Is Your Store Manager Costing You Money?
Posted on Tuesday, May 1st, 2012 at 12:42pm
What would your reaction be if I asked you to invest your hard earned money in a $500,000, $750,000 or even $1,000,000 business with great growth potential and a base of loyal customers? It would probably be favorable, wouldn’t it?
But what would your reaction be if I told you that the person in charge of this business was a 20-year old who has no experience in managing people, inventory, or a P&L? I bet your level of confidence that investment would be a little different wouldn’t it?
Sales Representatives or Store Managers?
All too often this is exactly what we find when we visit retail locations on behalf of many of our clients. Often, when discussing their retail operations, our clients say things like: “I promoted our top sales associate to store manager, but I don’t understand why can’t get their arms around the business” or “My manager was a great sales associate, and I wanted to promote based on proven results, but the store is doing worse than ever.”
The truth is that the skills sets that make for a top performing retail sales representative, do not necessarily align with those that are required to be an effective store manager and an unprepared store manager in a good store location can cost your business anywhere from $50,000-$150,000 per year in lost profits. Therefore promoting a sales associate – even a top performing one - to store manager without investing in a retail management training program for them can seriously hinder your results.
Retail Management Skills for Success
The truth is that many new retail store managers see themselves as “Super Sales Reps” – mainly because that is what they know best and they don’t know what else to do. “There is a huge gap between the skills sets necessary to run a profitable store in today’s complex retail environment and what many newly promoted store managers have” says David Goodwin, principal of Retail Advocacy Group and Retail Training Services. These include essential retail management skills like:
- Recruiting and hiring high quality team members
- Performance management including goal setting, motivating, and counseling sales reps
- Training and developing personnel on new products and services
- Managing and ordering inventory
- Preventing external and internal theft and inventory shrink
- Cash Management and Deposits
- Merchandising the store for impulse and add-on sales
- Implementing local and Company marketing programs
- Handling customer service issues and escalations
Stop Hoping and Start Training
Retail owners need to ask themselves “how much more money could their business be making if their store managers understood how to execute effectively on these skills. “The amount of lost profits is real and significant” says Goodwin. The problem is that in many cases it can’t be measured on a P&L or cash flow statement…It is money that simply never accrues to the business." Accepting the status quo for retail store manager training is not good enough any longer.
Retail Management Training is the Solution
There are numerous retail management training courses available for store owners and retail chains. These include highly cost effective elearning programs for retailers and instructor-led classes. Companies like Retail Training Service specialize in delivering these programs and can even assist retailers with implementing their own in-house training plans that include follow-up programs to ensure long-term success.
Would you like to learn more about how you can increase your retail results through affordable retail training programs? If so, contact us for a free one-hour consultation and needs assessment!