Crying Over Lost Revenue

Crying over lost revenue


Some retail teams don’t seem to understand the importance of ‘making the sale’. Why?

Really, retailers should be wondering ‘why aren’t the people on the sales floor, motivated to sell our products’?

A sales associate in a large furniture retail store is much more inclined to ‘sell’ products to customers than a floor/service/sales associate in many other types of retail stores.

If you agree with this statement, why do you suppose it is?

Is it the Pay for Performance compensation plan? Probably.

Anyway, suffice to say opportunities are being missed in many types of retail stores that do not engage in active selling to customers.

We looked at the possibility that a retailer who has no one who actually sells, wants to sell, or is expected to sell might think the products will sell anyway so there is no need to be active in the sales process.

To many of you that is laughable but, honestly, it does have a bit of merit.

If you are completely product driven with absolute perfection in your buying, visual merchandising, marketing and management then it could work for you.

Could…it is not a given.

But, if you are not quite perfect, your products will need a human spokesperson and that would be a sales associate or floor associate or team member – call it what you will.

Here’s a story to illustrate that a lack of motivation to sell – or ignorance, or indifference, or whatever it takes to lose a sale that was already in the bag – will definitely cost you sales…

Here’s the scenario:

The customer is in need of two counter stools.

She has been searching for just the right ones and she comes across them at a familiar home décor store – part of a very large chain with different offerings under different banners.

Some of their stores sell apparel for men, women, children, footwear, housewares, home décor, etc.

Some of their stores sell all of the above. Anyway, they are a pretty big player.

Back to our customer…she flags a ‘person’ down and mentions that she wants these two stools but they are both scratched. She asked if they had anymore.

No, they did not have anymore and probably wouldn’t get anymore. They are a once in and once out retailer.

They get fresh goods all the time and rarely get replenished on the same item.

The customer asked if they would offer any type of discount if she bought them, even with the scratches.

The ‘person’ said she would go and find another ‘person’ who might be able to help.

A couple of moments later, along comes ‘person 2’.

She looks at the damaged stools and says “oh, no we wouldn’t give a discount on these, we would just fix these up with furniture marker”.

‘Person 2’ hoped the customer would say “ok, I’ll be happy to take them at full price then”.

The customer said that she would leave them as she didn’t want to pay full price for clearly damaged merchandise.

‘Person 2’ said “ok, bye”, and she walked away.

The stools were $129 each so the total of the sale would be $258 if they were in perfect condition.

With a small discount – say 10% – the sale would have been $232.

No reasonable person would buy these scratched stools for full price. Doing so would be what we would call ‘dumb’.

No one does that unless forced or desperate, maybe.

And, make no mistake, no furniture marker was going to make the scratches go away, or seem to disappear to the naked eye.

‘Person 2’ will realize this when she tries to cover the imperfection in the attempt to dupe the next customer, if she bothers.

So, a sale…a sale of two imperfect bulky items to a customer who really wanted them and was willing to live with the scratches for just a bit of a discount…two pieces of merchandise moved out…floor space freed up for something else…two large items that would, eventually have to be marked down, red stickered and moved to a clearance area…none of that mattered to ‘person 2’ who said “oh, we would just fix these up with furniture marker”.

The customer could have pushed the issue or asked for the manager, but she did neither.

Some people are just tired of having to fight with retail store staff.

But here is the icing on the cake, so to speak!

The next day, the customer visited the same store in a different town – about 30 miles away – and guess what?

The REGULAR price of the identical stool was $99. (This was not a fluke. Other stools were also priced lower than they were in the first store.)

Anyway…that’s almost 25% less than the other store was selling them for. (fyi: This story is completely verified for accuracy. The retailer engages in the practice of regional pricing.)

Draw whatever conclusions you would like regarding their pricing strategy, but realize that if the retail company, the DM, the Store Manager, and/or the Sales or Floor Associates in this chain were motivated to make sales – this ‘furniture marker’ thing would not have happened.

A small discount would have been offered and accepted.

A true win/win.

I would be remiss if I failed to point out the value of missed opportunities based on this example.

Now, remember, the slightly discounted price of the imperfect stools in the first store would have been higher than the regular price for the identical stools in the second store.

So, here you go…it’s a conservative estimate of one of these sales being missed each day.

Guaranteed there are plenty more but let’s say there is just one.

• $ 232 lost in one store in one day
• $ 6,960 lost in one store in one month
• $20,880 lost in one store in one quarter
• $83,520 lost in one store in one year

If you own a 100 store chain…

$83,520 x 100 = $8,352,000

That’s a lot of money to leave on the table.

Remember…the opportunity was not missed because the customer didn’t want to buy or that she didn’t have money or that she was price sensitive or that she didn’t like the merchandise or, or, or.

No, the opportunity was missed because the staff member did the wrong thing because…


It’s amazing how one little mistake on the part of one staff member could cause so much lost revenue, isn’t it?

Missed opportunities are disastrous for a retailer, especially one trying to stay in the game.

Maybe ‘Person 2’ and her superiors could use some motivation to sell…perhaps, some training on how to do it, as well.

You can stop the lion’s share of missed opportunities.