Sales tactics part 1: Average ticket
Somewhere along the road to success, sales lost its soul. Whereas a sales person used to be there to help guide the customer, many customers today assume a sales person's only objective is to separate them from the contents of their wallet. This is an especially sad reality in the tea business, where the product really does require an educated expert to properly guide the sale.
My objective when I joined Adagio was a $25 annualized average ticket for stores in the early years of building a customer base. Higher averages are certainly possible, but they are often are the result of limited appeal to the casual consumer and lower volumes. The hard sales tactics employed by some of our competitors are very effective at driving the average sale AND turning off the curious customer who's not willing to be pushed into buying a cast iron teapot and $50 worth of tea. Only 10% of the population are currently drinking loose tea, and we see a brighter future in introducing the 90% to premium tea than in milking every penny out of the existing tea drinker.
As of the end of March, the Adagio Retail operation had been open for business for 6 months and our average sale was in the neighborhood of $16 (not including December's average of a little over $20). Our traffic counts were good, and customer feedback was glowing, but the customers were purchasing too little to support the amount of time we put into each transaction, and too little to support the high rents that come with great locations.
Starting in early April, we set out to fix this. Sales shouldn't be a dirty word, but since it is, allow me to speak of "customer engagement". Any customer can enter the store and look around on their own, but good customer engagement allows us to inform the customer of how the store works and what their options are. It also allows us to help them cut through the clutter of several hundred products and find the product or range of products that are most likely to meet their needs. Customer engagement is CRITICAL to customer satisfaction.
The teams accomplished a 25% increase and drove the average ticket up to around $20 during the month of April. Our averages have moderated a touch in June, thanks to fewer reasons for gift buying and most customers drinking A LOT less tea, but we're holding steady more than a couple dollars over our average for the winter months. This should set us up very well heading into the fall and the holidays. We must be doing SOMETHING right if our average ticket in the summer is now within 5% of our average during the gift-buying frenzy of last December.
If you're anything like me you're now getting impatient. So what was the difference? What did we do to increase the average sale without hard-selling and turning off the customer?
We trained on Six Keys to Successful Customer Engagement:
1. Warmth
2. Passion
3. Observation
4. Knowledge
5. Communication
6. Tactics
Great service can overcome a poor retail store. A great retail store cannot overcome poor service.
In my next article I'll unpack each of these six keys to successful customer engagement and get into the details of how we at Adagio are training our sales staff.
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This article is a continuation of the Profitability Strategies Series:
1. Package size
2. Pricing
3. Sales strategies Part 1 and Part 2
4. Merchandising display strategies
5. In-store marketing and signage
Adagio Teas
Twitter: @AdagioRetail