“Lack of Dedicated Luxury Retail spaces” at High-street & Malls is “Restricting Presence of Luxury Brands in India” | Retail in Asia

” The lack of dedicated Luxury Retail spaces, the High-street and Premium Malls is restricting the presence of luxury brands in India, a new study reveals”…

The study entitled, “Challenges highlighted by luxury retailers in India”, was jointly conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and KPMG.

One of the key findings of the study is that setting up stores in high streets affects luxury retailers’ profitability due to sky-rocketing rental costs. High streets are also very cluttered, crowded and are unsuitable due to the absence of the exclusive ambience that luxury retail demands.

The report noted that the Indian luxury market grew at a healthy rate of 30 % to reach USD 8.5 billion in 2013 and is likely to continue growing at a healthy pace of about 20 % reach USD 14 billion by 2016.

This is due to rising number of wealthy people, growing middle class, affluent young consumers and other related factors. However, India currently enjoys just 1 to 2 % share in the global luxury market though it is the fifth most attractive market for international retailers.

Fragmented and diversified consumer base in India is also another significant challenge being faced by luxury retailers in India as High net-worth individual (HNI) consumers are not easy to reach.

The ASSOCHAM-KPMG recommends luxury brands to strategically design their growth plans to tap demand across three categories of HNIs, namely – the inheritors (traditionally wealthy) who are habitual spenders; the professional elite who are discerning spenders; a large segment of business giants (entrepreneurs, owners of small and medium enterprises) who have the money but lack appreciation for fine luxury goods because of no prior exposure to such products.

“ There is a need for luxury brands to focus on expansion in the type and nature of products being offered and increasingly adopt innovative marketing plans to tap rapidly evolving consumer behavioral trends,” said D.S. Rawat, secretary general of ASSOCHAM in a statement during the official release of the study.

“Luxury is no longer a ‘status symbol’ but is now a lifestyle and the global brands need to fast evolve and learn ways to adapt within the local environment so that they can get accustomed to nuances of the market by understanding the cultural identity of Indian consumers,” he added.

Other challenges in luxury retail in the country include :

1. Lack of policy support for luxury brands – the study found that despite strong demand momentum, Indian luxury market has not been viewed as policies and regulations friendly for the luxury retailers. Import duties (20–150 percent), for one, are relatively higher and this is considered as a key apprehension factor among the international players, who may resist them to frame aggressive growth plans for India.

2. Clauses such as — 100 percent foreign direct investment (FDI) – in both single and multi-brand retail requires 30 percent of local sourcing, announced in the liberalized FDI policy in luxury retail in November 2013 could be difficult for the international luxury players to comply with,” the study noted.

Rawat said the duties are manifold, ranging from customs’ duty, counter veiling duty (CVD), special additional tax, and adding to the overall cost…

3. Lack of trained staff – the study cited that the shortage of skilled labour for the industry is a major cause of concern as it is difficult to make the local workforce understand the heritage and legacy of the brand along with the specific finishes involved in the manufacturing process.

“ In the absence of these requisite skill sets, brands have no option but to manufacture in their country of origin; lack of skilled workers can also be attributed to the sales function where presentation and interpersonal skills form an integral element for the business,” Rawat explained.

4. Growing prevalence of counterfeit luxury goods and a grey market – most of these products belong to segments such as apparel, perfumes and accessories, which are usually lower ticket items and can be easily placed in grey channels.

The study emphasized a collective, industry wide effort is likely to have a far-reaching impact in dealing with the issue – as seen in other industries such as films and music…

“ Corrective measures need to be taken to banish the growth of grey luxury goods’ market in India which results in sizeable revenue losses for firms,” said Rawat.

“A strong legal structure combined with effective framework of intellectual property protection would help prevent dilution of brand image and reduced consumer trust”…!!

“Worldwide Sports Events Market” : Today’s Global Sports Industry | A.T Kearney

“ The sports industry today spans the field of play—from the Food & Memorabilia stands at the stadium, to Media Rights and Sponsorships. The many participants in this market are competing for a bigger slice of a pie worth as much as €450 billion”.

Today’s global sports industry is worth between €350 billion and €450 billion ($480-$620 billion), according to a recent A.T. Kearney study of sports teams, leagues and federations. This includes infrastructure construction, sporting goods, licensed products and live sports events.

Live sports events in particular offer a compelling proposition to different industry participants—from free-to-air broadcasters seeking viewers and advertising revenues and pay-TV broadcasters looking for loyal subscribers, to sponsors moving away from traditional media, event organizers, athletes and spectators.

Our independent analysis, commissioned by Lagardère Unlimited, finds that the global sports industry is growing much faster than national gross domestic product (GDP) rates around the world. And the global sports value chain—its size, makeup and revenues—has significant growth prospects for the future.

The Sports Events Market :

The worldwide sports events market, defined as all ticketing, media and marketing revenues for major sports, was worth €45 billion ($64 billion) in 2009. Football (soccer) remains king: Global revenues for this sport equal €20 billion ($28 billion) yearly—almost as much as the combined €23 billion($32 billion) in revenues for all U.S. sports, Formula 1 racing, tennis&golf (see figure 1).

In Europe alone, Football is a €16 billion ($22 billion) business, with the five biggest leagues accounting for half of the market, and the top 20 teams comprising roughly one-quarter of the market. In general, the most popular sports, such as football and those based in the United States, are growing faster than tennis and golf. Rugby is emerging and has grown exponentially since becoming a professional sport in 1995 (see figure 2).

A country-by-country breakdown finds that the sports industry is growing faster than GDP both in fast-growing economies, such as the booming BRIC nations (Brazil, Russia, India and China), and in more mature markets in Europe and North America.

The economy of sports also reflects its cyclical nature. Many of the world’s premier sporting events occur every two to four years—the FIFA World Cup and Summer Olympics, for example, take place every four years. (Figure 3) shows that yearly sports revenues have grown steadily, yet how that money is spent changes every year. In 2008, for example, major events accounted for 8 percent of worldwide sports revenues thanks largely to the Beijing Olympics and UEFA Euro 2008 football tournament in Austria and Switzerland. In quieter years (2007, for example), major events make up barely 1 percent of worldwide sports revenues.

Properties – The properties managed by rights owners are the intangible assets that draw fans and money. They include a wide range of parties, including leagues (such as the Premier League), pro tours (golf’s PGA Tour), teams (the New York Yankees) and athletes (Roger Federer, Lionel Messi).

Rights management – Historically, monetization of properties was based on gate “take” (revenues) but now professional sports depend on media and marketing rights for more sources of revenues. Rights owners, or sports agencies acting on their behalf, not only structure the deals but also trade media and marketing rights.

Events – Effective rights management depends first on operating live events. An enjoyable experience for fans can create additional opportunities for revenue.

Content – The stadiums can only seat a certain number of fans, but packaging content for broadcasters’ and sponsors’ needs is a vital part of creating revenue in modern sports.

Structured around these “FOUR Pillars”, the Sports Value-Chain becomes a virtuous circle. Shaping a property can help increase its value through tailored rights management and content packaging can make it more attractive.

For example, when cricket organizers created “Twenty20” cricket in 2003, shortening the typical game from several days to a few hours, they shaped a format better suited to live broadcasting. This sports value chain applies similarly to the entertainment industry—including book publishing, music production and other live-event-based markets !!

Market Projections :

Going forward, the next sports cycle will likely bring somewhat reduced growth, from 6 percent per year down to 4 percent (see figure 5). What are the main projections to 2015 ??

Media rights revenues will plateau – In the wake of the economic downturn, media rights revenues will likely level off, as broadcasters face increased pressure to reduce programming costs. Negotiations are often based on bargaining power of only a few broadcasters (or in some cases just one), making outcomes difficult to predict, but conservatively we estimate overall media rights to remain stable. Because broadcasters acquire media rights in multi-year contracts, the full impact of the financial crisis may not be felt for a few years. For football, this plateau in media rights revenues likely translates to a growth slowdown from 8 percent to 4 percent per year.

Ticket sales and sponsorships will bounce back – Growth in ticket sales and sponsorships is typically tied to macroeconomic factors. A recovering economy should help bolster these areas again.

“Premium” content : Broadcasters’ battles will continue – Worldwide sports remain premium and exclusive content for broadcasters—attracting large audiences—but making money may prove elusive as consumption patterns change, the Internet proliferates and new players emerge. How will multi-screen media drive additional revenues for broadcasters? What new business models will be required to generate content on smart-phones and tablets? How to deal with the potential risks of content piracy in an increasingly digital world? What are the best strategies for traditional broadcasters facing competition from Internet-based platforms willing to acquire and distribute content? These and other issues will continue to challenge broadcasters through 2015.

Demand is growing, but supply won’t always keep up – Increasing the amount of exposure sports properties receive is appealing to sponsors, but team sports are usually limited by a finite number of teams and games (for example, 18 to 20 in football leagues, and 16 in the NFL). Even in individual sports such as golf and tennis, the calendar constrains how many public appearances athletes can make. Hence, even though demand is high, offers for sponsored platforms cannot match it, fueling a race for longer and more exclusive contracts. Sponsors will have to scrutinize their sports investments more effectively, a vital issue as the industry moves into the future.

The Business of Sports:

The wave of new stadiums around the globe, the growing size of television contracts and the continued proliferation of sports advertising portends an industry that continues to soar, even as the global economy climbs out of recession…

How to “Re-engage Old Clients”:”Client/Customer Retention”| by: Michael Piermont | ACE

Over the years, clients come and go from your Health-club / Personal Training business. Some may have thought personal training was just a short-term solution, while others didn’t see the results they wanted..

Either way, Re-engaging with old clients is important to running a successful fitness business.. If an individual was your client once, it’s probable that he or she can become a client again !!

Here are some ideas on how to win back your old clients / customers –

1. Provide incentives :

A general economic principle is that people respond to incentives. People are constantly weighing the costs vs. benefits of the decisions they make. To encourage previous customers to come back for more training sessions or classes, you have to tip the cost – benefit scale in your favor. One way to do this is to provide them with a discount. For example, if a client purchases five sessions at the full price, offer the sixth training session for free. If they refer a friend to your training studio, give your referring client his or her next training session for free. You can also encourage clients to bring a friend, a significant other, or heck, even a first date! At the very least, being different will help you stand out and stay top-of-mind.

2. Show you have a long-term plan for their overall fitness :

Having a personal trainer means one-on-one time with a client, which means you as the trainer are completely focused on that client’s fitness. A great way to encourage clients to come back is to sell the individualized-attention aspect of personal training. Remind your clients that you are completely focused on improving only their fitness and working to help them achieve their goals. To drive home that point, show your customers how you can help them set goals and how you can build a workout plan that’s right for what they want to do. When you can show clients you have a plan for them beyond the immediate meeting, you have a distinct advantage and are more likely to earn their long-term business.

3. Share success stories from existing clients :

A great way to reengage a client is to tell them about the success stories you’ve had with other clients. The best trainers use their past successes, such as providing before and after shots, to market their fitness business. Do you have existing clients you could use as part of a case study? If you have success stories of previous clients who do not wish to be featured, you can instead speak in generalities of your success with that particular demographic.

4. Talk about improvements to the facility :

What improvements have you made since you were last in contact with clients? Talk about the extra certifications you’ve received, the new equipment you’ve added to your studio, and any other improvements or new services that you are offering. The fitness world continues to innovate. How is your personal training business evolving with the times? The improvements you make may seem trivial or routine to you, but improving your business is a great way for you to pick up the conversation with an old client.

5. Come up with New Events :

People love trying new things! To encourage clients who have maybe become bored with the same old workouts, come up with a new event that catches their attention. For example, offer a boot-camp series of classes that culminates in participation in a big fitness event. Another great way to reengage past clients is to host a social hour. Set up a happy hour at a local restaurant and truly get to know them beyond the studio. It’s a great way to network with your clients and have some fun !!

Re-engaging old clients definitely takes some effort, but is a great way to help grow your Fitness / Services business. As I mentioned earlier, if they’ve already purchased from you, it should be much easier for them to purchase from you again.

People who are already aware of your business will be easier to convert back into a paying customer, than those who still need to become aware of your Health Club / Personal Training business…

“Recruiting High-School & Non-degreed Top-Talent” : “a Missed Corporate Opportunity” |by: Dr. John Sullivan | ERE Media

Most Corporate Recruiting Leaders wear blinders “that prevent them from even considering recruiting Top High School & Non-degreed talent into their professional positions”..

Not every recruiting leader has a fear of recruiting teenagers, however. It’s well-known that NBA basketball has prospered as a result of hiring right-out-of-high school talent like LeBron, Dwight Howard, Kevin Garnett, and Kobe Bryant who quickly proved themselves. In the corporate world, Google, Facebook, Yahoo, and Microsoft are leaders in teenage recruiting (Microsoft attempted to recruit Mark Zuckerberg after he created his Synapse program in high school).

Many corporate recruiters and managers will immediately reject the concept of recruiting high-school/non-degreed talent, but such an old-fashioned snap judgment could be costing their firms millions of dollars..

Not just athletes but talent in many different technical disciplines are developing much earlier than they used to. Perhaps the best recent example is when Yahoo acquired the mobile website Summly from a 17-year-old tech whiz for $30 million. The firm’s owner, Nick D’Aloisio, who barely had a high school diploma, was asked to stay on and work for Yahoo.

Recruiting Non-degreed & High school Talent Is Not Unusual in the Corporate World :

In the corporate world Google, which used to be fanatical about degrees, top schools, and grades, is the leader in the “who-needs-a-degree movement,” as illustrated by Laszlo Bock saying, “… the proportion of people without any college education at Google has increased over time … we have teams where you have 14 percent of the team made up of people who’ve never gone to college.”

He also stated that “ when you look at people who don’t go to school and “make their way in the world”,”those are exceptional human beings”. And “we should do everything we can to find those people ”..

Because Facebook’s CEO is a college dropout, you shouldn’t be surprised to hear what the company had to say on the subject : “It would be weird for us to require a college degree. If you can build awesome stuff and have big impact, that’s all we’re really looking for.”

EA has recruited young gamers. Apple has also recruited high schoolers (Chris Espinosa, employee No. 8, was hired at 14). Obviously fast-food and retail establishments have been successfully hiring for years.

More Arguments & Illustrations Supporting the Expansion of the Hiring Pool :

The “don’t disturb their studies” mentality is an antiquated one. Below you will find a list of examples that illustrate the tremendous value of Degree-less Talent.

  1. Talent now develops early & outside of coursework – with the growth of the Internet and its numerous self-directed learning sites, it is possible for students to learn at a professional level. In addition, they can post and test their ideas and quickly get feedback, which allows them to develop extremely fast. If you only look at an individual’s coursework or degrees, you’ll simply miss a great deal of younger talent.
  2. Not every Technical field OR Position requires a Degree – many technology areas like writing code, designing websites, or creating social media site features simply don’t require any college courses. Numerous teenagers have shown that visiting and using these types of sites for more than a decade as children is sufficient preparation. Their age may give them more insight into the next generation of users. Mobile apps are another main technical area that doesn’t require an education because the media is full of examples of teenagers who have successfully developed iPhone and Android apps. Technology advances have also made it easy for almost anyone to create one of these apps.
  3. Thiel under-20 fellowships illustrate their potential – PayPal cofounder Peter Thiel has gone through three rounds of paying students as young as 14 $100,000 over two years to forgo college and instead to start their own businesses. The Wall Street Journal reports an impressive result of his “keep them out of school” effort including the fact that “64 Thiel Fellows have started 67 for-profit ventures, raised $55.4 million in angel and venture funding, published two books, created 30 apps, and 135 full-time jobs.”
  4. Science fair winners produce professional results – Jack Andraka, the grand prize winner at the Intel International Science Fair, demonstrated that even a teenager could develop an accurate test for pancreatic cancer. The many sophisticated accomplishments of recent science fair winners further demonstrate the capability and the potential value of self-motivated teenagers.
  5. Getting a job out of high school no longer prevents a college degree – when the antiquated prohibition against hiring high school students began decades ago, the only college option was full-time attendance. However, now that there is an array of Internet, remote, night, and part-time college options, a full-time job is no longer a barrier to starting or finishing a college degree, even at prestigious schools. And most firms are more than willing to pay for a part-time degree program.
  6. ” You can be an effective CEO without a degree” — the recent success of Mark Zuckerberg as CEO shows that even the highest corporate positions don’t require a college degree. Other college dropouts like Steve Jobs, Bill Gates, Michael Dell, and Larry Ellison show that the success of non-college grad executives is not a recent phenomenon.

Action Recruiting Steps :

If you are one of the few corporate leaders who realize that recruiting top talent that may not have much formal education is an incredible opportunity, here are some action steps to consider.

  • Make a strong business case — convince executives of the economic damage that your firm will suffer if it maintains a “degree-required” approach to recruiting. Start by working with the CFO’s office to find a credible way to demonstrate the economic impact that the under-20 crowd has already had at your firm. The most obvious value added usually comes from your high school or college interns who also will look to quantify the contribution made by non-degreed employees. Also look to demonstrate the value of the innovations created by these individuals at other firms within your industry. You should also attempt to measure the positive economic impact that the presence of these younger, less-experienced workers (including acting as reverse mentors) may have on stimulating and challenging your employees with formal degrees.
  • Start off with a small effort — the best way to prove the value of hiring teenagers or those without degrees is to run a pilot and hire a handful of them. Design the program so that it includes the best features of quality internship programs. Then over time track their output and innovations to gauge their performance and their value added. Also look at their failure and turnover rates to see if they are significantly higher than normal.
  • Use the best recruiting approaches – just as with traditional recruiting, referrals are the best way to identify this up-and-coming teenage talent because they are likely to be well-known among their peers and teachers. Holding an Internet technical contest is another excellent way to identify them. You should also encourage your employees to find examples of their work when they are exploring the Internet. You will have to develop some convincing arguments in order to land them. This is because many parents, teachers, and high school counselors will probably advise your targets against taking full-time work before they start or finish college. As mentioned earlier, offering a benefit that allows them to complete a college degree while working full-time for your firm must be an essential component of your recruiting argument.
  • Provide them with a Mentor – although they may have technical talent, these teenage hires may be less productive because they don’t understand corporate processes. Providing them with a “not much older” mentor and adding a social media site where they can communicate may help them to be productive faster.

Final Thoughts :

Most corporate recruiting leaders are extremely risk-averse, so it’s not surprising that only a handful of firms have realized the value of hiring from this normally bypassed talent pool.

Many leaders and managers hold the antiquated notion (usually supported by high school counselors, university personnel, and some parents) that a corporation should not interfere in a student’s path to completing a college degree.

Your job is to “identify the top talent in this pool and get them signed up in some capacity”, so that you can begin using their ideas and skills. If you don’t act quickly and begin to build your “talent employer brand” and recruiting processes soon, you may never be able to catch up to the Googles, Facebooks ,Yahoos & many Global fast-food and retail establishments…which has succeeded in spotting & nurturing such pool of talent…

“Cementing the future of REIT” in Indian Real-Estate Landscape |by: Avinash Narvekar | Business Line

In a major step to fuel the growth of the country’s real estate sector, SEBI recently released a consultation paper together with the draft Real Estate Investment Trust 2013 (REIT) regulations. Issued after discussions with stakeholders, the draft regulations have been widely seen as robust and along the lines of regulations in other countries. It is critical that the initial REITs prove successful for investors so that they can become a stable platform for providing developers exits from commercial projects and replenishing equity for new projects. This would also offer investors a relatively lower-risk opportunity and access to commercial real estate without need for large outlays.

To protect investor interests and make REIT returns less risky and more predictable, SEBI has been cautious on some of the requirements. The regulator might subsequently relax some of the regulations based on the initial REITs’ experience.

The indicative requirements include holding 90 per cent of the REIT assets in the completed revenue generating properties, no investments in vacant or agricultural land, leverage capped at 50 per cent with credit rating, majority consent for leverage above 25 per cent, minimum unit size of Rs 1 lakh, specific provisions for related-party transactions and prescribed majority consent for identified matters.

The current regulations, however, seem to facilitate only large developer-sponsored REITs, with the sponsor holding 25 per cent stake. The prescribed minimum asset size of Rs 1,000 crore translates to a sponsor holding of Rs 250 crore (lower with leverage). This would effectively mean that professional fund managers, including reputed ones, cannot sponsor the REIT owing to the significant amount involved.

The Alternate Investment Fund (AIF) regulations OR the mutual fund regulations, for example, do not require such large investment by fund sponsors/ managers. Unless the issue is suitably addressed, there may only be a handful of REITs ; and several medium-scale developers may not get an exit for their commercial properties, including Grade A properties and those with quality tenants. The desired benefits may, therefore, not be widely available to the real estate industry.

Another important aspect is the participation of foreign investors in REITs. The guidelines permit both domestic and foreign investors, subject to exchange control regulations.

Under the current exchange control framework, the participation of non-residents in REIT could be broadly characterised as :

  • Investment in the real estate space;
  • Investment in a Trust;
  • Investment in listed securities.

However, there are limitations to each of them. Investment by non-residents in real estate is generally restricted and subject to prescribed conditions. Also, investment by non-residents in a Trust requires approval from the Foreign Investment Promotion Board, whereas investment through listed securities is open only to some.

The RBI needs to liberalise current regulations to specifically allow REIT investments by non-residents, including NRIs. This would facilitate the creation of India-specific asset REITs in India, rather than abroad as happens currently.

However, SEBI’s efforts to facilitate REITs in India may not be fruitful without the necessary amendments in income tax regulations. Currently, up-streaming income from special purpose vehicles (SPVs) — which are incorporated companies — to the REIT through dividends would first attract corporate tax at the SPV level and then dividend distribution tax. Together they constitute an effective tax rate of almost 44 per cent of the SPV income. Given the yield investment nature of REITs, where every basis point matters, this tax rate may make the REIT un-viable.

To illustrate, a Singapore-based REIT investing in Indian companies with ready commercial assets can, in certain cases, repatriate income at an effective tax rate of 15 per cent in India, under the India-Singapore tax treaty. The parity should be provided for both domestic and foreign investors. Singapore, for example, offers complete tax exemptions to REITs that satisfy certain conditions such as distributing 90 per cent of the income.

With certain modifications in the supporting laws, the REIT regime can go a long way in stabilising the Indian real estate sector while, at the same time, providing the much-needed ability to invest in quality commercial assets for reasonable returns at lower risk.

“Sales Discounts”: Discounting the Price is Discounting the Value |by: Geoffrey James | SalesForce

Sad to say, many salespeople get in the habit of using discounts to close deals. There are several reasons that this usually isn’t a good idea.

  • First, the sales discount reduces your profit on the sale.
  • Second, a discount implies that the best price wasn’t offered first.
  • A discount “cheapens” the price / value of whatever you’re selling in the mind of the customer.

It’s much more effective to think of list pricing as something that you defend, rather than discount, according to Robert Nadeau of the Industry Performance Group. He recommends the following process : 

1. Identify What’s Different : 

In order to justify paying a higher price for your offering, your customer will need to see either you, your offering and/or your company as different (and, specifically, better) than the competition.  There are SIX basic types of “differentiators” : 

  1. Feature. A characteristic or capability that your offering has and other products lack.
  2. Brand. An emotion uniquely tied to your company or offering.
  3. Convenience. Your offering is easier for the prospect to purchase and support than the competitor’s.
  4. Quality. Your offering is higher of quality (lasts longer, works better, etc.) than the competitor’s product.
  5. Commitment. You’re personally more committed to the customer relationship than the competition.
  6. Integration. Your offering works better with products that the prospect has purchased in the past.

The more differentiators that you can identify and articulate, the easier it is to defend your price. 

2. Create a Financial Case: 

Now that you know what’s different about your offering, tie each differentiator to one or more of the following FIVE types of financial benefits:

  1. Increased revenues. How will your offering help the prospect improve their revenue ? How much more product could they sell ? How much are those extra sales worth to them ?
  2. Decreased costs. How will your offering help reduce the prospect’s costs ? How much will they save in labor costs ? How much will they save in overhead ?
  3. Improved quality (of their own product). How will your offering help improve the quality of the prospect’s offering ? How much will they save in reworks, scrap, overtime, corrective action costs, and so forth ?
  4. Faster delivery (of their own product). How will your offering improve the prospect’s ability to deliver their own offering ? How much will they save in canceled orders, expediting costs, air freight charges, and so forth ?
  5. Lower risk. How will your offering reduce their exposure ? How much will they save in penalties, legal fees, and litigation ?

The bigger the financial impact of the problem and solution, the less relevant your price becomes.  And tying those benefits to your differentiators gradually pushes the other choices (specifically, the lower-priced competitors) entirely off the table.

3. Get Consensus on Financial Impact : 

Work with the prospect to get agreement on specific negative financial impacts of the problem that your offering solves.  Make sure the decision makers agree with the cost analysis.  The bigger the negative impact, the better the value.

Then work with the prospect to define all the ways that the problem that your solution addresses impacts their revenue and profit. Include direct costs, lost opportunity costs, personnel costs–whatever applies.

For example, if you can service your product at the customer’s site within one hour and the low-cost competitors can only get provide within 24 hours, determine how much it would cost the customer to be without support for 23 hours.

Approaching a sales situation in this way gradually forces the competition out of the picture because it builds a financial case around what’s unique about you and your product.  As you build the financial case, the prospect becomes convinced that only your product makes financial sense.

“Health-Club Sales” : What is the “Why” behind the “What” ? |by: Ryan Junk | Club Solutions

Far too often, our Club-sales employees try to impress our guests with their knowledge of fitness and the facility. However, we must ensure that they are genuinely interested in finding out exactly what our guests want. Far too often, we train our team members on just the process, and NOT the intent behind it. 

A few points to go over : 

  1. The correct way to greet our guests.
  2. What questions to ask when qualifying a prospect. 
  3. How to summarize and highlight our clubs while on tour.
  4. How to properly present membership options.
  5. How to overcome objections or concerns. 
  6. In training, we often skip over the fundamentals of sales. The fundamentals do TWO things : truly discover the needs of a prospect, and then communicate how those needs can be met through a membership — making it a win-win situation.
  7. When qualifying, the goal is simple, but very difficult if not prepared. Create a conversation that leads to the sales team member getting to know what their guest is looking for, while building a genuine relationship. 

What if your sales person doesn’t care ? 

Then you hired the wrong person. If you hired the wrong team member, and this sales person doesn’t genuinely care about helping people, then this training will fall on deaf ears. If they try to fake it, they will come across insincere, and in some cases, make their guest uncomfortable. 

Isn’t that why we prepare them with the correct questions to ask ? 

  • People buy from people they like and trust, and those that genuinely care about their guests will accomplish this. We just need to let them know how to convey it without sounding like we are just peppering them with questions. 

How do we get our sales team members to ask questions that lead into open conversations ? 

  • It’s not the questions we need to worry about. Far too often our sales staff asks questions with the intent of using the guests’ responses against them later in the sales process. That’s listening with the intent to respond, versus listening with the intent to understand. Poor sales people just like asking questions to tie their guests down. 

If this conversation is comfortable and informative, the sales person now knows what parts of the club to discuss in detail, and which to give a quick overview on. The areas in detail will be conversations, as opposed to presentations.

If done correctly, this process will minimize the amount of membership options that your sales person will need to present, and make the enrollment process simple and painless for the guest. This also sets the foundation of two-way communication, so if the guest needs more information to make their decision, they can comfortably talk through it with the sales consultant.

To gauge your current sales team, try sitting down with them one-on-one. Tell them that you’d like to have a conversation on how they qualify their guests before taking them on a tour. If it sounds like an episode out of your favorite cop show, you’ll know where to start.