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Are your staffers sharers or sharks?
By Michelle Graff
December 04, 2008
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| National Jeweler Holiday Countdown Series, Selling |
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Royersford, Pa.--Is it better to reward the salesperson who scores a tough sale during the holiday season, or should the whole team get a bonus when 4Q sales rise overall?
It's a question many retail jewelers grapple with each year when handing out holiday spiffs. Some retailers seek to avoid competition that may lead to infighting among staff, and instead opt to reward the team as a whole when the store performs well. Others say individual selling incentives are a greater motivator, especially when it comes to moving older merchandise.
At Calhoun Jewelers in Royersford, Pa., owner Cathy Calhoun just launched a new sales incentive designed to move bigger diamonds out the door: Any sales associate who sells a pair of 2-carat or larger diamond stud earrings receives $500.
"They are showing them like there is no tomorrow," Calhoun says.
Around the holidays, Calhoun also breaks out star stickers, schoolteacher style, to mark pieces of slow-moving inventory that she wants to see sold quickly. A $500 reward goes to any employee who sells a starred piece.
"It encourages them to start showing, showing, showing," she says. "They fall in love with the piece again."
And that $500 amount seems to be the sweet spot for motivating staff to make sales. Calhoun says she used to offer $100 bonuses, but merchandise seems to move faster now that the reward is higher. "They are working it for $500," she says.
To stave off any unfriendly competition, Calhoun has made it clear to staffers that if there is arguing over a sale, there will be no more spiffs. The staff, who work well together, understand the rules, she says.
"I keep an eye on that," Calhoun says. "They seem to be OK with it."
Like Calhoun, Jerry Gause of Gause and Son Jewelers, with two stores in Ocala, Fla., and one in Gainesville, Fla., offers rewards ranging from $20 to $500 for the sale of specific items during the months of November and December.
The tenure of the target items varies.
"It doesn't have to be old and staid merchandise," he says. "It can be something new."
Gause says the individual rewards do not cause riffs among employees.
"That's one problem we don't have a lot of at all," he says. "We've got a good group of people."
Team strategy
While Calhoun and Gause swear by individual selling incentives, Jeff Guenther, general manager at Springer's Jewelers, with stores in Portland and Bath, Maine, and Portsmouth, N.H., rewards all employees as a team if the company meets its goals.
This prevents competition among sales associates in the same store, as well as rivalry among stores, he says.
When a retailer operates more than one store, one danger of individual spiffs is that employees might be tempted to hold onto inventory so that they can earn a spiff from it, instead of sending it to another store to help that store make the sale, Guenther says.
"When you have a team goal, the salesperson in one store is happy to see the salesperson in another sell it because it could contribute to [both of] them getting a bonus," he says. "We feel that the team goal creates teamwork. We all work hard, whether you're a salesperson, office person, you work in inventory control or work in the repair shop."
When it comes to vendor spiffs, Calhoun says she allows employees to take advantage of the Hearts On Fire program. Guenther's employees take advantage of 10 to 12 vendor spiff programs, with Roberto Coin, TAG Heuer and Overseas Diamonds among the programs that have been especially successful in his store.
At Higashi Pearls and Fine Jewelry in Lemoyne, Pa., owner Susan Fotos allows employees to cash in on vendor spiffs from companies such as Di Modolo, Raymond Weil, Judith Ripka and Rebecca
"They like that, and they like these products anyway," Fotos says. "There's a lot of fun competition."
However, she opts not to use any individual selling incentives directly tied to the holidays. In fact, she avoids individual sales commissions as a whole and, instead, gives out bonuses based on the store's overall performance for the year.
Fotos says customers can sense when there's competition among salespeople and they are turned off by it.
"I don't know how to do it so people don't become competitive, but work as a team," she says.
One bonus that she does offer employees is a weekend trip to New York, normally the first week of December.
The all-expenses-paid journey that has staffers touring around Manhattan amid the glow of Christmas lights and decked-out store windows puts the team in the holiday spirit in time for the season.
Fotos also keeps morale up by hiring two to three extra people for the holidays so her regular employees aren't overworked.
"What they love most is being able to have a good schedule," Fotos says. "Everybody gets too worn out. It's too hard, and then they hate Christmas."
Hiring extra help is a tradition she intends to keep up this year, despite the not-so-jolly holiday outlook.
"I'd rather be prepared," Fotos says. "I feel like I've done everything really right this year. Everything I can control, I have. I'm trying not to panic."
Overall, experts predict that given the current economic climate, holiday hiring will be down across the board in the retail sector this holiday season.
A survey by Milwaukee, Wisc.-based employment services company Manpower showed that of the 14,000 employers surveyed, 59 percent had no plans to increase staffing levels during the October-December period, while 22 percent planned to increase staff levels, and 13 percent actually expected to reduce payrolls.
But, among those jewelers interviewed by National Jeweler who regularly bring on extra staff during the Christmas selling season, none had definite plans to change their holiday hiring habits.
As Gause, of Gause and Son Jewelers, points out, it will be a challenging Christmas, but people will still buy.
"I do believe they haven't ruled out Christmas for anybody," he says.
Is your staff stoked for the holidays?
Here's how to give your staff extra incentive to hustle during the holiday rush:
-- Know your staff. Would an individual reward system inspire soloists to shine or would it lead to bad behavior at the showcase? If the latter is true, a team-selling incentive is the better bet.
-- Get employees in the holiday spirit. A quick but fun trip or motivating meeting just before the holidays can put employees in the mood to sell.
-- Consider incentives for the sale of individual items. It's a good way to get older merchandise moving, or to sell pieces that can bring in big margins.
-- Look into vendor spiffs. Many vendors seeking to boost their own sales help you do the same with merchandise-moving incentives during the holiday season.
-- Keep spirits bright. Customers can sense the mood in the store; remain optimistic and upbeat this holiday season.
Editor's note: This story first appeared in the November 2008 print edition of National Jeweler.
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