Tune in to what your staff wants to hear.

[dropcap cap=I]bet your sale staff listens to WIIFM in their cars going to work every morning. [/dropcap]

There they are, rockin’ in their cars. You pull up to the light next to your best sales associate and see him singing along!

What’s WIIFM, you ask? Surprised you never heard of it. WIIFM stands for What’s In It For Me?”

Sales staff respond to rewards. Many jewelers think rewards (a.k.a. commission) brings out hostility in people. You’d be surprised how many people who help you in life are on commission and you don’t even know it. They are trained that way.

I recently conversed with a jeweler who paid what he thought were good wages and benefits and treated this staff member “like family.” Need to go home early? No problem? Need to go to kid’s recital? Of course! We’re family. But you can’t “spend” family at the grocery store.

MY QUESTION WAS: “Does the associate have any way of earning extra money?”

JEWELER: “Yes, we give bonuses.”

ME: “If I work for you, how much of a bonus can I earn?”

JEWELER: “You don’t earn them; it’s based upon how well I think you’ve done this year.”

ME: “That’s not an incentive plan, that’s a gift.”

One store I visited had a low closing ratio. We moved old merchandise into a sale case to get rid of it. I asked the staff if they got compensated to sell the older items. The answer: “No, just the regular commission.”

Sales staff need an incentive to do something they don’t want to do. Selling old, outdated merchandise is no fun. I usually like to increase the commission in selling old merchandise. But the sales manager told me he likes spot cash better, and it worked to move old merchandise in the past. So we came up with this one spiff plan to sell from the old case:

[li] Sell anything in the case, up to $300 and that night we will pay you in cash $25.[/li]

[li] Sell anything in the case, from $301 to $500 and that night we will pay you in cash $40.[/li]

[li] Sell anything in the case, above $501 and we will pay you in cash $50.[/li]

People like to get rewards instantly; they don’t want to wait until the end of the quarter.

This store pays a good commission rate and also has monthly goals for the staff.

ME: “Does the staff get anything extra if they sell more than their goal?”

JEWELER: “No.”

So we immediately instituted this addition to their plan: Exceed the sales goal by 20 percent, and the commission increases by 20 percent.

Here’s how it looks: Let’s say they are paid an hourly wage plus 5 percent commission. If the sales goal for the month is $20,000, a 5 percent commission pays $1,000. If they exceed the goal by 20 percent (they sell $24,000) we’ll increase the commission rate from 5 percent to 6 percent (that’s a 20 percent increase). So the commission on the $24,000 in sales would be at 6 percent, or $1,440. At 5 percent it would have been $1,200. That’s an extra $120 for doing better than expected.

For an extra $120 you got an extra $4,000 in sales. Win/Win.

I’m betting as a jewelry store owner you also listen to WIIFM! i

David Geller is a consultant to jewelry-store owners on store management and profitability. E-mail him at dgeller@bellsouth.net.

[span class=note]This story is from the February 2011 edition of INSTORE[/span]