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Ask INSTORE: August 2007



Recognizing buying signals, references for poor employees, and getting a new manager off on the right foot.

[h3]Study the Signals of a Buyer[/h3]

[dropcap cap=Q.][h4][b]How do I recognize buying signals?[/b][/h4][/dropcap]

[dropcap cap=A.]This is one of the hardest parts of being a salesperson. As much art as skill, it requires you foremost to listen, even as you get into the full swing of your presentation. Sales guru Jeffrey Gitomer says the basic rule of thumb is that any question asked by the customer should be considered a buying signal, especially if they mention money or credit. These are some of the most important queries to be on the lookout for:[/dropcap]

• Wanting something repeated. “What was it you said about that.”  
• Scare stories or statements about bad experiences with previous purchases. “I heard there are a lot of CZs being passed off as diamonds.”  
• Questions about quality or guarantees. “How long does the money-back guarantee last?”  
• Questions about qualifications or service. “So, what is a GG exactly? … “If I have any problems can I reach you on the phone?”  
• Asking about other customers. “Are many people buying this style?”  
• Buying noises. “I didn’t know that.”… “Oh really.”  
• Chicken questions. “Suppose I buy it and it and she’s not happy with it?” … “Suppose I buy it and it’s not the right size?”

[componentheading]MARKET RESEARCH[/componentheading]


[h4][b]I’m thinking of opening a store in what’s possibly the most crowded market in the country; there are over 50 jewelry retailers here in a college town of 400,000. I feel I know this market but should I look elsewhere?[/b][/h4]

A crowded marketplace isn’t necessarily a bad sign; conversely, it may be an indicator of the huge demand for a product or service. The secret to business success isn’t finding an empty field, it’s filling a need, and that generally means a niche.

Sometimes niches are created because everyone is chasing the big-ticket-buying crowd or the youth market or there are changes in fashion or technology that the existing players may have missed. The real question is whether you can do something better or differently. “Just don’t think you can do it by being the cheapest,” says marketing expert Brad Sugars. “You’re the little guy; you don’t have economies of scale. The big guys can make up in volume what they lack in margin. You can’t.”  


[h4][b]We let an unsatisfactory employee go last year. Now a prospective employer wants a reference. What can I say without getting sued?[/b][/h4]

Employers get in trouble when they blurt out things they believed to be true – the staff member kept calling in sick when they weren’t, they deliberately shirked work, they were stealing … but then can’t back up in court.


The twin guiding pieces of advice on this issue are: Keep it brief and stick to the facts. Some employers, if they can’t give a glowing reference, provide nothing more than dates of employment, job title, and final salary. You may live in a state that provides “good faith” protection to employers but stick to the facts anyway. Don’t speculate on your former employee’s bad qualities, or the reasons for his or her failure to perform. Limit your comments to accurate, easily documented information. Finally, don’t lie or sugar coat things.

If you fired a bad egg for something like violent conduct or sexual harassment and then don’t disclose that when asked, you risk being sued again – this time by the employer if it happens again. As with many such issues, the best approach is the pre-emptive one: Warn a leaving employee you will not be able to provide a positive reference. It’s also a good idea to designate one person in your store to handle all references, and keep a record of every reference request and response. You may want to adopt a policy of providing references only in writing, so you’ll have proof of exactly what was said.


[h4][b]Should my kids go on the books?[/b][/h4]

They have to actually work, such as sweeping the floors or modeling for your catalogs, but they can earn up to $3,300 without paying federal income tax. You’ll have to cover payroll taxes of about 20 percent, notes tax expert Eva Rosenberg. But you’ll still come out ahead if your business falls into, say, the 35-percent tax bracket, she notes.



[h4][b]I’m about to appoint a manager. What’s the best way of preparing her for the challenges she’ll face?[/b][/h4]

Be sure to give her “The Talk” – the one about how it will be hard to maintain close friendships with her former peers and that while you don’t prohibit fraternizing (at least we hope you don’t) you do recommend she maintain some professional distance from the rest of the staff. Let her know your door is always open to discuss issues because there will be times she’ll need someone to talk to. Kate Peterson’s Real Deal columns (the full archive is available at in the “Community” section) are a great resource to show her the kinds of situations that she is likely to face. Another is George Fuller’s The First-Time Supervisor’s Survival Guide.

[span class=note]This story is from the August 2007 edition of INSTORE[/span]

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