IT & consumer electronic majors in India are losing up to Rs.84 lakh per store annually due to poor sales effectiveness. According to a survey conducted across Asia Pacific by Grass Roots Group, a capability gap in establishing customer needs and closing the sale by frontline sales staff at the retail outlets is primarily responsible for this loss.
The “Are You Being Sold?” survey focussed on 14 multinational brands in the IT hardware and software as well as consumer electronic space. The research was conducted in reseller outlets of these brands across seven countries – India, China, Singapore, Thailand, South Korea, Indonesia and Australia – with the help of 1,400 mystery shoppers and the performance of the sales staff was judged on the basis of the complete shopping experience, including a salesperson’s response time, product knowledge and attempts to close a sale.
India’s robust retail culture strongly plays out when measured on the ability to greet the customer. Salespeople have scored a higher than average rating in terms of the proportion of customers being served immediately. Also, the product knowledge of Indian sales staff at 81% was on par with the rest of the region.
However, and surprisingly, given this statistic, they were significantly less likely to recommend a brand. Talking about India’s performance, Stephen Hibberd, Regional Director – Asia, Grass Roots Group, explains, “Through this survey, we wanted to understand if leading hardware and software giants were being well represented by their channel partners and how effectively they were being sold. India’s excellent scores in categories like product knowledge indicate that although the salespeople have the technical know-how about the product, they are simply not feeling engaged enough with the brand to support their products or make recommendations.”
Furthermore, although 95% of Indian salespeople listened carefully to the customer, they negated this by scoring only 41% in establishing customer needs by asking the right questions such as the budget and intended use of the product. India has also scored significantly below the regional average in terms of first impression, closing the deal and sales effectiveness.
These statistics are sure to have alarming implications for those industries which depend on channel partners such as distributors, resellers, franchisees or third-party intermediaries for sales. Hibberd’s recommendation to business, both manufacturers, through their channel and retailers, is to adopt a solution which addresses a multiple of different needs, instead of a singularly focussed strategy.
A surprising observation in the Study is the attitude of Indian customers; 51% of whom rated the salespeople as “excellent” or “good” for establishing customer needs. This rating was given by the shoppers even when more than half of the sales staff failed to ask the right questions to gauge the customer’s requirements. Also, 40% of the shoppers have rated the overall sales effectiveness at the assigned store as “excellent” or “good” despite the poor performance of the sales staff in most of the categories. This clearly shows the low expectation level of the customers in India with regard to the service rendered at the retail outlets. Therefore, a little extra push by the brands along with an additional effort by the retailers and salesmen to improve customer relations and engagement would do wonders for the business as well as for the industry at large.
