Very shortly I will be celebrating the career milestone of 40 years in this fantastic industry. ("Never," I hear you cry, "he looks far too young.") I was startled to realise, looking back on my career, that of the six garden retailers and nurseries I worked for before starting my own business only two still exist — and hopefully that is nothing to do with me.
All of us can recall great horticultural businesses that no longer exist and it is probably fair to say that there are a lot fewer garden retailers and nurseries in existence today than there were 40 years ago. As a supplier to the garden trade, one might regret the reduction in the potential customer base. But on the other hand, garden retailers might welcome this consolidation in the marketplace in the hope that there is less competition.
A better way
When these types of discussions about the industry come up, many owners and managers believe that they just need to get new customers into their business. But perhaps there is a better way. Let us think about that for a moment. There are three basic ways to grow your sales:
1. Get new customers
Of course this is important because each year a business will lose customers for a variety of reasons. However, in terms of marketing, attracting new customers is a tough call.
2. Get your customers to make more frequent purchases from you
This is slightly easier than getting new customers but still calls for some smart marketing, such as loyalty programmes.
3. Get your customers to spend more each time they make a purchase from you
This is by far the easiest way to grow sales and can involve everyone in your organisation.
There is a book to be written about the above three methods of growing your business, but here I have only 1,000 words. So, let us focus on two issues. First, let us assume that you do need new customers in your business. The key then is to make sure that you get the right customers, which means they need to be qualified or, in other words, suitable for your business. There are four main criteria that can be used when qualifying customers:
1. Do they have the authority to purchase from you?
It might be that you are approaching someone who does not have the power in their organisation to spend money. Find out who does and focus your efforts on them
2. Do they have the money?
Doing credit checks is essential to ensure that your prospects can afford to purchase from you. If you are retailing you need to ask yourself whether your potential customers can afford to shop at
3. Do they value your unique selling proposition?
This is the aspect of your offer that makes you different from your competitors.
4. Does what you sell fit in with their overall desires, plans or needs?
For example, if someone is planning to grow climbers and you sell conifer liners then clearly you will not fit into their overall plans. Do they have a need that you can meet?
By using these criteria to identify the right type of customers to sell to, you will save time and money and bring a much more focused approach to your marketing.
Getting new customers, however, is still a tough challenge. It is so much easier for you and your team if you can put plans in place to sell more to your existing customers. This, of course, starts by measuring — you cannot manage what you do not measure. If you are a supplier then measuring the average order value is essential. Likewise if you retail then measuring the average till transaction is also vital.
Many multiple retailers also measure the number of items per transaction. This is a great way of tracking how well staff are upselling — if I buy trousers in Next there is something wrong if I have not purchased a shirt. This measurement will enable you to track the success of your attempts at creating linked sales.
Once you have a way of measuring the average sale you then need to share this with your team and encourage them to set targets for an increase in the average sale. If you get them to set the target, they are more likely to achieve it. Set it for them and chances are they will be less committed to meeting it.
Having set the target you then need to find out a way of reporting the results to them on a regular basis, which could be daily, weekly or monthly.
All basic stuff being done by many organisations, I know, but sadly not by everyone. Those who are monitoring the average sale, however, are often failing to coach team members on how they can increase it, and this is where we need more investment in training and skill improvement.
It is not enough telling people what the target is. They have to be given ideas and encouragement to help reach it. You need to regularly communicate with your team about their progress, whether this means having a daily five-minute huddle around the till or a formal sales management meeting every week.
Changing the culture
Communication does not stop at just giving your team tips and hints on how to sell more to existing customers — you also need to be recognising, celebrating and even possibly rewarding those members of staff who show excellent initiative at selling more to your customers. Get them to share the secrets of
their success with all the staff. In other words, start changing the culture to create a learning organisation where everyone wants to improve their skills.
So, faced with consolidation and a reduction in the number of nurseries and garden retailers in the UK, it is understandable to be concerned at the dwindling customer base, particularly if you are a supplier.
Customers may indeed be fewer, but generally they are larger companies now with a greater capacity and power for purchasing, and that is what you can exploit.
Make sure you get the right new customers if you need them, but spend more time and effort building up relationships with existing customers so you do not neglect or miss the opportunities there. Get to know their needs, make sure you can meet them and become their automatic choice. After all, it is easier and often more time- and cost-effective for them to stay with a supplier they trust and know, and one that delivers what they need.
Neville Stein is managing director of business consultancy Ovation