©2013 Liz Kislik Associates LLC Increasing Average Order Value April 2013 Operations Summit Liz Kislik, President, Liz Kislik Associates.

©2013 Liz Kislik Associates LLC ©2013 Liz Kislik Associates LLC ©2013 Liz Kislik Associates LLC

Increasing Average Order Value

April 2013

Operations Summit

Liz Kislik, President, Liz Kislik Associates

©2013 Liz Kislik Associates LLC 222 ©2013 Liz Kislik Associates LLC ©2013 Liz Kislik Associates LLC

What We’ll Cover Today

• Customers relationship and expectations

• What and how to offer

• How to work with reps

• Management, measurement, motivation

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It’s Harder Than It Used to Be

Decision makers are over-trained

Only testing will tell you

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The more you ask from your customers,

the greater your obligation to understand them.

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The Role of Impulse

Consumers do pre-call planning

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Customers Can’t Stand Being…

• Pushed

• Slicked

• Taken for granted

• Treated mechanically

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Understanding “No”

When does it occur in the call?

What is it a response to?

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Make Each Customer Special

• Customer history counts

• Phone only vs. multichannel

• Clear value proposition

• Clear service positioning

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Confirm Brand Image and Value

• Sell what you sell

• Reps must be credible

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Preparing Offers

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Picking Product

• Easy to picture and describe

• Low rate of return

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General Appeal vs. Customized Choices• Enhances value of

base product

• Hard to find

• Related to order or customer

• “Collaborative filtering”

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Price Points

• Consider 1/3 of order total or item

• Not higher than highest single line

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To Discount or Not to Discount

• Avoid “training” customers

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Discount Rationales

• Discount eligibility• Order size• Purchase history

• Our mistake; your benefit• Overstocks and liquidations• Manufacturing/purchasing efficiency

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Shipping & Handling

• Barrier to purchase

• Seems like manipulation

• Make S&H the “special”

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Offer Structures That Work

• Permission, not Product

• Product A vs. B

• Diminishing Value

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Getting Your Reps on Board

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It’s Ok to Sell AND

100% Offering is Fiction

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Reasons Not to Offer

• Product?

• Customer history?

• Customer circumstance?

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When to Call it Quits

• Not until “No”

• Maximum of two

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Helping Customers “See”

• Bring customers to the page or screen

• Put people in the picture

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Coaching after Observation

• Individual

• Concrete

• Include language practice

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The Supervisor’s Role(s)

• Trainer?

• Sales Coach?

• Enforcer?

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Training Tips

• Group by skill or tenure

• Have the product present

• Practice language

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Management, Measurement,

and Pay

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Typical Organizational Structures• Ops in charge;

Merchants supply produce

• Merchants in charge; Ops implements

• Sales/Marketing in charge

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Systems Requirements for Reps

• Offer prompts

• Flags for “no offer”

• Detailed product info

• Subtotals

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Components of Metrics and Tracking

Offers

Orders

Items

Dollars

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Reporting Rates and Trends

Conversion

Returns

By subgroup

0

1

2

3

4

5

6

Series 1Series 2Series 3

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Setting Achievable Targets

• Reality testing

• Raise the bar over time

• Quantity plus quality

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Paying for Performance

• Variable comp complicates life

• Set baseline first

• Choose incentive targets carefully

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Pay that Motivates

• Is easy to calculate

• Has rhythm and pace

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Things to Watch

• Stockouts

• Skipping offers during high volume periods

• Gaming the system

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Successful selling and

lifetime value rely on

good relationships

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Email: [email protected]

Twitter: @LizKislik

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Phone: 516.568.2932