The Hindu Business Line : The demotivated dealer salesman

Reward for performance and longevity, better compensation and regular training programmes would make the Indian dealer salesman more competent and effective than before.

THE Japanese call it anshinkan — which literally means a peaceful, reassured state of mind. This describes a Japanese customer's ideal serene state — a state which all sellers in the distribution chain should have as their goal. A decade ago, the Indian market was a seller's one. With the entry of the MNCs, however, our domestic companies got shaken up by the sudden competition. A tough fight for growth began, with all players employing different strategies in the market. However, one of the tools which retailers and manufacturers have yet to exploit fully to maximise the selling potential is that ubiquitous smiling face behind the counter — the dealer salesman.

In the organised retail-setting of the West, the number and quality of salespersons form an important basis of classification of retail institutions by store format — that is, a convenience store has more while a warehouse club has less number of sales people. In fact, labour costs can amount to 50 per cent or more of some large retailer's operating expenses. Interestingly, for supermarkets, thinner staff actually makes sense — not merely for cutting costs but also because fewer people serving stimulates impulse buying (A staggering 60 per cent of what we buy in supermarkets is unplanned, and in stores where customers are served, the 60 per cent figure drops dramatically!).

Herein lies the essential difference between the FMCG sector and the durables sector... Obviously, in low cash-ring and frequently bought daily-use products, the propensity to trial is higher, and hence lesser time is spent pondering over the purchase. In such a situation, the use of the salesman does get limited. But in, say, appliances, automobiles or services, which are high cash-ring, high exit-barrier, less frequently bought, long-lasting products, the tendency to spend time thinking about the purchase is far higher. The risks can be economic (The higher the price, the more we need to reassure ourselves, especially if it is above our means); social (Is this what the Junejas bought/will owning this classify us in the same strata where we want to move?); personal, or performance-based. In these cases, decision-making is helped vastly by the informed salesman.

From the dealer's or manufacturer's point of view too, conversion of the consumer in that particular shop/to that particular brand assumes much greater importance in durables, as a customer lost once to a rival is gone forever (Or at least, till the appliance/car lives out its age). In the FMCG sector, however, that same customer might come back to your shop for his next purchase of biscuits, or might try your brand of deodorant the very next month.

From the manufacturer's/marketer's view, this again highlights the different roles that advertising and trade marketing play. Advertising works at creating a desire to buy the brand by building an emotional relationship with it, and thus merely pulls the consumer to the shop. What happens once the consumer enters the shop is a whole different ball game. It is here that the dealer/salesman is the king — in the Indian durables sector, the dealer is not merely a distribution intermediary, he is the most effective reason for the consumer to buy a brand. It is rightly said, `Good advertising you pay for; a good dealer you pray for'!

Basically, consumer learning is really difficult in complex and technical products. Also, in today's cluttered marketplace, most consumers react by getting confused. Hence, the role enhancement of the dealer salesman. This is the fellow who educates you about a new product or a new category (Ma'am, this new silk epil replaces all your waxing needs); explains product features or unintelligible jargon to you (Sir, the Magic eye is actually a temperature sensor), gives you comparisons between various brands (The Whirlpool agitator gives you a wash as if you were scrubbing clothes yourself, while the LG punch wash gives longer life to the clothes); reassures you about quality and service fears (This refrigerator has a seven-year warranty, and we also act as a service centre); familiarises you with the product and explains the working (See, all you have to do to get your tandoori pomfret is set the timing on this screen, and press this start button)... In contrast, what does the FMCG counter salesman say? That this thanda tastes better ?? Or that this shampoo `really' removes the dandruff??

So who is this animal? Where does he hail from, what makes him tick? This is a question, which in the current Indian situation of overpopulation and large-scale unemployment doesn't get the kind of attention it deserves. For organised large-scale retailers, a la those in the developed world, profiling and recruitment of sales persons is almost a science — and is practiced as rigorously as any HR work done in any regular corporate. Qualities required depend on the profile: a buyer must be attuned to the marketplace and be assertive in bargaining, the sales manager must be a good organiser and motivator, a merchandiser must have creative skills as well as an eye for detail, the store manager sets the tone for the store's culture.

But in India, at least in most small independent retailers, the dealer salesman is a very poor second cousin to his counterpart in the West. People get attracted to retailing as a career because they find jobs nearer homes, and retail positions they think, require limited education, training and skill. Inadequately qualified, compensated and motivated individuals, this breed of dealer salesmen is only now beginning to get some attention. This despite the fact that in most cases, the role they fulfil for both the dealer as well as manufacturers represented in the store is invaluable.

Obviously, the crying need from the salesman's point of view is to get competitive salaries, a sound compensation package, a modicum of a career growth plan and training — which includes that in product knowledge, sales skills and even managerial knowledge at a later stage.

Training is an area that, thankfully, is now being invested in by most manufacturers. In fact, Philips India Ltd had devised a retail training programme called the Philips USP designed to train not only its 120 in-house dealers but also outside dealers and distributors. The objective of the programme was to impart knowledge on Philips products and soft-selling skills. The training was meant for dealer salesmen to ensure effective demonstration of Philips brands to customers at the point of sale. Each USP covered about 40 sessions across 25 cities with approximately 1,100 participants per USP. These sessions were conducted simultaneously by three trainers in six languages across the country. The topics covered were role-players, presentations, hands-on-demos and group working. Philips USP is said to have led to a better volume offtake for the company's products as the USPs have helped in reinforcing the superiority and product differentiation of Philips products in the dealer salesman's mind, resulting in increased confidence in the Philips brand.

Most other durables and small appliance manufacturers are now into this activity in various degrees... sometimes it's a lunch meeting with a training session, a quiz and prizes. Sometimes it's a visit to the factory — all designed to woo the salesman. Auto manufacturers, of course, do this in a more sophisticated manner — with standards and procedures for customer conversion codified and rammed home.

Incentivisation for sales is the other technique used by manufacturers to supplement the person's salary and therefore buy his loyalty. But as always, commissions and incentives are a double-edged sword, and should be used with caution, lest a lack of incentives actually acts as a demotivator. Nowadays, most manufacturers use their own `quasi dealer salesmen', the in-shop promoters, who are loyal to their brand and often get aggressive at the conversion act, as their salary is highly commission based.

Retailers face a special HR environment — large numbers of inexperienced workers, long hours, highly visible employees, many part-time workers depending on seasonality and variability in consumer demand. But the biggest problem is that of turnover and absenteeism. Even in the US, greater than 70 per cent high school students in preparation for college, begin their working careers in retailing, but only three per cent of them want to continue. In India, the problem is not only dropping out but crossing over to competitors — in our land of horse-trading, even the lowly dealer salesman gets into the act. Supervision is the other headache for the dealer.

So what is the solution? Better compensation? Yes, but more importantly, a better sense of self-worth. Employees should be rewarded for performance and longevity. Repeated guidance and training on areas leading to enhancement of personality, knowledge as well as salesmanship is required. Basically, the dealer salesman needs to get much more confident, competent and therefore effective.

After all, with the durables appliance, one would say, `Move over wives... behind every successful dealer is a smiling and efficient dealer salesman'.

(The author is a visiting faculty member at IIM, Bangalore.)

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