In retail, it’s easy to fall into the trap of working harder, not smarter. In the second of his series exploring the fundamentals of independent furniture retail, sales and operations consultant Ben Wain, the founder of Wain Consultancy & Coaching, suggests a review of pricing strategy and product worth as the year end nears …
I love hearing the till ring. I love seeing a salesperson land a great order and celebrating with a team that has delivered a strong day.
Now, I’m certainly no sales prevention officer. But over the years, I’ve learned to ask a question before getting too carried away – what actually made it a great day? Was it the footfall, the number of orders, or the £10,000 sale everyone is talking about? And what did the business actually earn from all that activity, and where is the next opportunity?
Last month, I wrote about getting ready for peak trading. As we move into October, that preparation needs to include understanding what all the extra effort will return. A busy showroom is encouraging, but it’s the money left after fulfilling those orders and covering the costs that pays for the business’ future.
I’ve seen campaigns built around eye-catching entry-price products generate plenty of excitement. A £299 sofa can get customers through the door, and promotional products absolutely have their place. They can offer genuine value and introduce people to a retailer they might otherwise never have visited.
The problem comes when attracting customers becomes the entire strategy. You sell more of the advertised model than expected, AOV drops and the delivery diary fills up. There are more orders to process, more products to handle and more enquiries to answer. Everyone is working harder, but there may be very little extra money left for the business. That’s how we become busy fools.
The existing overheads still need covering, and extra activity can bring extra costs. A lower-priced sofa doesn’t necessarily take less time to sell, handle or deliver. When reviewing a campaign, I want to understand footfall, conversion, order numbers and AOV. Is the marketing bringing people in? Are we converting them? What are they spending? Those figures need to sit alongside gross profit, because growing the order value doesn’t automatically mean we’re making more money.
I’ve had excited salespeople bring me enquiries for sofa groups originally priced above £10,000. The customer has found a substantially cheaper offer elsewhere and wants us to match it.
Even after a heavy discount, the order still looks impressive, until you work through what remains. Once VAT is accounted for correctly, what gross profit is left after the product cost? How much will then be absorbed by selling, delivery and potential aftercare?
Sometimes you’re left wondering whether you’re running a retail business or simply collecting money to pass to the supplier. It’s easy to become romantic about a big sale. I often describe it in coaching as ‘vanity over sanity’.
That commercial responsibility belongs with the leadership team. Personally, I don’t believe salespeople should be targeted on product margin. I want their advice guided by what suits the customer, without a personal financial incentive pushing them towards whichever product pays best. Buyers, merchandisers and managers should support them with good buying terms, sensible pricing, considered promotions and clear boundaries around discounting. Give the sales team an offer they can confidently stand behind, then train them to sell it well.
I remember campaigns where sales were good, but AOV started below expectations. A few focused sessions mid-way through helped the team recognise opportunities they were missing, turning a good sales event into a hugely profitable one.
There’s a big difference between the two. Sometimes it was a matching footstool, a rug that completed the room, or another relevant addition the customer hadn’t considered.
We weren’t asking them to load orders with things people didn’t need. We were helping them have a more complete conversation. Someone arriving for the advertised sofa may find it the perfect product. Equally, a strong conversation might reveal that another model offers the size, comfort or appearance they really want. Explain the choices, respect their budget and let them decide.
Holding a price also requires confidence in the business behind it. When I bought my last car, I chose an authorised ‘approved’ dealership despite seeing a similar car advertised elsewhere for roughly £3,500 less. I felt more confident buying from the dealership versus the unknown back street garage. I knew where I could go if something went wrong, and that reassurance mattered enough for me to pay more. If price had been my only consideration, I would have bought elsewhere.
Furniture customers can make the same judgement. Your trading history, customer reviews, knowledgeable people, showroom standards and delivery service all help explain why somebody should choose you.
Those strengths need to be real and consistently delivered, but they also need explaining. We can be so familiar with our own business that we forget that a new customer might know very little about it. Does your sales team actually talk about the service behind the purchase, or do they go straight to discussing the discount?
Some of the best salespeople I’ve worked with could explain a modest reduction confidently, justify the price, and retain the customer’s goodwill. They didn’t automatically open the retailer’s wallet whenever somebody asked for more.
For October, that is where I would invest time – objection handling and confidence in the product, the offer and the organisation. Can your team explain why they are proud to work for you and why a customer should buy from you?
I’d also review which products still have confirmed pre-Christmas availability. For a customer who needs a dining table for Christmas Day, dependable delivery has real value. That product may not need your deepest discount to make it compelling. Be clear about availability and only make promises you can fulfil.
There are other ways to create excitement too, whether through a new range, an attractive package or keen pricing supported by excellent buying. Another price reduction shouldn’t be the only idea on the table.
You cannot simply put your prices up and expect customers to pay. You have to earn their choice through the whole experience, from the first impression of your showroom to the way you handle a problem after delivery. Be proud of your business, be confident in your offer and understand what you keep from every sale. Then give customers the very best reasons to choose you over anyone else – the lowest price doesn’t have to be one of them.
