In my last article, I addressed the importance of “individualizing” store growth plans based on each store’s metrics and specific DNA. Now, let’s discuss the next step in the process — looking further inside the “black box” to the individual associate’s performance to help each person reach his or her full potential as reliable, strong contributors to store growth.
Developing associates to be more productive has never been more important than right now! Retailers face increasing pressures on labor costs. The Affordable Care Act (ACA) forces companies to make hard decisions on full-time vs. part-time staff. Although many retailers remain committed to maintaining a core staff of full-timers, these higher costs must be offset somehow. Our answer is to systematically increase individual productivity. When associates learn and apply new skills to help more customers buy, and buy more, they dramatically offset increases in wages or benefits.
As we all know, retail boils down to customers and associates. Associates are the ultimate touch point — where their interactions with customers strongly influence the likelihood of hearing, “Yes, I’ll take it.” So what’s the best way to systematize individual performance improvement and develop more top sellers?
From my point of view, it starts by making sure you have three critical elements in place:
- Clear standards for behavior and productivity
- Measurement of individual performance
- Coaching of behaviors
- Clear Standards You Can SEE
Visualize that perfect customer experience — the one we hope that every customer gets when they interact with our associates. Is this vision clear in our mind? Can we communicate it to others? Even if we answered “yes,” we know that day-to-day execution is inconsistent, with some associates delivering it better than others. How do we fix it?
First, our desired customer experience needs to be translated into observable behavioral standards. Define “what right looks like” — the specific and measurable behaviors associates are expected to deliver to each customer, every day. When defined this way, everyone has a clear picture of what they should see and hear if behaviors are being demonstrated correctly and consistently on the retail floor.
Now think about our associates’ roles. Is each associate expected to interact the same way with customers? Should some roles require more and higher-quality interactions? Defining interaction behaviors for each level of associate — from entry level part-timers through the highest paid, most experienced full-time associates — is a more nuanced approach to setting standards.
- Linking Measures to Behaviors
Next, we need to measure individual performance because if we can’t measure it, we can’t manage to it. This measurement needs to be granular, directly reflecting the actual behaviors of each individual associate. After all, we can’t drive “individual” performance improvement if we can’t accurately see what an individual is doing well and what they need to improve!
But it’s not enough to just understand an associate’s sales results. We need insight into “how” the result was achieved and understand the “why” behind performance successes and shortfalls. We need transparency into each store and each shift, providing a clear view of what happened and why. From my experience, this is the only way we can truly isolate individual performance and determine the specific behavioral development opportunities for each individual in a consistent, scalable manner.
When we analyze granular data in this way, the results are eye-opening for our clients. Productivity among associates in the same role typically ranges between 300 to 500 percent from top to bottom based on annual productivity measures.
Let’s look at a simple example: Katie — a full-time sales associate — regularly achieves $450 in sales per hour. Meanwhile, Michelle — in the same role and working similar hours — achieves $150. Why such variation? Is this difference in productivity due to external factors (e.g., how busy the store is during their shifts) or something about the associates themselves?
With the right data matched against defined behavioral standards, managers can readily see these differences in performance. As a result, they can make better scheduling decisions and trade-offs between team members, understand the full potential of each associate’s time on the floor, and know how to develop associate skills to improve performance as mapped against specific, individual opportunities.
- Coaching Behaviors and Developing Associates
“We can’t expect our managers to coach behaviors. They’re operators!” We hear this often from retailers. However, we expect our managers to maintain merchandising standards by coaching, so why can’t they coach individuals on their behaviors? The answer is they can — when they have clear “observable” and “measurable” behavior standards so they know what to look for, along with measurement tools and learning materials to develop them.
Historically, “coaching behaviors” was difficult because managers didn’t have a line of sight into individual performance. Now that they can have this insight — with granular data that reflects individual behaviors — managers should be out of the back room and on the selling floor, observing customer interactions and effectively coaching associates.
Through ongoing coaching and development, associates learn to see the connection between the quality and frequency of their customer interactions and their resulting productivity. One associate put it well, “I never knew how big a difference my actions and behaviors could make!”
For the Katies and Michelles out there, we now have the right tools to identify and develop their individual strengths. As one manager put it, “I can finally look at two different team members and give them individualized, specific coaching that makes a difference.” It’s empowering for our managers and highly valuable for our associates, resulting in more sales, increased job satisfaction, and a reduction in turnover.
- Performance Improvement is a WIN, WIN, WIN!
When retailers appropriately recognize and reward their strongest performers, help marginal performers improve, and proactively facilitate the replacement of underperformers, they establish a powerful upward spiral of success. The result is greater employee engagement, more consistent customer experience delivery, and dramatically improved sales and profits.
As employee costs continue to go up and competitive pressures increase, retailers need to reevaluate the value they are getting from their huge annual expenditures on labor hours. In the past, it may have been enough to focus on cost containment aspects of labor. Going forward, retailers will need to focus on improving the productivity of their labor as well. When this is done in the ways outlined above, everybody — employees, managers, customers, and shareholders — is a winner.