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Making up the customer’s mind

Selling to high dollar customers

Several years ago I had the opportunity to moderate a panel discussion of outstanding jewelers. While each had a fascinating story, the one I remember best is the store in Omaha, Nebraska that is owned by Warren Buffet.

When Buffet’s Berkshire Hathaway holds its annual meeting each May, there are in excess of 30,000 in attendance. As these stockholders descend on Omaha, many decide to shop at the jewelry store. The amounts of drinks and food consumed is astounding as is the number of terminals necessary to process the bankcard purchases.

While that is challenging, perhaps the biggest challenge is the sales staff
understanding the customer.  Envision a customer walking in the store to “just look around” and then purchasing a wristwatch for $500,000. The manager of the store said there were employees who would struggle to make a sale like this because they can’t envision how someone could spend that much money on a whim.

While this may be unique, the understanding of the customer is a challenge for many businesses. In the past few weeks I have experienced a similar situation several times; a service center that wanted me to accept the warning lights on the dash of a car as something I can ignore; a dentist who said a chip on a tooth did not need to be repaired; a pair of slacks on the sale rack instead of showing the rest of the selection because, “everyone likes a deal”.

This story is not about my spending money. It is about, with each example, a salesperson making a decision for the customer. Of course, the solution lies with the salesperson engaging the customer in conversation and asking questions. I remember reading a report that gave an example of a product with many options of price available.  The example had six price points for the customer to choose from. Research showed that in suggesting a particular price point, if the salesperson was too high or too low by two or more price points, the sale would likely be lost.

The essence of these examples? We do not all shop alike. Invest some time and read, “Bobos in Paradise” by David Brooks. We all have things we buy because of need and we have items that we spend more on because that is where we want to spend discretionary income. People like the watch purchaser often make a decision because the product or service fascinates them; money is no object.

We know a retailer with multiple stores selling products that range from hundreds of dollars to $20,000. To help their salespeople understand the customer, at the start of the day, each salesperson is “given” $1,000 in hundred-dollar bills to hold in their pocket so they can get an idea of what the customer can easily spend. (Yes, they do give the money back at the end of their shift each day)

At one point, Cadillac moved their headquarters from Detroit to New York City so that their employees could better understand their customers.

The thread that weaves through all these situations? You may be losing sales, or worse yet, losing customers, because your salespeople are making decisions for your customers. There is a first reason why you have so many choices in any product category in your store; people have different budgets. And if you have salespeople instead of your store being like a self-service mass merchant, you are doing so for a second reason; they are salespeople and not just cashiers.

These two reasons are very important to your business. Are you making the effort in getting those two same reasons on the same page with your customer’s buying style?

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This article is copyrighted by Tom Shay and Profits Plus Solutions, who can be reached at: PO Box 128, Dardanelle, AR. 72834. Phone 727-823-7205. It may be printed for an individual to read, but not duplicated or distributed without expressed written consent of the copyright owner.