Lack of Brand Engagement Costing Sales
Economic influencers and share of wallet prompt businesses to ask “am I being sold?”
Study by Grass Roots Group indicates annual loss of over Rs.84 lac per store to IT & Consumer Electronic majors due to poor sales effectiveness
Press Release For Immediate Release
NEW DELHI, October .., 2009: IT & consumer electronic majors in India are losing upto Rs.84 lac per store annually due to poor sales effectiveness. According to a survey conducted across Asia Pacific by performance improvement solutions provider Grass Roots Group, a capability gap in establishing customer needs and closing the sale by frontline sales staff at the retail outlets is primarily responsible for this loss.
The ‘Are You Being Sold?' survey focused on 14 multinational brands in the IT hardware and software as well as consumer electronic space. The research was conducted in reseller outlets of these brands across seven countries - India, China, Singapore, Thailand, South Korea, Indonesia and Australia - with the help of 1400 mystery shoppers and the performance of the sales staff was judged on the basis of the complete shopping experience, including a salesperson’s response time, product knowledge and attempts to close a sale.
India’s robust retail culture strongly plays out when measured on the ability to greet the customer. Salespeople have scored a higher than average rating in terms of the proportion of customers being served immediately. Also, the product knowledge of Indian sales staff at 81% was on par with the rest of the region. However, and surprisingly, given this statistic, they were significantly less likely to recommend a brand. Talking about India’s performance, Mr. Stephen Hibberd (Regional Director – Asia, Grass Roots Group) explains, “Through this survey, we wanted to understand if leading hardware and software giants were being well represented by their channel partners and how effectively they were being sold. India’s excellent scores in categories like product knowledge indicate that although the salespeople have the technical know-how about the product, they are simply not feeling engaged enough with the brand to support their products or make recommendations.”
Furthermore, although 95% of Indian salespeople listened carefully to the customer, they negated this by scoring only 41% in establishing customer needs by asking the right questions such as the budget and intended use of the product. India has also scored significantly below the regional average in terms of first impression, closing the deal and sales effectiveness. The assigned brand’s presence in multi-brand outlets in India by way of signage, demonstration models and clothing were well below the regional average. The knowledge of Indian sales staff about after sales product support was also among the poorest in the entire region and merely 39% used that knowledge as a selling point. Moreover, in 80% of the cases the shopper was not offered any additional product such as a mouse or software to go with his notebook computer. These statistics are sure to have alarming implications for those industries which depend on channel partners such as distributors, resellers, franchisees or third party intermediaries for sales.
A surprising observation in the Study is the attitude of Indian customers; 51% of whom rated the salespeople as ‘excellent’ or ‘good’ for establishing customer needs. This rating was given by the shoppers even when more than half of the sales staff failed to ask the right questions to gauge the customer’s requirements. Also, 40% of the shoppers have rated the overall sales effectiveness at the assigned store as ‘excellent’ or ‘good’ despite the poor performance of the sales staff in most of the categories. This clearly shows the low expectation level of the customers in India with regards to the service rendered at the retail outlets. Therefore, a little extra push by the brands along with an additional effort by the retailers and salesmen to improve customer relations and engagement would do wonders for the business as well as for the industry at large.
In the survey, Australia and China emerge out as leaders in most of the categories with Thailand not far behind. China fared particularly well in terms of establishing needs and having scored 100% for brand recommendation it is clearly the regional topper in the category. This brand preference of the Chinese salespeople proved to be difficult to shift when the surveyors introduced their assigned brands. India is among the poorest performers in terms of preferred brand suggestions given by the salespeople which is not good news for an industry in which approximately 30% of the sales are made due to reseller recommendation. Moreover, most of the countries seem to have fared badly when it came to the effectiveness of the salesperson to ask for the sale. Over 50% of those surveyed across the region said they were not even asked if they wished to purchase the product.
“That one result, in itself, surprised us and supported what we have long suspected, that brands need to be effectively having a personal relationship with their channel in order to motivate, engage and equip the frontline sales team to successful advocate their products. Brands should not simply use reseller rebates or marketing fund contributions to generate top of mind activity by salespeople. Instead, both brands and retailer principals need to consider a broader range of solution based activities to drive stronger results and ultimately, more profitable business.” says Stephen Hibberd.
He added, “The competition for the share of the consumer’s wallet is fierce, particularly a pressure on exports means that the domestic customer really is the king for these brands. Having spent hundreds of millions of dollars on R&D, manufacturing, distributing and advertising a product, no brand can afford to let the customer walk out of the store without buying the product merely due to a poor retail environment. Therefore, there is substantial opportunity for the brands we surveyed to infiltrate and engage their resellers to alter their performance behaviours and selling preferences and we will be discussing with them directly, strategies and solutions to tackle this issue.”
Hibberd’s recommendation to business, both manufacturers, through their channel and retailers, is to adopt a solution which addresses a multiple of different needs, instead of a singularly focused strategy. “At Grass Roots, for example, we engage with our customers to identify a solution which effectively comes from a menu of different products and services. This can range from brand communication programmes which offer top of mind impact to the frontline, bespoke rewards platforms which addresses aspiration, through to incentives, both financial and experiential, which motivates, rewards and recognises exceptional performance within the channel and employee space,” Hibberd says.
About Grass Roots:
Grass Roots Group is world’s leading performance improvement solutions provider. It offers services to help companies achieve their business goals by more effectively engaging, equipping and motivating channel partners, customers and employees. The Group was established in 1980 in the United Kingdom. Since then, the continuous support and influence of its Chairman David Evans, MBE has led to phenomenal success of the organization. Today, Grass Roots employs more than 1,300 people across 16 countries, serves over 2,100 clients and generates an annual turnover of some US$ 530 million. In 2007, Grass Roots started operations in Asia Pacific and has since benefited from unprecedented growth with offices in key business markets of India, Singapore, Australia and China. In India, Grass Roots operates through its country headquarters in Mumbai as well as another office in Delhi. Its active client list in India includes Dell India, HDFC Bank, SBI Card, Clinique, ICICI Bank, Citibank and HSBC among others.
For more information, and to download the report, click here.