Saturday, October 18, 2014

The Appointment


There are a number of sales reps in the industry who are regular readers of this blog and while we have discussed in numerous entries how important it is to use them as a resource, this is a repost of an entry that is focused on giving them something to use.

The job of an account manager has become more difficult as the cost of traveling and over-nights has increased, buyers are reluctant to commit and the industry’s competition has grown while sell-through has shrunk. With this in mind it is most important that each appointment with an account have purpose and accomplish certain goals. Those goals should be to establish meaningful relationships as well as to get the order. This involves some of the following including a close "based on space" that hopefully will eliminate the dreaded "waiting on paper" syndrome.

The underlying theme of this discussion of closing a sale by selling to space can be used with any category of goods and in almost any retail situation. We will illustrate this concept with the hypothetical of the apparel rep attempting to place spring apparel for the first time with a head pro with which he/she has been unable until now to get an appointment.



The Appointment:

Arrive early and study the shop as to the type of fixtures, location of fixtures and wall displays and their capacities for apparel both in terms of number of skus and total units.

Pay attention to the extent that the shop is departmentalized. Also make a mental note, albeit a cursory evaluation of how many vendors would comfortably fit in this space.

Introduce yourself to everyone available on staff who typically will be the representative of your product when you leave.

The Presentation:

Make the company prescribed presentation of the line pausing often to ask open-ended questions along the way.

Attempt to determine with these questions the nature of the shop’s business in terms of turn of product, type of clientele, competing brands (successful and unsuccessful) and what price points are important - or not. Obviously the other information you are looking for is what the buyer/head-pro that you are presenting to likes most about what you are showing.

Use this opportunity to express your empathy with their business. Develop the skill of being a good listener as well as presenter. Conveying the impression that you are adept with your product line and are very articulate is important. Conveying that you care about your potential customer’s business is at least as important and starts with being a good listener.

Bob Phibbs (the Retail Doctor) makes the point that “sales are most often lost early in the interaction because the customer for your brand, service or product simply doesn’t trust you.”

The best way to overcome any chance of mistrust is to create trust and the best way to accomplish that is to ask the right open-ended questions, be a good listener and convey empathy.

The Close:

This frankly is where many sales meetings fail. The presentation can be rehearsed but a good close is almost always the result of customized ‘thinking on your feet.”

Distill all the information that you have learned to this point and determine from a merchandising standpoint where best to put in the shop what the head-pro has intimated he likes and may work with his clientele. This becomes the close.

Remember that the close you are now ready to suggest is just that – a suggestion, an idea – and should be put forward with a “how about we try this” attitude.

The ‘Visual to a Yes':

“Mr. Nye you mentioned you particularly liked our ‘Merion Collection’. That lead nesting table as you walk in the shop looks comfortably well merchandised with 18 skus and a bust form.  Let’s put together this look (lay out 18 skus that look great folded together and make sense). We can book it in a typical 1-med, 2-lge, 2-xl, 1-xxl which would make the delivery 108 units and would cost approximately $xxxx.xx.”

“You had also mentioned you thought our Performance Solid was perfect for your membership. This is an in-stock program so we can manage this staple all season and make it a real money-maker. How about we take the four-way that sits behind the lead table and which has 15 inch straight arms and put eight colors of the solid (2 colors per/arm) eight deep per color. Hang the eight shirts on a grid. We can consider this a par-level of 64 units and logoed will cost $xxxx.xx. I would like to come back at your convenience and work with someone on your staff to understand the business importance and the how-to of counting and filling this program.”

“We can book a back-up order for the fashion table assuming a turn of product in 4-6 weeks with another 18 skus that would look like the following or if you are more comfortable we’ll wait and see how the ‘Merion group’ sells through.”

What have you accomplished?

You have created a total visual of your product line in the head-pro’s space with goods that he/she has already specified liking or thinking appropriate. You have taken any and all mystery out of how to move forward with the process. Instead of asking for the business you have suggested exactly what the partnership would involve and assuming the close to be well received only needs a "Yes" to be completed.

Without announcing that you are about to deliver a primer on buying, that’s exactly what you have done. The buyer/head-pro should be realizing that your paint by number close is the way they should be thinking through the rest of their pre-book.
You have established yourself as a good listener and empathetic to the success of your product in their shop. Along these lines you should suggest at this point that at an appropriate time you would like to come back and have a round-table sit-down with the entire staff to discuss your brand, product knowledge, salesmanship and service.

You have established yourself as an “Idea-Man”. You not only know your line but can suggest and describe the important points of the partnership from “buying to space” to raising the level of service of the staff. The sales associate in the territory deemed the “Idea Man” usually gets the first call when there is a tournament or corporate need or any other extra-curricular occurrence.



This is not the only way to close a sale or handle an appointment but it is effective. A typical close in the industry goes something like this. “Our records show that you did $8000.00 with us last season, would you like me to work you up an order for you for that amount and email it to you for approval?” At this point my response is always “What would this order look like and where will we put it?” These are fundamental questions that need to be answered before any ordering should be done and better that those answers be the idea of the rep, especially if we don’t have that sales history yet.

Monday, October 13, 2014

Pricing - the Pariah

Any discussion of pricing or markup formula at most golf facilities is best avoided for two reasons.

1. There doesn’t seem to be any two pro shops that markup product quite the same.
2. There seems to be some sort of hallowed reverence at most shops regarding the markup formula that is employed – perhaps because of some noteworthy history as to its inception.

Retailers everywhere are experiencing shrinking sales and more price conscious customers. This being the case it is more important than ever to make the most of each sale without trying to make so much so as to lose the sale and so I felt it time to touch on the pariah.

French Lick Resort

The principles that I want to apply here will be in an effort to price goods as to what the “market will bear” (MWB) keeping in mind always that price is not all we are selling (we are selling service, 'the experience', etc.) and that promotions are probably a better first markdown than the typical twenty percent.

Here is a typical occurrence and some math and definitions. UPS drops off a delivery of one hundred shirts. An assistant enters the goods into inventory and prints price stickers. The shirts cost $38 each and there is a $3 logo charge = $41 per shirt. The markup formula at this hypothetical shop is keystone – 100% of the wholesale price. The shirt will retail for $82. The gross margin is the percentage of the sale resulting from the markup. In this case: $41 divided by $82 gives a gross margin of 50%.

The principle of “market will bear” (MWB) applied here is a simple round-up process that is a result of asking the question “Will the consumer who will pay $82 pay $85? Depending on the shop and the knit involved this could be taken up a notch to “Will the member who will pay $85 for this golf shirt pay $89?”

Applying this principle to our delivery of 100 shirts produces the following:

$82 minus $41 = $41
$41 multiplied by 100 shirts = $4100

$85 minus $41 = $44
$44 x 100 = $4400

$89 minus $41 = $48
$48 x 100 = $4800 or an increase of 4% gross margin and an improvement of 17% markup over the standard formula.


It takes 1219 unit sales at $82 to produce $100,000 in revenue: at $85 - 1176 units and at $89 – 1123 units respectively. The increase in profit per $100,000 in sales depending on the extent to which the round-up principle can be viably applied could be as much as $4000 on almost one hundred less sales.

Bandon Dunes

This is not necessarily practical when vendors pre-ticket their goods with suggested retails and that is one of the reasons it is always a good idea to be on the lookout for new lines that are not so well known. It is also the reason that building your own brand with quality private label goods should be considered as part of your selection. The other obvious way to increase initial markup is obviously to make a portion of the shirt buy off-price.


The bottom line is similarly affected when markdowns are reduced. The typical first markdowns of 20% are being acknowledged by retail experts as not working in today’s climate, certainly not being anywhere near as meaningful as they were a couple of years ago. The hypothetical $82 to $89 shirt markup increases the margin by $14 on two shirts and provides a 'buy two and get a free hat, glove, dozen pinnacles, etc.' promotion.
Bandon Dunes






Saturday, September 13, 2014

Are you after it?



 A recent survey of retailers showed that over 70% of those who responded had fewer than 10 promotions and /or special events per year – and 36% had fewer than 5. In today’s market place successful retailers have realized that a promotional image is not demeaning but necessary to sustaining and increasing volume, attracting new customers and more importantly in golf retail, keeping the regular clientele that you have, interested in what you are doing. In order to facilitate this it is imperative to plan promotions well in advance and market them accordingly.


 I recently mentioned “buying” for promotions at a sell-through boot-camp put on by PGA Magazine and the response from the participants was that they were much more likely to put on sale what they were over-inventoried in than they were to BUY for a planned promotion. If the purpose of a healthy calendar of promotions and special events is to keep the member or customer interested why would you think that merchandise that you’ve already had trouble moving is going to cause a stir. The survey above was not taken of golf retailers, if it had been the results would have been different and rightfully so – most green-grass golf shops are not fully functional twelve month a year; they do however have the type of repeat business that needs to continue to be inspired.


 The constant search for new promotions is why many retailers do what they do, that is the part of the business they love. For the golf shop manager who doesn’t share this love and whose head is spinning when planning promotions is the issue, there are some things to keep in mind that ease the pain. First, not every promotion needs to be a large event and almost none of them HAVE to be a sale. You can, as a matter of fact, promote to small segments of your clientele with specialized email, promoting certain brands or sizes or birthdays depending on how good a job you are doing of profiling the customer.


 The industry has already adopted demo days to draw crowds and utilize vendors. This concept should be extended to categories other than golf clubs. Vendors and their management, account managers and designers could be invited periodically to help spur interest in certain of their product being promoted. When a local rep introduces a new product, collection, fabrication or category that you like instead of just placing an order and saying we’ll try it, talk about all the possibilities of its promotion that could take place – POS obviously, email blasts, newsletter mention, social media as well as someone from the company spending time with the customers whether it be an announced visit or a party with wine and cheese. If you have a membership of avid fishermen invite a high-end vendor of fishing equipment and have a fly-fishing presentation. I think it is important to change the mind-set of why we have promotions from the “we need to put this on sale and get rid of it” to “let’s do something that will engage the customer – let’s have some fun.”


 The promotion calendar that is planned should be reflective of how we perceive ourselves as retailers and the image we are trying to convey about who we are. Walmart sells price. Home Depot sells ‘How to.” Starbucks sells “hip and cool.” Macdonald’s sells “fast.” Southwest is now selling “heart.”  Decide who you want your members and regulars to see you as and plan a series of events accordingly, making sure you are telling the right story in as customer friendly and serviceable way as possible.