KnowledgeFest Attendees Tackle Internet Sales Problem

By Amy Gilroy On Apr 5 2004 - 6:00am




LOUISVILLE, KY. — About half the retailers attending the MERA KnowledgeFest seminar here on "Living With The Internet" said they are losing about 10 percent or more of their business to the Internet, according to a show of hands..

Midway through the presentation by Tom Egelhoff of www.smalltownmarketing.com, a small business information Web site, a heated discussion was triggered by a retailer who wanted to know how to counter the fact that his store "has become a showroom for the Internet." In other words, shoppers come to his store for advice and then go buy the product on the Web.

There were other retail complaints, exemplifying a growing frustration with what retailers perceive as a formidable new competitor.

David Lewis of Lewis Electronics in Shaker Heights, Ohio, complained that Internet sellers are getting unfair volume discounts from suppliers as they blow out lots of product at low prices, while it's the brick-and-mortar retailers who are explaining, pushing and building the brands.

He also noted that the sales tax issue is now unfair. "It's killing us. If you buy from a business across state lines, you don't pay sales taxes, so it makes up for shipping [fees on the Internet]." He continued, "Let's have a level playing field. I'm paying the salary of the guy at the local fire department and guess where he's shopping — on the Internet, buying from the guy out of state."

John Howell, co-owner of three-store chain CKR in Montgomery, Ala., said retailers can't just sit around and be angry. He told the audience, "I was bitter like you all a year ago until I decided to do something about it." He said that if a customer mentions pricing on the Web, he walks them over to a computer and brings up the particular Web site. He then calls the site on the spot and says he bought a product two weeks ago and it doesn't work. Can he return it? When they say no, he's now got an open-minded customer. "I educate the customer on the spot and then we negotiate a price."

He said he also keeps prices high for product but low on installation rates; however, he charges a premium for walk-ins with a product purchased from the Internet. "If they don't like it, I send them to Best Buy," he said.

Egelhoff cautioned the audience that if customers are entering the store and then leaving empty-handed, "It's not an Internet problem, it's a sales problem." He asked, "Why do they come to your store to begin with? The Internet is just another competitor. It's another Circuit City or whatnot. If your closing rate is not at least 30 to 40 percent, you have a sales training issue, not an Internet issue."

Egelhoff offered MERA members several suggestions:

  • Find out the amount of business walking away from the store. To do this, give every salesperson a set amount of business cards each day and require he hand one to each customer. Count his remaining cards at the end of the day and compare it to his sales.

  • Frame testimonials from happy customers and hang them all over the store and post them on your Web site." Howell of CKR noted later that he posts on his Web site testimonials from unhappy Web customers who then turned to his store for help.

  • Take e-mail addresses from customers and send out follow up questionnaires or sales information after one week, and then again in 30 and in 60 days.

  • Know your ZIP code. Find out the demographics of your ZIP code and advertise accordingly. Egelhoff suggests visiting . Click on "Free look ups" and then "Income tax statistics." The site will show the average adjusted gross income for your area, the number of people who are single vs. married and the age breakdown of the tax filers.

  • When you hire a new salesperson, give him a questionnaire after he's been at the store for two months. He'll give you a fresh perspective on how you run your business and he may be able to make helpful comparisons from his last job. You can also find out where he needs or wants more sales training.

  • Never have a sales contest based on the most sales. Then the slower sellers quit halfway through the contest. Instead, ask all salespeople to increase their sales by 10 percent so they compete against themselves.

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