Sports Retailers Take A Fresh Look At Motivating Sales Associates.

(Wednesday, June 01, 2005) - In a constant battle against sales staff ennui, sporting goods execs have long wondered how best to motivate employees on the selling floor. Store management seems to be taking a harder look at sales help because customer service has become a bigger differentiator as Wal-Mart and Target have upgraded sporting goods assortments. Moreover, for a number of retailers, having a savvier selling staff is a key tool for outdoing sporting goods competitors that carry many of the same brands.

Staffing experts agree that having motivated employees starts with the hiring process—especially finding good leadership among store managers and supervisors.

"The store manager really sets the tone not only for the associates, but for the rest of the management team," says Andy Carlin, Gander Mountain's SVP of stores operations. "Generally speaking, in 99 percent of the cases where you have employee turnover or moral issues, it's some function of the store manager."

Experts also agree that creating a positive, fun, working environment inspires good effort.

"If we can motivate our employees in any way, we find a way to do it," says Ed Ariniello, VP of operations at G.I. Joe's. "I do a lot of walking around patting people on the back and I go around the organization and encourage people to do the same. When they do that, the employees feel great."

But stores differ when it comes to compensation, especially regarding commission pay as well as SPIFs (Sales Person Incentive Funds), whereby a vendor will compensate an associate to sell product. Many believe such programs favor one brand over another, creating situations where the customer isn't served best.

Even if an associate receives a straight salary, some stores are very aggressive in using sales contests to spur sales while others are not. For instance, Modell's Sporting Goods conducts sales contests, especially around Christmas, and sometimes allows vendor SPIFs. But the sales staff is primarily motivated by a healthy salary and benefits package, and the chance for advancement.

"We try to be very competitive with salaries and they get reviewed every year," says Craig Rosenberg, Modell's head of customer service.

Rosenberg also reports that store managers are largely responsible for keeping morale high on Modell's selling floors. "We try very hard to hire managers who are very people oriented," he says. "We find that these are the ones that are better motivators, better mentors, better coaches, and people want to work for people like that."

For its part, Mr. Alan's, the 11-unit urban chain based in Redford, MI, uses a heavily based commission program.

"What's wrong with money?" rhetorically asks Mr. Alan's CEO Roger Karnow.

Mr. Alan has two incentive programs each month: one based on gross margin and another on items per transaction. The margin bonus discourages employees from just selling items that are on sale.

While Karnow does run some SPIFs—noting that Rockport handed out bikes in a recent one—he believes internal programs more effectively drive sales. The "team atmosphere" is reinforced via Saturday morning meetings, where the staff discusses items being promoted and gift certificates are given to those who have reached bonus levels.

"Even though they are paid as individuals, we also want them to care for their fellow employees," says Karnow. "It's a trick to accomplish that goal. Sometimes it works. Sometimes it doesn't."

At Schuylkill Valley Sports in eastern Pennsylvania, all floor associates get an extra $1.50 an hour each month if they collectively beat last year's numbers.

"It's everybody at that store," says Schuylkill Valley CEO Randy Ruch. "That way, people don't hang out near the cash register or the high-ticket items. They'll restock shelves and clean the place. They'll say hello to people even though they may not be the ones to make the sale. They're all in it together. And it puts some peer pressure on them too," adds Ruch. "If I'm on the floor and I know this other guy's lazy and not taking care of customers, he's affecting me. So it does put out a team concept that way."

Schuylkill uses some SPIFs from vendors, but tends to find more success with unique programs. For example, a "Pass The Buck" incentive pays $20 to the associate with the largest sale in a four-hour period. "We might run it once a month," says Ruch. "It makes it a little more fun for them."

A big incentive for Schuylkill's managers and supervisors is the company's annual summit meeting, a three-day, two-night affair held in January.

"If we don't make our goals, we [have the meeting] at the New Jersey shore, which isn't particularly appealing," says Ruch. "If we make our goals, we do it in Florida at St. Petersburg Beach. That's a little better in January." Schuylkill's staff was at St. Pete's this past January.

At The Finish Line, associates are paid hourly, plus they have a chance to earn bonuses. "We believe that paying a fair salary or rate motivates our people correctly to service the customer as well as maintain our higher store standards," says Mike Marchetti, EVP of store operations.

The Finish Line started using vendor SPIFs a couple of years ago, and Marchetti notes that they have been "very effective." However, to deter associates from pushing an inappropriate sale on a customer, The Finish Line uses SPIFs only on items on which no other vendor competes. The chain also uses several internal contests to motivate employees.

"Some [contests] are strictly store sales and others are product- or vendor-related," explains Marchetti. "We try to balance them so that all associates participate in one contest or another."

Like other retailers, Marchetti points out that motivation comes primarily from store management, who are rewarded with bonuses and trips to the company's annual National Manager's Conference. "Good leaders train, coach and motivate employees to maximum productivity," says Marchetti.

Unlike many ski and snowboard shops, Lakewood, CO-based Christy Sports doesn't use many SPIFs because it leads to poor customer service.

"If you stick a dollar value on a boot or a ski, oftentimes the employee will gravitate there—right or wrong—for the customer," says Dan Fox, Christy's director of Front Range Operations.

Instead, Christy sets monthly goals based on the prior year's sales, with employees earning 2 or 3 percent of what they sell if they reach the goals, and 1 percent if they fall short. But Fox estimates that the overwhelming reason Christy's employees are driven to sell is because they're passionate about skiing and they like working at the chain.

"They're kids in a candy store," remarks Fox. "They love talking about what they're talking about. And the reason customers shop with our employees is generally because the employees are happy."

Toward that end, Christy makes sure to provide flexible schedules to enable workers to ski.

"We hire people that are passionate about skiing and allow them to do that, and that includes managers and supervisors, as well," Fox says. "Those people still need to be excited and enchanted about the sport that we sell."

In addition to a straight salary, MC Sports offers associates a number of incentives through rewards programs that include SPIFs, bonus plans, contests, store-to-store competitions, idea/suggestion rewards, educational reimbursement, and holiday pay, according to Connie Rush, MC Sports' director of human resources.

MC Sports also reinforces teamwork. In recognition of National Ride Your Bike To Work Day in May, workers in tandem teams that rode the most miles won bicycles. A store's staff may also win a pizza party or gift certificates for reducing shrink in the store.

Associates' morale is rejuvenated by twice-a-year training demos. But Rush believes much of the motivation comes from store managers, who earn bonuses based on four criteria: sales, margins, shrink, and payroll percent—the latter of which encourages managers to reduce payroll during slower times.

Rush also notes that managers are responsible for creating a climate for open communication, recognizing good performance with public and private praise, and getting associates to "feel they're part of a team." She observes, "The right management team leads the entire store team."

At G.I. Joe's, most hourly employees earn a base salary as well as a monthly bonus based on the percent of the sales increase over plan. However, Ariniello recalls that about two years ago, the retailer switched to a commission-based pay structure for footwear and bindings. Besides improving sales, G.I. Joe's has found that the commission structure more quickly measures employee performance, and aids in reducing shrink.

Ariniello believes G.I. Joe's avoids selling products for the wrong reasons by deducting returns from paychecks. The chain is "seriously looking" at using a commission-performance formula in accessories, as well.

Outside footwear, G.I Joe's pays special rewards to associates completing a sale of $500 to $999, and a greater one for sales over $1,000. Employees that receive a positive customer comment receive a gift certificate and are entered into a pool to become an employee of the month for that location and win a trip to anywhere in the world.

G.I. Joe's also has more vendor SPIF programs than most chains. "We're a lot about customer service so if there's a SPIF out there from a vendor, they're bringing it to us or we're finding a way to help them create one by educating them," Ariniello says. He adds that one non-monetary reason employees like working at G.I. Joe's is because the extensive training sessions provide many chances for associates to test new product.

At Gander Mountain, vendors help set up new store openings and continually train staff on product, but the retailer doesn't use SPIFs. "We like to get all our incentives back and turn them into price advantages for customers," says Carlin.

The outdoor chain pays its store associates a straight salary, and offers a monthly incentive to all staff members based on how much sales exceeded budgeted levels. "We very much believe in the team concept," Carlin remarks.

Good employees are frequently rewarded through advancement, and Carlin notes that Gander Mountain's rapid expansion "creates a great opportunity for people to come in and move ahead in the organization."

Carlin also believes associates remain motivated because each store can make decisions on presentation and even merchandising, such as bringing in local product. Recognition programs such as Associate of the Month, as well as hunting and fishing bonding trips with store managers, also help build morale. One special perk is that hourly associates and managers are featured on Gander Mountain's "We Live Outdoors" TV show which is shown on the Outdoor Life Network cable channel. "It's a great thing for a store associate in that segment," says Carlin.

Pat Sweeney, co-owner of a Fleet Feet store in Sacramento, offers a competitive salary, 401K, and profit sharing participation for full-timers. But he admits that many of his employees, who tend to be older than those at typical sneaker chains, are looking for a lifestyle change and might be willing to take a lower paycheck.

"In many cases, you've got to hope it's a second income," says Sweeney. "I have a lot of people who just got tired of what they were doing. It's less pressure here and we provide a positive, fun atmosphere, so we can attract people who are not motivated by money as much."

Vendors provide some free product to employees, particularly during launches, and Sweeney will tailor SPIFs to push sales of the whole line rather than a specific item.

A good year may lead to bonuses across the board. Springing for lunches or dinners also lifts morale, and Sweeney stresses that it's important for the owner to have an active presence at the store. "If you're an absentee owner and relying on others to run the store, ultimately you'll trip up and not manage as well," he says.

Ed Griffin, co-owner of a Fleet Feet store in Syracuse, pays his employees a higher wage than typical retailers, offers health benefits, and is exploring profit sharing with some employees. He complements this compensation with "the unexpected." For example, Griffin has handed out $50 bills to employees on a record day, thrown victory dinners at the completion of a busy period, or provided gift certificates or extra days-off for good work.

"When some things are expected, it kind of loses its luster," observes Griffin. He adds that motivation often comes down to caring for employees—even getting involved in setting goals for each one.

"If we treat our employees well, try to develop a career path for them, and get them to achieve their goals, it kind of cascades to how they treat your customers," says Griffin. "They give you a much better performance."

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