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How to Bring in More Traffic & Avoid Sales Slowdowns

Furniture World Magazine

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There are seven sources of retail traffic, but only four of them are pillars of traffic that can be managed to get positive sales results over short time frames.

The furniture industry is coming off one of the biggest “promotional events” in its history: two years where consumers spent more time at home, encouraged to do so by health officials, the press and the government. In 2021, many furniture retailers experienced record increases driven by purchase-motivated customers. They had higher traffic, better close rates, increased profitability and cash flow. Also, higher average sales resulted from price inflation. During the period following mandated shutdowns, salespeople were just trying to keep up with the volume of traffic coming through the front door.

It was inevitable that this externally influenced retail traffic generating phenomena would come to an end. Salespeople, who were too busy in 2021, are now complaining that business has softened.

2022 Sales Metrics

Comparing the average sale and close rate numbers for our retail clients in 2021 vs. 2022, we found that these two metrics remained similar for many businesses. That leaves traffic decreases as the sole culprit for sales declines. Smart retailers we work with have decided to try to address this issue in a number of ways.

Seven Sources of Retail Traffic

The rest of this article will present seven sources of retail traffic along with methods by which this traffic can be maximized. Retailers who implement these methods will achieve greater sales in the coming months.

One of these traffic sources is uncontrollable, two are semi-controllable and the remaining four are pillars of traffic that can be managed to get positive results over shorter time frames.

The Uncontrollable Source: The uncontrollable source of traffic is the economy. Most retailers are hostages to external factors within their regional economies. During economic upswings everyone looks like a great business operator. It’s the downturns that separate truly great operators from all the rest. Great retailers focus more on what they can control rather than what they cannot in any economic cycle.

Two Semi-controllable Sources: Retail locations and operating hours are additional sources of traffic. Hours of operation can be extended to capture more business. If you cut your hours during COVID, extend them to pre-COVID levels. Location is, of course, hard to control in the short term. If you are considering opening a new location or relocating an existing store, search for the best possible location and budget for recessionary traffic levels to ensure profitability.

Four Controllable Sources: The following four controllable customer traffic sources are major levers retailers can use to increase sales in the coming months. The stronger each of these pillars, the greater your sales will be in any economy.

  1. The first pillar of traffic generation is advertising. Retailers typically send the same ad campaign to a broad audience using a mix of TV commercials, direct mail/print, radio spots, email broadcasts, mass texts and websites with popup CTAs (calls-to-action). Messaging may be promotional or branding type. Either way, mass communication advertising is the most expensive of the four controllable sources, usually 5 to 10% of total sales. In slow traffic times, it may be higher if you need to stick to a fixed marketing budget.

    When traffic trends down, most retailers are inclined to use mass promotional campaigns. The logic is that these campaigns can ‘buy’ traffic. If that were always true, the solution would be simple, and no businesses would ever experience a sales slump. Keep in mind that there are diminishing returns on using the same ad messaging over and over again. That’s why every retailer should look for better ways to manage and improve mass communication advertising and mix. Here are a few ideas:

    Track it! Track metrics that lead to results. Over 100 years ago, the retailer John Wanamaker famously said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” That is an excuse that competent retailers can no longer use. If you don’t know if it works, drop it or devise a method to track it. Tracking methods for traditional campaigns may include QR codes on print material, text codes on TV or radio commercials and measuring digital traffic after a non-digital campaign. Email and SMS broadcast campaigns are more easily measured by open and click rates.

    Switch it up. If your advertising is not producing the desired traffic, try something different in terms of message or media. Depending on your budget, some choices may not be attractive. For example, if your budget is too small for effective broadcast television advertising penetration in your area, find a more targeted approach. Or, if you compete head-on with a much larger competitor, using the same messaging and media choices, that may not be the best use of funds.

    Be creatively promotional. Give people a reason to visit you, make it fun and celebrate something. Retailers typically run promotions over standard holiday weekends. When every retail business in your trading area has a holiday promotion, your message can get drowned out by all the noise. Consider promoting at non-traditional times like over Easter, Cinco de Mayo or around the Superbowl.

    Use an ad agency. There are a number of industry-specific marketing agencies that have the experience, creative talent and the ability to track important metrics. If you find the right fit, these businesses can help you stay on task, free up management time and get better results.

  2. “There are four controllable customer traffic sources that can act as pillars to strengthen the foundation upon which you can improve sales.”
  3. The second pillar of traffic is salespeople. This traffic consists of past customers or prospects who are re-engaged by sales associates. Also referred to as follow up or prospecting, this second pillar can be a significant source of return customers and be-backs. Over the past two years, many retailers did not need to focus on this pillar. Even before the pandemic, only true professional salespeople consistently used prospecting and follow-up tactics to generate leads. The best writers in our industry produce over $2 million per year, while the upside for an average writer is around $800,000. Since both top and average writers usually work similar hours, the difference is how they conduct themselves. Here are some examples of how true sales professionals generate traffic:

    • They follow up with customers who did not buy.
    • They provide consistent updates on open orders.
    • They follow up before and after delivery.
    • For prospects who do not buy on the first visit, they get customer information for follow-up. This information is more than just a name, phone and email. It includes the details of the prospect’s situation.
    • They touch base with past customers.
    • They follow up on quotes.
    • They notify past customers and hot prospects of upcoming events and advertisements. When the business has a promotion, most potential customers never know. They don’t see it on TV, look at a mailer, or read the e-blast. However, if the customer gets notified by their salesperson or designer, they may come in if they are still in the market to buy.
    • They post on digital channels.

     

    The challenge with getting significant salesperson-generated traffic is that salespeople usually won’t follow up to the fullest extent, even if a manager asks them. Another issue is that some sales managers are so fearful of losing their salespeople that they accept a poor level of prospecting. If you want to build more traffic from this source, more management effort has to be invested in the following areas:

    • Tracking all completed follow ups.
    • Tracking the sales effectiveness ratio: (Close rate + traffic with proper follow up) / total traffic. This should be at least 60% for most businesses.
    • Set and require standards for follow-up, prospecting, be-backs and digital postings. Mandate that these standards are followed, especially for non-top writers.
    • Discuss these points with your sales team every day so the message sinks in.

     

  4. The third pillar of traffic is CRM. CRM (Customer Relationship Management) is technology and workflows that enable targeted, tracked and automated communication with prospects, current and past customers across all digital and physical touchpoints. A CRM is not a POS, ERP or an inventory and accounting software system. It is a web-based system that specializes in customer and prospect communication that exists alongside your POS system. Outside the industry, CRMs are common. However, in the furniture business they currently exist primarily in larger or more innovative businesses. Here are some examples of how CRMs can generate traffic:

    • They can automate communications.
    • They can be set to send specific and relevant messages from salespeople to their customers. Examples are: thank you messages, quote follow-up, order follow-up, delivery notification, past purchase follow-up, and loyalty programs.
    • They enable appointment scheduling for hot leads.
    • They are connected to the website, allowing leads from digital visitors to be captured. This can be done via chat, CTAs (calls-to-action), contact forms, surveys, service ticketing, contest entry, and item inquiries to name a few.
    • They measure the full customer journey from a digital lead to an in-store visit, through delivery, service, and beyond.

     

    There are many benefits to installing a CRM system, however, implementing a CRM must be treated with the respect it deserves. Similar to a POS system, it is not an app that can be downloaded and will just work by itself. This innovation requires commitment and support at the very top level of the organization, and a committed and organized project manager. With these two you will win, without them, you will lose.

  5. The fourth pillar of traffic is networking. Networking involves creating partnerships and mutual agreements with people and organizations in your business region. Those companies that execute these programs properly and continually work on sustaining relationships generate additional traffic. Examples include:

    • Builder programs.
    • Realtor incentives.
    • Charity organizations.
    • Chamber events.
    • Store use for partner events.
    • Interior designer relationships.

     

Conclusion

Of the seven previously described traffic sources, focus on the four controllable traffic pillars with necessary effort and leadership. Make sure your team is onboard, ensure that project managers in your organization have their marching orders, and find committed partners to assist in your growth.


 

 About David McMahon: David McMahon is founder of PerformNOW Inc.  PerformNOW has three main products that help home furnishings businesses improve and innovate: Performance Groups (Owners, Sales managers, Operations), PerformNOW CXM (Customer eXperience Management systems and processes), Furniture business consulting.  Your can reach David at david@performnow.com.