Ask employers in China if sales associate turnover negatively affects their business, and 88.6 percent say yes. Ask luxury retailers, and the number climbs toward 100 percent.
Retention of high-performing sales associates is high-end brick-and-mortar’s biggest challenge.
Over the past decade, I’ve trained and coached thousands of retail managers and sales associates in China. I’ve seen the churn up close. I believe retention is a managerial issue:
- managers model the way they were managed,
- positional power no longer means what it once did,
- sales associates from one-child families expect more interaction and direction,
- managers blame Millennial behavior and generational attitudes, and
- sales teams are often too large for one manager to be effective.
Studies show that higher pay doesn’t solve the problem. Retention is really a measure of how much managers communicate care and provide individualized reinforcement to the sales associate. It requires redefining the job in terms of relationship and service.
Your Customers Aren’t Your Only Customers
What happens when we treat sales associates like valued customers? Their behavior reflects it. If you want engaged, happy clients who love coming into your store, you need engaged, happy employees who love working there. Obvious, right? Yet this is not on the radar of many managers. They manage as they were managed, through positional power, not realizing that the dynamic has changed to one of personal power.
Consider the parallel: a sales associate’s position no longer ensures influence with customers (the sales associate must show value by helping customers find things they can’t find for themselves). Likewise, managers who believe their power is positional instead of personal will never develop relationships with the members of their sales teams. In the absence of a relationship, sales associates will jump ship.
In customer relationships, I stress three key factors: authenticity, personalization, and relevance—all essential in retaining today’s sales associates. Luxury sales associates take 6-12 months to translate training into success, so retention goes straight to ROI—but without authentic relationships with managers, they’re unlikely to last that long.
First, What Doesn’t Work?
I’ve observed four managerial behaviors that frustrate sales teams and cause high turnover:
When sales associates feel ignored, they ignore their jobs. That can happen on big sales teams, which are common in China, or small. Remember, nearly every Chinese worker is an only child. They were brought up to expect personal attention from anyone in authority. One sales associate at a Shanghai luxury told me, “My boss doesn’t even know my birthday!”
The same Shanghai sales associate said, “My boss only tells me what I’m doing wrong, and has never once told me I did something right.” Many managers feel their job is to correct employee mistakes. Allow me to correct this managerial mistake. Constant criticism makes for sullen, unengaged workers. Sales associates treat the customer in much the same way that they are treated by management. What kind of customer relationships do you want? Recognize even the small positives, giving reasons for why they were done well and citing their impact. This will provide the motivation sales associates need to be expressive and engaged with today’s luxury customers.
- Lack of Empathy
Empathy is an amplifier for active listening. You would never tune out a customer expressing a need or sharing a story. Be curious about your people. Again, employees from one-child families are used to focused attention. Empathetic listening can reveal the Sales Associate’s unique motivations. This in turn models how their own empathy can draw out what luxury customers want.
This plays out as both a lack of personalized feedback or recognition and a tendency to blame Millennial attitudes (“entitled” or “unmotivated”) for declining sales. Managers must own their role and understand what matters most to each individual employee. While some sales associates respond to better pay, some simply want to excel, to be number one. Others love being brand ambassadors, or part of a great team. The manager’s job is not to motivate—it’s to inspire, at this personal level. Sales associates have to motivate themselves.
Where Does Inspiration Come From?
The bad news is, you can’t just raise sales associate pay and get inspired results. That’s also good news. What works doesn’t directly involve pay increases. Instead, it involves helping managers make the transition from positional power to personal power. This requires a change in mindset and the acquisition of 21st century managerial skills, including ways to manage with meaning, control and appreciation.
Martin Shanker is the President of sales consultancy Shanker Inc, which has worked with Ralph Lauren, Burberry, Cartier, Lane Crawford, Estée Lauder, Van Cleef & Arpels, Piaget, Yves Saint-Laurent, and many other luxury brands.