Managing For Money
Does Decorator Training
Pay Off?
Of course it does! If you manage the numbers
by Steven C. Bursten
If you manage a window
coverings business making from $500,000 to $5 million-plus, chances
are decorator sales commission expense is one of your biggest operating
costs. At commission rates of eight to 12 percent on sales, commission
expense is more than advertising, rent, or installation.
How can you get the best results from your commission investment,
and how can training help you achieve the return on investment you
really want?
TRAINING: EXPENSIVE OR CHEAP?
Training can be expensive. It’s hard to justify. Many sales
managers have no way to judge whether to train or not to train,
and no way to evaluate training after it’s finished. What should
the content be? Sure, sales closing is always good. Sure, product
knowledge may be worthwhile. Sure, understanding customer motivation
can be excellent. But, what do your decorators need, and how can
you give them what they ought to have?
• Start with a performance benchmark. A 67 percent closing
ratio and a $1,500 average customer sale. Measure your decorators
against this guideline. Basically it says: every 100 appointments
result in about $100,000 in sales.
You may have a decorator with only a 50 percent closing ratio, but
who sells an average of $3,000 per customer. That decorator squeezes
$150,000 from every 100 appointments—50 percent above the guideline!
That’s good. You may not want to tamper with this person’s
closing ratio.
Can you see how a benchmark and comparisons can work to help you
manage? The numbers will tell you the training you need . . . and
what it will be worth when it works. The key point: When a decorator
goes on 100 appointments, does he or she sell less or more than
$100,000? If the decorator is below, then you can develop a selling
system and training may be cheap.
Now, to fully grasp the training issue, add one more factor: Advertising
lead cost. The complete story is: How much does it cost to sell
a customer when you combine commission and advertising expense?
• Combined costs are what counts. When your decorator sells
$100,000 as proposed in this guideline and her commission rate is
10 percent, then your commission cost is $10,000. Now, add in your
cost per lead for advertising. If your direct cost for an advertised
lead is around $200 (it is often more) then 100 advertising leads
that result in appointments would cost you $20,000!
Of course, your leads did not cost that much because you have a
lot of repeat and referral appointments. And that, dear manager,
is the point of this discussion.
• Decorators should build a following and generate leads
on their own. If a decorator does not have a following and you
must give this decorator more advertising leads than others, then
whether the decorator or your company makes money depends on how
well this decorator converts those leads to sales!
If the decorator is not at benchmark, then $1,000 in training may
be cheap for you to invest to get him or her up to par!
If you have another decorator who has a good following, who builds
relationships, receives calls every week direct from previous customers,
and if office call-ins frequently ask for that same decorator, then
that decorator is making friends and building relationships. The
result: high quality leads without advertising!
That decorator makes money for herself and for the company.
WHAT TRAINING DO YOUR DECORATORS NEED?
There are many kinds of training in our complex industry. Sometimes
it is good to just get out and mix with people. Attending a supplier
program that costs nothing may be valuable—probably more for
the break and the people the decorator meets even more than the
products presented.
Attending a Window Coverings Association of America (WCAA) chapter
meeting and interfacing with others can be beneficial and refreshing.
There is always time for training like this in moderation, say one
day a month. But, strategic training is different. It’s based
on a selling system.
• Strategic training is by the numbers to improve the numbers.
Strategic training should be based on specific objectives. Frequent
readers of my columns know there are only three things that will
improve sales:
1. Appointments
2. Closing ratio
3. Average size of customer sale.
As a manager, you want to start with specific, numeric objectives
for each of these areas. The guideline above is an excellent start.
Of course, adapt it to your business and your area. You already
know that each decorator has strengths and developmental needs.
Begin by finding out what they are doing now.
Training can be about how to get more referral appointments (follow
up, building relationships, calling back, etc) or it can be about
closing. It can also be about ways to boost the average customer
sale. If you plan your training it can pay off handsomely. Remember
in a previous story where we showed the differences between beginner
and professional?
Beginner: One appointment a day, 300 per year, closing 50
percent at average $1,000.
Professional: Same 300 appointments, closing 80 percent at
average $3,000. The difference? The beginner sells $150,000. The
pro sells $720,000 and supplies many of his own leads!
Is it worth it to train the beginner? Is it worth it to keep the
professional motivated? Probably no reasonable cost is too high.
Certainly $10,000 to $15,000 as a training budget can potentially
pay off big if results are managed and you have a good system.
• Who are the best trainers in our industry? There are
many wonderful trainers teaching different things. Some trainers
teach measuring, some teach design. Others are pure sales. Two of
the best for selling that I have met in a long career are JoAnne
Brezette and Sally Tucker. They are both awesome. You cannot go
wrong inviting either of them to your business for a day.
If you have many decorators with a variety of needs, consider Cheryl
Strickland’s Traveling School (www.chfindustry.com/html/school_3.
html). Sure, a lot of it will be on workroom fabrication, but a
lot will be on design and technical issues every decorator needs.
Strickland’s Traveling School is a new idea for our industry,
and I think it will be a winner. I will be at all the schools and
Valerie will be with me at most, as we cover marketing and sales
to round out the school’s curriculum. We hope to see you as
we make the circuit this summer.
In closing, remember, all good training begins with numbers. “If
you can’t measure it, you can’t manage it.”
Steven C. Bursten is the retired founder of Decorating Den
Interiors and author of a how-to book on new business start up,
Bootstrap Entrepreneur. He is president of custEmers.com, specializing
in affordable Internet marketing tools along with tried and true
techniques. Bursten welcomes your questions about marketing, sales
and customer relationships. Request his new report for businesses
that sell $1 million a year—or want to: “Solutions for
Million Dollar Managers” via e-mail: million.dwc@custEmers.com.
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