashiers have an important role at the end of the process, because without them, we could not complete transactions, but they are not most critical to the success of selling.

Pupil: What of the stock-people, they are the beginning of the story, without them the product cannot even be found.
Mentor: Yes, they are important. They unpack the clothing, preparing it for the floor. They replenish the clothing when it gets low. Without them, supplies run low. But how do they directly influence the customers?
Pupil: I do not know.
Mentor: Even with a fully stocked table, that does not directly entice a customer to buy anything. It is like a piece of art in a museum to look at, but you need someone there to guide you through the painting, to understand what you are looking at.

Pupil: So the salespeople are important?
Mentor: In retail, which people often receive commission as a part of their job: the salespeople, the stock-people or the cashiers?
Pupil: The salespeople.
Mentor: Why?
Pupil: Because they directly interact with the customers, helping them to find product they are interested in, building outfits and adding-on product before the customer gets to the cashier. And many salespeople are skilled at multitasking multiple customers at one time.
Mentor: Very good. Customers have already made a majority of their buying decisions before they even reach the cashiers. And with discounts, coupons, and other additions, which subtract from the total sale, cashiers have less impact on increasing sales compared to salespeople.
Pupil: And salespeople can ask stock-people to help find product that is missing on the sales floor.
Mentor: Yes.
Pupil: Do salespeople receive credit for these actions?
Mentor: In some businesses, they do receive commission. Or they receive acknowledgment for their sales above and beyond the normal. The salespeople work hard get to know customers, to add-on sales, to bring profits directly into the store so the cashiers, the stock people and other salespeople can be paid for their labor. They can directly influence a customer that is ‘just looking’ into someone who ‘spent more than they expected’. They directly help customers that don’t know what they are looking for. They help customers find the perfect gift for a loved one, and something extra for the customer, too. They bring additional value to each customer that makes a purchase.

Query 1
Pupil: But is there not businesses that only recognize cashiers for giving discounts to customers? They receive acknowledgment for lowering the store’s profits. Why don’t the salespeople get acknowledgment for building the sale which got the customer to the cashier?
Mentor: If you were a salesperson who worked hard, building up a sale, getting to know a customer and making sure they left happy, how would you feel if you were dismissed and forgotten, and a cashier is recognized for signing someone up for a credit card and giving them a discount off of your hard work?
Pupil: I would be saddened and demoralized. I would feel like my work isn’t worth anything. Why do cashiers get recognition for every credit card they get, but salespeople do not get recognized for every single sale they make? They are the ones helping fill people’s paychecks and keeping them employed!
Mentor: Calm yourself, my pupil.
Pupil: I am calm. It just doesn’t make sense. It is illogical.

Query 2
Mentor: What happens when a cashier is processing a card or giving additional discounts that take a long time to process?
Pupil: Salespeople are asked to cashier? They must back-up the registers.
Mentor: Yes, and what happens to the customers that are ‘still looking’ or need help finding products?
Pupil: They are left ignored and forgotten? So the sales floor is left empty, while everyone is at the cash registers, customers are left with no one to help them…
Mentor: Yes, go on. What happens?
Pupil: So the remaining customers will buy less?
Mentor: And many may leave because they did not receive ‘customer service’, all the while this happens, all the additional manpower is taken to the cash registers for the sake of giving an additional discount.
Pupil: And the ripple of one discount means less money for the store… And by the time the line of buying customers is gone, there are no customers left in the store who need help, because they are not going to wait for a salesperson that isn’t there when they needed help.
Mentor: Yes. But if people are only given credit and recognition for giving discounts, and signing up credit cards, and no recognition is given for making sales, would not all the effort go towards the cashiers? And effort towards selling would diminish.
Pupil: Why would any business do this? They would be choking the life out of their own sales. It would be like Ouroboros, the dragon who swallows his own tail. A business like that cannot hope to be successful.
Mentor: What business would be successful?
Pupil: One that prioritizes selling. One that emphasizes and recognizes salespeople as critical and crucial to the life of the store. A business that knows and understands selling and the skill of adding to sales is more important than giving discounts.
Mentor: Very good. That is why we went through this exercise. Hopefully you understand a little more about selling now.