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Expert Danmark Internal Benchmarking The Bachelor Degree in International Sales and Marketing Management Author: Henrik Aabo Christensen Project: Bachelor project Date: 5 January, 2011 Characters: 93.752 Supervisor: Jonna M. Fonnesbæk Hansen

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Page 1: Internal Benchmark - Expert Danmark

Expert Danmark

Internal Benchmarking

The Bachelor Degree in International Sales and Marketing Management

Author: Henrik Aabo Christensen

Project: Bachelor project

Date: 5 January, 2011

Characters: 93.752

Supervisor: Jonna M. Fonnesbæk Hansen

Page 2: Internal Benchmark - Expert Danmark

Expert - Internal Benchmarking

Bachelor Project

Henrik Aabo Christensen

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Table of Contents 1. Introduction ........................................................................................................................................................................................... 3

1.1. Background Description ......................................................................................................................................................... 3

1.2. Specification of Purpose ......................................................................................................................................................... 3

1.3. Problem Formulation............................................................................................................................................................... 4

1.4. Delimitation .................................................................................................................................................................................. 5

1.5. Methodology ................................................................................................................................................................................. 6

1.5.1. Choice of Theory ................................................................................................................................................................ 6

1.5.2. Data Collection ................................................................................................................................................................... 7

2. Internal Analysis ................................................................................................................................................................................. 9

2.1. History and Development ...................................................................................................................................................... 9

2.2. The McKinsey 7s Model .......................................................................................................................................................... 0

2.2.1. Strategy ............................................................................................................................................................................... 10

2.2.2. Structure ............................................................................................................................................................................. 12

2.2.3. Systems ............................................................................................................................................................................... 13

2.2.4. Staff........................................................................................................................................................................................ 14

2.2.5. Skills ...................................................................................................................................................................................... 18

2.2.6. Style ....................................................................................................................................................................................... 20

2.2.7. Shared Values ................................................................................................................................................................... 22

2.3. Part Conclusion ........................................................................................................................................................................ 22

2.4. Quality Assessment ................................................................................................................................................................ 23

3. The Stores ............................................................................................................................................................................................ 24

3.1. The Ideal Store ......................................................................................................................................................................... 24

3.2. What are The Successful Stores Doing Right ............................................................................................................ 26

3.3. What are The Less Successful Stores Doing Wrong .............................................................................................. 29

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3.4. What can be Improved ......................................................................................................................................................... 32

3.5. The Willingness to Learn .................................................................................................................................................... 34

3.6. Store Variables ......................................................................................................................................................................... 34

3.6.1. Ownership ......................................................................................................................................................................... 35

3.6.2. The Manager ..................................................................................................................................................................... 35

3.6.3. Number of Staff Members .......................................................................................................................................... 36

3.6.4. Surrounding Area........................................................................................................................................................... 36

3.6.5. Activities and Involvement in the Local Community................................................................................... 36

3.7. The Stores ...................................................................................................................................................................................... 0

3.7.1. What Separates the Efficient From the Less Efficient Stores .................................................................. 37

3.7.2. How to Make the Less Effective Stores Better and More Efficient ....................................................... 38

3.8. Utilization of Customer Relationship Management .............................................................................................. 38

3.9. How to Deal With the Problematic/Hostile Stores................................................................................................ 39

3.10 Part Conclusion ...................................................................................................................................................................... 39

3.11. Quality Assessment ............................................................................................................................................................. 40

4. Knowledge, Skills and Attitude ................................................................................................................................................. 41

4.1. Identification of Crucial Skills for the Store Manager .......................................................................................... 41

4.2. Identification of Crucial Skills for the salesperson ................................................................................................ 41

5. Plan of Action/Store Guidelines ............................................................................................................................................... 43

6. Conclusion ........................................................................................................................................................................................... 47

7. Bibliography ....................................................................................................................................................................................... 48

8. List of Appendices ........................................................................................................................................................................... 52

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1. Introduction

Expert Danmark A/S is a retail group that own several companies – Expert, punkt1, Lysmesteren,

ELplus, just to name the larger ones – together they generate a turnover exceeding 4 billion kroner

per year, making Expert Danmark A/S the biggest non-food retail group in Denmark.

1.1. Background Description

Technology in the electronics field is moving extremely fast, like personal computers did 10 years

ago. What is state of the art today can to some degree be outdated in just a few years, which is

underlined by the current MPG2/MPG4 situation, where televisions bought a few years ago do not

live up the current requirements to receive television signals.

This report will focus solely on the Expert brand. At the moment Expert is comprised of 104 stores

spread across Denmark which is 6 less than in the beginning of the year, indicating that the

recession has hit this line of business pretty hard. 77 of the stores are owned by franchise takers and

the rest are capital chain stores owned by Expert Danmark A/S. With this many stores it is important

to have some clear and indispensable guidelines, in order to communicate the same brand quality in

every Expert store. A visit in an Expert store should result in the same experience every single time

regardless of ownership, geographical location and other variables. If a customer has a bad

experience, he or she is likely to perceive the whole Expert chain as bad and vice verse. This can be

truly help build loyalty across the country, instead of just in a single store, if Expert manages to

create a good and streamlined service that is excellently executed every time.

1.2. Specification of Purpose

The purpose of this report is to identify how Experts stores can create most overall value, and what

must be done in order to achieve success.

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1.3. Problem Formulation

The focal point of this report is to uncover what options and possibilities Expert have in order to

improve the turnover, service, customer satisfaction, etc. of their stores in Denmark. An internal

benchmarking will be conducted in order to identify weak and strong points. In order to ensure the

best possible view of the current situation, and how to achieve better results in the future, the

following questions will be sought to be answered within the report.

What initiatives are required to heighten salespeople’s desire to improve their skills?

What are the traits of a good salesperson and those of a successful store manager/owner?

What is needed for the less efficient stores to reach the same level as the best stores?

What are the primary influences of distinguishing the best stores from the rest?

Afterwards a plan of action/suggested guidelines section will be created, in order to use the findings

of the report to suggest changes, as well as developing some guidelines for all stores to follow or

gain inspiration from.

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1.4. Delimitation

A short, but important, qualitative questionnaire was distributed to all the Expert store managers,

but disappointedly only 6 only of the 104 stores cared to answer, even though it could be answered

in 15 minutes. One store manager even had time for a 35 minute phone interview, which puts it in

perspective. To put it short the willingness to cooperate was sparse, and a feedback percentage of

barely 5 % makes it is next to impossible to use the information in a reliable manner. A follow up

was planned in order to increase the response rate, but unfortunately this was declined due to the

fact that some stores had actually called and asked why they had to answer a questionnaire when

they already had more than enough to do with the Christmas sales. In general it was hard to get

useable information, because of classification issues.

The 360 degree evaluation tool was considered but it was found that it would be more useful and

reliable if the store manager evaluated his employees and not the other way around. This also

increases the chance of getting useable feedback, since it only requires the cooperation and time of

one person and not the whole store. Even though it might be a versatile tool, in order to help the

salespeople understand themselves and others more in depth, the time span and resources of this

report would have made it hard to get reliable and useful information.

Only overall financial information was available. The finance of the individual stores were

classified, and only available with the individual store manager’s consent, making it pretty much

impossible identifying good stores in terms of turnover and profit.

The findings of the report will be based on the Danish market alone as this is the only market that is

covered by the Danish headquarters in Søften.

The traditional value chain model was left out, as it primarily focuses on production companies, and

not companies with their primary focus on service as Expert.

The product life cycle (PLC) of a given electronic product is decreasing, due to the fact that many

new products are invented or improved on a regular basis. There is no such thing as a product that

can be guaranteed to live up to new requirements in 5 years (service manager Poul Hansen), as the

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evolution on the electronics market is moving at a rapid pace. This will be briefly touched in the

report.

Customer lifetime value (CLV) will only be discussed briefly in relation to customer acquisition

and retention. The loyalty of the consumer electronics market is perceived as being moderate,

primarily due to the fact that it is easy to compare prices between all the sellers online and pick the

cheapest, but on the other hand some customers prefer to buy in a physical shop to get professional

guidance, and this is where Expert can increase their CLV through very competent and service

minded employees.

The benchmark will be conducted over a fairly short span of time of a little more than 1 month.

Expert has not done an internal benchmark before, so there are only limited and miscellaneous

information available.

1.5. Methodology

The methods used in this project are divided into two main parts; Analysis and suggestions. The

studies will be primarily descriptive and explanatory. In the following section the choice of theory

will be elaborated upon.

1.5.1. Choice of Theory

The service value chain, also called the value shop will be used in order to identify current

problems, and how to deal with them. Through looking at sales channels, service demands, follow-

up, customer retention, control and evaluation.

The competency wheel will be used to assess and identify current gaps in employee competencies,

and how to fill them through careful planning and implementation of a new training model and/or

schedule.

Herzberg’s and McClelland’s motivational theories will be included in the analysis of the leadership

style adapted by the store managers.

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McKinsey’s 7s model has been chosen as it provides a clear overview of the current organization

and is used to identify and elaborate on the soft values in particular as there seems to be an uneven

communication between the main office and the stores.

For identification of Experts training processes and their needs for supplementary training the sales

training model will be used In order to identify, develop, deliver and assess the best training

possible.

Multichannel/cross channel communication will be used to illustrate how Expert can ensure that the

communication reach the intended receivers to increase customer awareness and to find out how

much time and effort the average customer spends acquiring knowledge about a given technology

or product before they visit the store. Additionally it will be investigated how Expert can get

synergy effects from having both online and offline outlets. To illustrate this the communication

continuum will be used.

The business market processes will be investigated in order to understand what value is to Expert’s

customers, then how to create value and finally how to deliver value in a satisfactory manner.

1.5.2. Data Collection

Through qualitative interviews with various Expert employees, primarily at the main office, primary

data will be collected. Secondary data and miscellaneous articles will be collected through the

internet and the various online sources available through Business Academy Aarhus and finally

Statistics Denmark will be used to gather and verify data.

A questionnaire primarily consisting of quantitative questions will be distributed online for users of

expert.dk to answer. The survey is accompanied by a minor competition in order to increase the

amount of answers. It will be online at least for the duration of a full week, as this should ensure a

fair amount of responses which in turn should increase the reliability of the survey.

Additionally Expert had mystery shoppers in all their own stores, as well as 15 Fona stores, the

findings of this investigation will only represent a minor contributing factor to the writing of this

report, due to the fact that the stats are somewhat vague, random and inaccurate because it is based

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solely on one sale with one salesperson, and thus represent the salesperson more than the store

itself.

Furthermore an exit poll was conducted based on 343 respondents distributed on 21 unnamed

Expert stores which measured:

The customers’ reason to visit Expert

Their knowledge about Expert marketing

Evaluation of price, product range, etc.

The behavior of the salesperson

Knowledge and evaluation of the Expert Extra concept

And finally about their loyalty towards Expert

The results were divided into eastern and western Denmark, but in the rest of the report the average

of the 2 will be used.

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2. Internal Analysis

In this part there will be a short description of Expert and its history, and then an analysis based on

the Mckinsey’s 7s model. The last point in this section will focus on identifying and improving the

right competencies.

2.1. History and Development

Back in 1964 (Kaj Knudsen – Expert store owner in Rudkøbing and board member) 40 Jutlandish

radio dealers that wanted to cover all of Denmark – they united under the name SARAC A/S

(SAmarbejdende RAdioforhandlerses Centralkøb). The following year Hardy Larsen was hired as

the very first managing director and in 1967 the name of the chain was changed to Expert. The

following 10 years Expert experienced decent growth, but in 1978 bankruptcy was declared.

Surprisingly, it was actually the beginning of something new and better, as 45 radio dealers

established a new subsidiary which enjoyed growth for many years. In 2002 the franchise model as

we know it today was developed.

Expert has no official mission statement, they do however have a formulated vision, and it is

“Making life easier and more exciting!” Expert wants to inspire and motivate their customers to see

and understand the advantages and possibilities of their products. Through dialogue the focus will

be on how the products can enrich people’s lives rather than talking about technical specifications.

But most importantly is gaining a higher customer retention rate through providing the best service

available on the Danish market, and that is best done through putting emphasis on the customer.

The assortment is quality products covering the areas: Television, sound, photo, phone, computer

and entertainment. Expert has historically been perceived as being an expensive brand, but in the

course of the last few years that image have changed, and the perception of Experts prices today is

equal to those of its competitors (Expert Campaign Manager Peter Kjeldsen). None the less it is

important to excel at customer service before, during and after the sale in order to justify any

perception gap.

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2.2. The McKinsey 7s Model

The McKinsey 7s model consists of hard and soft values within the

organization. Hard values are fairly easy to map, identify and define,

and thus easier to influence. Soft values on the other hand are more

fluent and intangible, and it is strongly affected by corporate culture

and the environment at the workplace.

2.2.1. Strategy

Back in week 35 Expert launched Expert Extra. It is a new service concept that offers the customer

great convenience after any purchase. E.g. if a customer has bought a new TV, Expert offer to

deliver, install and mount it, along with any system the customer might also have bought. In short,

Expert offer to do all the work, while the customer now is able to focus on other things than

technical issues, transporting a big 46 inch TV or hooking up the wires to connect to a console or a

Blu-Ray player.

Every store has to follow the general guidelines created by headquarters. Like always having the

entire G1 product range in the store - the G1 product range are products that are mandatory for all

stores to have at all times. Additionally it is important to have the required items in the store – e.g.

the Expert Extra signs, boxes and offers easily visible, as well as decorations for special occasions

like anniversaries, birthdays and seasonal events.

The stores that do follow the guidelines and suggestions from headquarters and take advantage of

being a part of the Expert brand will have a greater chance of success, than those who spend their

time squabbling (consultant Anders Riksted). On the other hand stores that have built a good local

reputation thrives both with and without Expert guidelines (consultant Ole Evers).

36% of all Danes aged 16-74 has bought an electronic product online in 20101, that equals 1.43

million people. Every fourth Christmas gift of 2010 is expected to be bought online, and the

1 Appendix iii

Figure 1: McKinseys 7s Model

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predicted amount of money spent online in 2010 will be in the neighbourhood of 40 billion kroner

(www.fdih.net).

An extra emphasis is likely to be put on Expert’s online universe in 2011, as they only possess 2‰

of the Danish online market for electronics (Marketing Manager Michael Gade), which is not very

much, especially taken Expert’s physical size into consideration.

The online expansion is being considered at the moment, although nothing has been decided yet.

But if Expert wishes to be a serious player on the online market, they have to take action and invest

the required time and capital. Because as Expert states in their marketing plan for 2010-2012 8 out

of 10 consumers use the internet to gather information about a product, so it very important to be

approachable online as well as offline to answer any and all questions and approaches.

Right now an average month yields 379 orders from expert.dk, and generates in the neighbourhood

of 1 million kroner2 based on January-November 2010.

As of now one of the primary sources of getting a competitive advantage over the competition is

through the Expert Extra concept, and providing the most superior customer service in the

electronics line of business in Denmark. By 2012 it is the stated goal to have a market share of no

less than 17.5 % through improving the 6 P’s (place, price, product, presentation, promotion and

personnel)

2.2.1.1. Communication Continuum

When looking at the communication

continuum model it is obvious that there are

an abundance of ways and opportunities to

promote the Expert brand, but of course it

differs how effective these outlets are.

The model shows that the communication

channels move from impersonal medias like

2 Appendix vii

Figure 2: Communication Continuum

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televison, radio, billboards, magazines and and catalogues, towards a more personal selling which

improves the communication as it becomes extremely personal and creates a dialogue instead of a

monologue. This is exactly what happens whenever a customer enter an Expert store.

At the moment Expert primarily utilize TV, magazines and their own website to communicate, all

of which are impersonal and unadressed, but reach a huge audience. On the other hand they send

out newsletters on a regular basis, which are a little more personalized. The reason that it is only a

bit more personalized, is that even though the recipient has the option to select the categories in

which he or she wants to receive offers, it does not matter since there has not been implemented a

way to separate the categories, so the newsletter is exactly the same for a person who wishes to

receive offers and news about audio and for a person who wants an offer for a new flatscreen TV.

The reason this has not yet been corrected is primarily due to lack of resources.

Additionally the system Globase that Expert use when sending out the newsletters also offer a SMS

solution, but it has not yet been verified that the ROI is positive, which is why it has not yet been

implemented (online sales manager Hanne Bang Vorre).

2.2.2. Structure

Expert employs around 130 people at headquarters and roughly 450 people work in the stores on a

nationwide basis.

The overall guidelines are decided centrally at headquarters in Søften and enforced in the stores by

the various consultants, but micromanagement is run decentrally by the individual store manager.

The overall communication between headquarters and the stores is not as good as it could be. A

common saying at the office is that when business is good the store itself is responsible, but when

business is bad it is because of poor or insufficient marketing.

Through a weekly update on ConnectNU (Expert’s intranet where everybody within the Expert

Danmark organization have access ) the most important and current issues could be addressed. A

problem with the current information flow is that there simply is too much information, and it is

hard to separate what is important from what is not. All the news and information that are uploaded

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should be prioritized, so the stores can manage their time a little better, and skip information that is

not relevant to them.

Another way to go could be to use digital signage updates that automatically change at preset

intervals (e.g. as seen in 7-eleven, just for the employees instead). Through continuous updates

Expert could make it easier for the stores to keep themselves updated with a minimum of hassle.

With a touchscreen monitor it should be easy and fast to navigate the news categories, and thus find

any relevant information with the tip of your finger.

Expert has a flat organization3 which makes the information flow and communication faster, easier

and less expensive as decisions can be made very fast, unlike taller organizations where minor

issues can result in major expenses if handled in a strict manner. E.g. Siemens Windpower in

Brande, where approval of getting a new lamp has to pass several instances before authorisation is

granted, and thus making the lamp an estimated 5-10 times more expensive than its initial price

(Cand. Merc. Supply Chain Management Steffan Hvilsom Bækhøj Jensen).

Another advantage of the flat structure is a higher level of empowerment of mid and bottom level

employees, which ceteris paribus will increase both efficiency and job satisfaction of the individual.

2.2.3. Systems

Today the there are 4 different systems in the stores which makes alignment difficult, but the plan is

that by 2012 it will be reduced to just one main system. Unfortunately it is probably going to be

quite a struggle, since some stores have no expenses with the system they are currently using, and

the system that is going to replace it, is going to cost around 10.000 kroner each month (Marketing

Manager Frank Poulsen Kirk ), but the alignment will ease and quicken the job for many

employees.

Expert has a large intranet where documents, plans and finances are stored and thus always easily

accessible, that is if you have the proper clearance level of course. ConnectNU has lots of

miscellaneous information which is accessible from any computer hooked up to the internet. Here

the stores can compare themselves to each other, read news and an abundance of other things.

3 Appendix ix

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2.2.4. Staff

When talking about staff, it is important to look at both existing employees working in the store

today, but also to have an idea of what might be needed in the future, since it is imperative to have

skilled employees with the right competencies’ for the job for any business to be successful.

Even though the sample is small, 5 of the 6 store managers that answered the questionnaire made it

very clear that they were satisfied with the competency level of their employees. The final store

manager felt that some were good, and some were not. But did not have a plan for how to improve

job satisfaction for those employees lacking the will to achieve, the solution mentioned was simply

firing them, which is clearly not a good option as it is time consuming and expensive to train a new

employee from scratch. A more thorough employment process is advisable to avoid hiring

personnel that does not have the necessary competencies and drive.

The staff in the Expert stores is the arrowheads of the company, and their performance is the

foundation for the perception of Expert. So naturally Expert should invest resources to heighten the

skill level of this area, because when the salesperson fails, Expert has not their job well enough and

is a part of the failure.

In order to properly analyze the competence

level of the employees, the Competency

Wheel has been chosen, as it is a great tool for

this. The model identifies current competency

gaps, and additionally focuses on both

assessing and developing competencies – it

also overlaps into the fifth part of the

McKinsey model - skills.

According to the 6 stores that contributed to

this report, the most important skills for a

salesperson, in prioritized order, are:

Listening to the customer, knowledge about the product and asking the right questions. These 3

primary skills were mentioned as 1 of the top 3 most important skills by 2 or more managers. The

Figure 3: Competency Wheel

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secondary skills, that were mentioned by a single manager, included: Being kind, contacting the

customer fast, being mentally present, having a good connection with the customer, being down to

earth, being a good colleague, being helpful, being on time, uncovering the need of the customer,

being honest and finally being believable.

There is an almost infinite list of competencies that can make a salesperson a better seller, but that

will be elaborated upon in the next section. The primary focus in this part is on assessing step 1

through 3 of the Competency Wheel.

Step 1 – Examine business goals and KPI’s

In order to build and maintain a high educational standard and secure the core values of Expert are

being followed in the stores, it is important that as many as possible attend the courses held by

headquarters.

In 2010 Expert started keeping their courses mainly internal, instead of outsourcing most of them.

But unfortunately the attendance leaves something to be desired. In total the 6 benchmarked stores

accounted for 29 course participations (HR consultant Nikolai Schmidt), where 17 of these were

from a professional fair which cannot really be assessed as professional development, but more as a

presentation of current and future products.

So that leaves 12 visits for 2010, which averages 2 per store. Even though it does not sound like

much, the importance does not necessarily lie within these numbers. The crucial goal is to improve

profit and turnover through more competent employees, not filling the course benches.

Step 2 – Define competency needs

Identify the required competencies – what

does an employee have to be able to do, and

what does the employee have to know in

order to be able to do so. In order for any

strategy to be effectively implemented, it is

imperative that the organization possess a

competent force of employees.

Figure 4: Sales Training Cycle

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As can be seen in the Sales Training Cycle model above, the first thing on the agenda should be to

identify Expert’s training needs. The main objective from an organizational point of view is getting

the employees “upgraded” to the desired competency level. Training is a crucial factor, not only

will it improve the skills of the individual salesperson, and thus turnover, but it also likely to

increase the job satisfaction, as a competent employee is more like to be a happy employee. This in

turn raises the ego part of Maslow’s hierarchy of needs as the professional pride amplifies, and if

the employee is additionally granted responsibility through empowerment it is very likely they will

seek to go beyond what is expected of them in order to underline that they are worthy of the trust

they have been shown.

The training program should at the very least include improving the following:

Communication skills

Sales skills

Product knowledge

Technology skills – future requirements and possibilities of a product

Today it is simply not enough having the skill set to do a satisfactory job, every single employee

must excel in knowledge of their area, whether it is TV, audio or computers. But extensive product

knowledge alone is not by a long shot enough to selling effectively to every customer.

Not all competencies are necessary some might be of minor importance and not worth the resources

and effort put in, in terms of spending time in a classroom instead of generating sales in the store.

Whenever an employee participates in a course, it should have a defined goal, and an explanation of

how and why this course will help them to be more become successful sellers, it is all about

identifying and improving the right competencies. Below is a list of competencies that any

salesperson could benefit from.

Vital competencies: Important Competencies:

Listening to the customer Kindness

Product knowledge Contact the customer fast

Asking the right questions Down to earth

Mentally present/empathy Being a good colleague

Creating a good connection Helpful

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Honest/selling the right product Punctual/reliability

Trustworthy Flexibility

Communication skills Being a team player

Judgement/customer assessment Good (and appropriate) humor

Customer orientation

Knowledge sharing

Presentation skills

Being service minded

A salesperson always needs to act like a true professional towards the customers, take note of the

situation, and act accordingly, because there are no two customers who are alike.

Step 3 – Assess current competencies and map competence gaps

The third step of the Competency Wheel emphasizes the importance of assessing the competencies

of the employees, and focuses on identifying the competency gaps.

So now that we know what competencies are needed, the next step should be to identify the gaps of

the current staff, so it can be figured out if the employees live up to the updated requirements and

then map the areas that need improvement.

This could be done either in the store with mystery shoppers and/or through courses that create

hypothetical situations where the different competencies come in to play and closely monitor the

behavior of the salesperson. Both options are viable in different ways. Mystery shopping could

easily prove be a costly and time consuming solution, but very reliable. Internal courses on the other

hand would be more focused and goal oriented, but here the salesperson knows they are being

tested, and are thus more on their toes which could limit the reliability of any tests performed.

Another option altogether could be self-assessment, where every individual salesperson could rate

himself/herself on all the listed competencies on a 1 to 5 scale. A fourth and final option would be

to let the employees appraise each other through the 360 degree evaluation tool. This alternative

secures a more objective assessment, as people rarely perceive themselves as others do, and with a

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sample of 3-10 (depending on the size of the store) people, the results should have a high degree of

dependability.

It is not possible to force people to come to courses, nor would it be a good idea. Every attendee

should have incentives enough to participate, it should just be communicated in precise and easily

understandable way. The course not only improves their ability to sell effectively, but hopefully

also develops them as individuals and improves career opportunities.

2.2.5. Skills

It is very important that the employees have the right skill and mind set, both in order to represent

Expert in the best possible way, because they are the face of the company to the consumer, but also

of course to be able to sell the right products. Above all it is crucial that the salespersons in the

stores are armed to the teeth with knowledge and skills – because a competent employee is more

likely to be a happy employee.

Step 4 – Plan closing the gaps and implement training solutions

The fourth step of Competency Wheel focuses on how to close the current competency gaps and

includes the second and third part of the Sales Training Cycle model.

In order to streamline the experience the average customer gets when seeking advice and browsing

in an Expert store, the above mentioned list of competencies should be mastered by every single

employee, sales assistants as well as managers, within the next 18 months or whatever time horizon

that is perceived as both acceptable and realistic.

In order to get there headquarters could create 5 courses as a 5 step program to reach the desired

competency level. Human Relations (HR) should develop the training program internally to get the

content aligned most accurately and keep the knowledge within the company, but get external

instructors to tutor the attendees in order to reach the desired goal.

After each of the 5 steps the participants should be able to review their experience in order to make

the program better. Additionally the course should both be taped and uploaded to the intranet

together with a written summary with the main points, where those who have taken the course can

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watch or read the content again whenever they feel like it, in order to refresh their memory.

Furthermore a test comprising of questions solely from the course should be made and uploaded as

well, that way it is easy for the participants to check if they understood the content fully and

correctly. Whether passing the test is mandatory to proceed to the next step, or merely attending is

enough should also be decided.

Now it is time to:

Determine what content to include in the different steps of the programme

Develop the objectives of the course – what should the outcome be?

Determine the programs staffing needs – hiring external lecturers if required

Determine how to deliver the education and make it accessible afterwards

Schedule the training

Where should the courses’ be held – around the country or primarily at headquarters?

As mentioned above it is important to remember to monitor and evaluate the performance of both

the presenters and the participants, in order to continuously improve the course.

Step 5 – Review results

This final stage assess’ the impact of all the previous steps and here it is determined what the

trainings value is to both the individual salesperson and the organization. This is the last part of The

Sales Training Cycle.

This training program fits perfectly into Expert’s core values, as a good service level is of huge

importance in this line of business. It should also benefit each and every one of the salespeople that

undergo all the training phases. But how much do the participants really learn - are the courses

worth the time, money and effort? To what extent does the programme unite and connect with the

training need of the staff?

As mentioned earlier it is very important to get the opinions of those who partake in the courses, as

that is the best way to continuously evaluate and improve it, or maybe decommission the project if

it does not yield the desired results after a predetermined period of time.

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2.2.6. Style

“It has been verified that if we take 2 stores with the exact same conditions regarding geography,

demography, size, etc. The store and manager with a positive attitude towards the guidelines and

campaigns from headquarters will be able to create a profit, whereas the stores and managers that

call and complain about numerous issues and spend their time being negative and indolent, will

have a hard time generating profit” (Chain Manager John Birkemose-Andersen).

The perception of Expert varies greatly from store to store, which is not in line with the purpose of

being part of a chain, a customer should experience the same environment and service level

regardless of which store he or she visits, no matter the geographical location or other variables.

The personality and leadership style adapted of the individual store manager affects the public

opinion greatly. Because a manager that takes care of his/her employees in terms of education,

social thriving, securing a healthy work environment, etc., will without a doubt have a happier staff,

and a happy staff, is much more likely to perform well than a content or unhappy one.

According to Herzberg there are 2 things that influence job satisfaction, hygiene (X) and

motivational (Y) factors. Hygiene factors are factors that prevent dissatisfaction, whereas

motivational factors allow and create personal growth. From what can be derived from the stores

that answered the distributed questionnaire it is fairly obvious that they all believe that a

motivational approach is the way to go, and that is hard to contradict. The way these managers

motivate their employees is through social thriving, responsibility, daily talks, courses, bonus (X),

good work environment, providing good off work experiences, cooperation and competitions where

everybody have an equal chance of winning. All these are excellent incentives for the employees to

do a better job, because not only does it yield a higher job satisfaction, it also provides a feeling of

accomplishment through experiencing that they really contribute to running the store in an efficient

manner. When a salesperson feels he/she makes a difference it is also much more likely that they

want to become better at their profession, and thus increasing the likeliness that they participate in

courses and enter a positive spiral.

Another motivational theory was developed by David McClelland who divided needs into 3 groups:

Achievement, affiliation and power. The achievement factor is relevant for manager and

salesperson alike and can effect whether action are dynamic or stoic. A person with a high

achievement (nAch) level will set goals that are hard to accomplish and require a lot of dedication,

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whereas people with a low nAch level will set fairly easy obtainable goals that they can realize with

almost certainty.

A person with a high affiliation (nAff) level is the equivalent of a person that desires harmonious

relationships with other people, and need to feel accepted. They prefer work that provides personal

interaction, so obviously many salespeople should belong in this category, and preferably the

majority of the employees in Expert stores. People in this category also perform best in a

cooperative environment. On the other hand there are people with a low level of nAff and they are

similar to those with a low nAch level, as they do not seek challenges.

The last element of McClellands motivational theory is power (nPow) which is divided into 2

categories, namely personal and institutional (social). Those with personal power wish to direct

others, and are quite similar to the Herzberg X theory and can be described as laissez faire dictators,

and thus very undesirable. People with institutional power want to organize the efforts of others to

further the goals of the organization and are comparable to the Y theory of Herzberg.

Every store should set their own individual goals in order to improve their performance. These

goals can vary and could include items such as turnover, profit, B2B share, customer satisfaction

level, social events – both internal and external, employee retention and development, a minimum

of sales of TV’s, etc. What is important is that there is something to strive for.

A good tool to use in this context is the SMART model.

Specific – A clear definition of what, why and how the goal is going to be reached

Measurable – The goal must be measurable and concrete to identify success or failure

Attainable – Setting sub-goals so the final goals never seems out of reach

Realistic – Do-able, not easy. Set the goal high enough for the achievement to be satisfying

Time-oriented – Set up time schedule that is measurable, attainable and realistic.

Expert Danmark’s own another major brand - punkt1. Even if punkt1 and Expert have the same

owners, the buying condition varies. Expert has a nationwide exchange guarantee, but it expires

after 14 days, and if the customer comes into a store after 8 days they are only offered a voucher,

not money back. punkt1 also have nationwide exchange guarantee, but they offer the money back

for 30 days.

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2.2.7. Shared Values

Expert's shared values are made up of the 6 previous steps.

Expert was founded on thought of Danish nationwide cooperation and wants to be perceived as a

service minded company with a good product range, approachable and competent employees. Focus

is on being truthful and spot on in their sales as well as being competitive on the price parameter, so

every customer leaves the store satisfied, and remains that way. Value is the cornerstone of Expert.

Value to Expert is service, very satisfied and loyal customers that are being created through

inspiration and motivation (through the mantra “the customer is king”), happy and competent

employees and customer intimacy. At Expert headquarters the corporate culture is focused on

employees are friendly and helpful towards each other, which in turn create an excellent working

atmosphere. The work ethic is high - and it has to be in order to match the work load.

2.3. Part Conclusion

The goal is for Expert to achieve the position of the company in the electronics line of business with

the best and most competent employees, with a high degree of customer orientation and selling the

right products at an affordable price. This should create better and more accurate sales, as well as

generating customer loyalty through excellent service on all levels – before, during and after a sale.

Additionally competent employees are likely to take more pride in their work, and with

empowerment they will go beyond what is expected of them in order to underline the correct

decision of giving them extra responsibility.

Focus on creating and improving the right competencies is of major importance, as spending time

and resources on courses that develop competencies that are not a substantial factor for creating a

successful sale, is equivalent of a complete waste of resources.

Every store should set their own individual goals in order to have something to strive for, whether it

is related to turnover, customer retention or satisfaction or something completely different. The

goal(s) must not be too easily achievable, but should not be too hard either, as that could easily

result in a disappointing experience – every goal should follow the guidelines of the SMART model

to ensure a structured approach.

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The online communication should be improved by utilizing the possibilities that are already

available in the currently used programs, once the resources are available and it has been verified

that it yields a positive ROI.

2.4. Quality Assessment

The information in the internal analysis is based on countless conversations throughout the author’s

internship period at Expert headquarters, and is assessed as having a very high level of truthfulness

and validity.

Due to the limited response rate from the stores, several of the competencies listed in step 2 of the

Competency Wheel are based on the author’s personal opinion, as well as conversations and

interviews with Expert’s consultants and members of the HR department.

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3. The Stores

In this section it will be covered what defines an ideal store. As well as pointing out good and bad

approaches to operating and running a store.

3.1. The Ideal Store

Regarding turnover the stated goal is set at kr. 3.500.000,- per salesperson (consultant Anders

Riksted). As can be seen in appendix 10 none of the stores are even close to that number. Of course

it has to be taken into account that all employees of the store are included in the equation, including

technicians and part time workers, so the actual number is higher than calculated for some of the

stores. The ideal number of employees in a store is not a definite number as it varies with the

physical store size.

What skill level is required or should be set as an absolute minimum? It is hard to say, as it again

varies from store to store. All the major stores, both franchise and retail alike, have employees that

specialize in an area. Whereas the majority of stores in smaller provincial towns have employees

with diverse knowledge, so they can more easily cover for each other in case of vacation or illness.

But some guidelines from HR would make it clearer what is expected from the different stores –

these guidelines should be divided into two groups. Because what might work in a big store in

Copenhagen will not necessarily work in a smaller store in Struer. Both manager and salesperson

should try to visualize the set goal, that way it becomes clear what exactly they are working against.

But what should be aligned throughout the entire chain is the service/sales competency level. What

good is superior technical product knowledge if the salesperson confuses the customer

unnecessarily, and as a result is not able to complete the sale. An example of this is a salesman who

knew his category 110%, but he overanalyzed in his explanations of the customers question, which

ended up confusing the customer (consultant Anders Riksted). Instead he should have been focused

on a solution and a sale.

Stores in provincial areas are naturally smaller than those in Copenhagen, Odense and Aarhus. But

these stores enjoy a higher degree of customer loyalty, both because of less competition and higher

familiarity but also due to the fact that these stores are more on their toes. Because with a limited

customer base it is extremely important to provide a good service and make just the right sale every

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single time, in order to make the customer return next time and talk positively about them and

create a positive perception of the store in the local community. The stores are aware of this, and

that is why many of the more successful stores are from areas where the population is sparser than

in the bigger cities where the competition level is higher. An example of this is the store in Tønder,

who enjoy a very high level of customer loyalty as they provide their customers with excellent

service, as well as being the sole supplier of electronic goods in the area (consultant Anders

Riksted).

Each store should clarify goals and sub goals. That way there is always something to work towards.

As mentioned earlier, it does not have to be financial goals, it could be everything from interior

redecorating to improving sales conversion rates. But it should be done in stages – e.g. redecorating

one section at a time, and several checkpoints in raising the conversion rates. Of course financial

goals are fine, but it does not improve the store in any way. On the other hand some salespersons

might oversell at the end of the month to reach a predetermined quota, resulting in sales that are not

in the interest of the customer. So goals that add no real value besides financial gains, can possibly

backfire and ultimately result in losing a future customers just to reach a set number.

The ideal stores also look inwards, instead of blaming trouble on their surroundings, headquarters

and anybody but themselves. It is always the easy solution to blame others and act like a victim, but

instead of complaining about every obstacle, the store should see it as a challenge, and seize the

opportunity to think creatively. The positive mindset alone can do wonders, since no matter how

dire a situation is, an optimistic attitude will contribute to keeping spirits high, and all things aside

that will reflect the atmosphere in the store, because April showers bring about May flowers.

Roughly translated the store manual distributed from headquarters state that sales is a concept so

wide that is has to be broken down into something tangible, in order to talk about it in a meaningful

way. The word sale covers being a professional wish-maker, which means that you cannot sell

anything to anyone, but we can help them make a good decision.

The ability to understand what value is to the customer, know how to create it and finally how to

deliver it in the best manner is of crucial importance. Whenever a customer enters an Expert store

they should be greeted within the first minute, so they do not have to wait around. If all of the

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personnel are occupied they should at least acknowledge that they have seen the customer. To

understand what value is to the customer we can take a look at appendix 8 which show the results of

an online survey. Products of high technical quality, competent staff, leaving the store with the right

product, friendly and helpful staff, truthfulness and the ability to put the customer first are those that

rank the highest.

Once we know how to understand what value is to the customer it is time for the second step -

creating value. Once the initial need has been clarified it is time find just the right product for the

customer. Through asking relevant questions the range should be narrowed down in order to

identify the product that fits the customers need perfectly. Then it is time to find out if there is more

the customer could benefit from, e.g. if we are selling a TV then it would be a good idea to explain

about how to create synergy effects either through a surround sound system, a Blu-Ray player, a

new console or something different.

The last step is delivering the value. When the product(s) has been chosen Expert offers several

opportunities which customers can benefit from. Through financing the customer can pay at a later

date or in intervals, in order to get more instant liquidity. An insurance that covers all damage, even

self-inflicted, over a 3 or 5 year period should be offered as an option. Finally there is Expert Extra

where Expert can take care of everything post-sale, including delivery, mounting and installing, this

concept offers the customer the highest level of convenience possible.

Satisfied customers are nice, but thrilled customers will generate so much more, both in terms of

goodwill and turnover, so every store should make it their mission to go above and beyond.

3.2. What are The Successful Stores Doing Right

It takes two to create a win-win situation, and for that to happen, the salesperson and the customer

will have to “speak the same language” in order to cooperate in a manner that makes it possible to

identify what is the best solution.

When the salesperson is selling a TV or any product for that matter, it is always important to

underline if there is any kind of insecurity connected with that product regarding future

requirements, as there is no such thing as a future secured product, because as the history of

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MPEG2/MPEG4 signals clearly showed, that a product that is state of the art today, can be rendered

obsolete within the time span of a few years.

Even though that in this particular matter it has yet to be decided if all electronic stores have to

compensate kr. 500,- to the customers that felt ill informed when they bought their TV, it is still of

extreme importance to pay attention to avoid similar cases in the future, as government decisions

can affect the PLC of a given product to a great degree due to the rapid development in the

electronics area.

In the Connect Magazine issue of September 2010 there was a story about the young salesman

Danni Jensen from Expert Lyngby. Danni had made an excellent impression on a customer who

sent her story to CEO of Expert Danmark Lars Christensen. The customer had encountered a

lacking service and knowledge level at several different stores before she encountered Danni Jensen

in Expert. She describes her experience with Danni Jensen as fantastic because he was service

minded, patient and gave her an exceptional professional service. Furthermore she appreciated his

down to earth attitude and focus on finding exactly the right product for her.

In the article Danni explains his approach to selling. A professional presentation of the product

without too many technical terms, as well as assessing the customer’s need right, so time is not

wasted trying to sell something that is not in the right scope. Additionally he tells how the

professional pride and the ability to explain have to create synergy and trust which is important to

make the customer come back, that is why Danni believes that good service is more important than

offering a discount. On a final note Danni adds that it important to be physically ready in order to be

mentally ready, which can be hard during the Christmas sales.

The good stores have self-igniting salespersons. These employees are thrilled about their job, and

always give it their fullest. They are honest and make it their mission that every served customer

leaves the store with the right product, as well as having been offered financing, insurance and

Expert Extra. These salespersons connect with the customer on the right level and provide a service

and experience so good that the customer with a high certainly will choose Expert again the next

time they need an electronic product, advice or service.

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The Expert benchmarked stores in Svendborg and Aars have their own workshop, and are both in

top 2 in 3 out of 4 categories4 and might also have been in the last category if their technicians and

part time employees were not included in the equation. By having their own technicians they can

reduce the average time spent on service significantly, which of course is a major plus, so customers

only have to wait 1 week instead of 4. Unfortunately the tendency is going the wrong way, with less

and less workshops.

There was no definite picture when looking at how much time the store manager spends on selling

in the store or doing administrative work. In Svendborg and Aars which clearly were the 2 best of

the benchmarked stores, the manager respectively spent 60% and 95% of their time selling. On

average from all 6 stores 64% of the time was spent on selling. Time spent selling always gives

additional experience, which the managers can utilize when training and giving pointers to their

employees.

Cooperation between the store and its attached consultant is somewhat related to the perception of

the collaboration with headquarters. But naturally a good mutual relationship between the

consultant and the store is preferable as they this way can spar with each other instead of fighting,

and ultimately help each other to get better at their respective jobs and thus creating the synergy that

is the whole point of the relationship.

A good store draws attention to itself thorough ads in the local newspapers. It is not necessary to

advertise constantly, but instead focus on quality. Aars advertise once a month and Svendborg even

less, but their focal point is on being innovative and gaining the readers’ attention, because often a

standard ad results in an unread and turned page.

5 of the 6 stores have established B2B connections in their local community and the yearly turnover

from these companies represent from 5-20% of yearly revenue, which is a very nice extra profit. If

the store can deliver exactly want to the buying company are looking for there is a good chance they

will continue to buy from them in the future, which could easily generate a great deal of profit.

Once a successful relationship has been established, and the store has gained some valuable

4 Appendix x

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experience, they can start expanding to more companies. A large part of Expert’s product range is

something that is needed by pretty much all companies, from computers and software to everyday

work to televisions and sound for internal presentations. For example the store in Rønde sells quite

a lot to local companies and the store in Ribe has a great servicing of local business.

Internal social events should be held on a regular basis, whether it is going to the cinema, going go-

cart racing or competing in paintball. That way the employees will get to learn to know each other a

little better, and that knowledge can help them in the workplace as they will be familiar with each

others’ strengths and weaknesses, and is very likely to improve the working environment in general.

On the other hand it is very important to find out where the line is regarding how often these events

should be arranged, because if it is too often the participation will likely suffer from it, because the

employees might get fed up, and the preferred intervals can vary from store to store. These events

also help creating a more exciting and attractive place to work, which is important to attract the

right employees in the future, because a store with a good reputation both regarding customer

service and employees satisfaction can pick the best employees instead of settling with someone

acceptable.

The good stores also prepare for the upcoming magazine by being proactive instead of reactive and

always a step behind. This is especially important in the larger cities with a fiercer competition

level. Numerous times during the authors internship period customers wrote to headquarters and

complained about stores not having the promised products Monday morning and sometimes even

refusing to order it home for the customer, which of course is unacceptable and a text book example

of bad service. The good stores have secured a healthy supply of the most attractive products and

are willing to order more if or when it is necessary. The retail stores are very dependant of the

magazines because of the high concentration of competitors in their area. E.g. the store in Kolding

are surrounded by 3 major competitors ElGiganten, Fona and Bilka, so if the salesperson is not

quite sharp enough the customer will get advise at Expert, but end up buying the product from one

of the nearby competitors.

3.3. What are The Less Successful Stores Doing Wrong

Overhyped sellers might come off to strong, and be perceived as too aggressive and untruthful. The

stores that deviate more from the concept and strategies than the successful stores are often

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unsuccessful. These less successful stores are primarily a part of Expert because they have been for

a long time, and also partially because of the marketing. For them there really is not any alternative,

which is why they stick around.

Actively asking the customer about their needs in order to uncover what is the right solution for

them. According to the mystery shoppers, this was lacking way too often. This will in turn result in

customers choosing one of Expert’s competitors the next time they need an electronic product,

because they went home with something that did not fit their needs or they did not fully understand.

Expert make use of pull-ins (good offers from the magazine) in order to get the customer into their

stores. Every pull-in has 1-4 alternative products for up selling/cross selling (Expert campaign

manager Peter Kjeldsen) that offers greater or additional profit compared to the pull-in. If the pull-

in is some kind of combo offer (TV + Blu-Ray), it is important to keep both products in mind, as it

should not be necessary for the customer to bring it up themselves.

According to the exit poll5 only 2 % in eastern Denmark and 7 % in western Denmark were offered

the option to choose an Expert Extra service product. This a major flaw, as it not only generates

profit, but also loyalty and goodwill. E.g. a customer buys a TV, surround sound system and a Blu-

Ray player, and makes full use of the Expert Extra concept, that way Expert install all the products

in a, hopefully, flawless manner. Afterwards when the customer show of his or her new living room

solution, their friends and family will see the job Expert has done, and in turn be more likely to buy

the service themselves, compared to a person who has not encountered it. Additionally the thought

of not having to spend time on setting up the product themselves can affect the customer positively,

if they have a hectic everyday schedule, maybe just feel lazy or simply lack the technical abilities to

create a proper setup.

A story of horrible service hails from a store that was remodeling. It was a chaotic scenery with dust

everywhere, the customer had a hard time getting the attention of a salesperson, but eventually

managed. The customer wanted to buy an article from the current magazine, but the salesperson

was not able to find it, and a colleague added that he knew nothing about it. Instead the customer

5 Appendix iv

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was offered a different and more expensive model, it was an exhibition model and the last in the

store, covered in dust from the remodeling, but despite of this the customer was not granted a

discount. Then when the customer asked to get the product gift wrapped, it was declined even

though both tape and gift paper was clearly visible. The customer then wrapped the gift himself, and

left the store after 30 minutes of frustration.

Far too many salespersons neglect to ask the customer about both financing and Expert Extra. This

is a huge mistake as both options are easy ways to create cross selling and improve customer

satisfaction. Financing may even allow up-selling as the customers do not have to pay right away

and thus is able to buy a product of a higher quality. Some salespeople fail to ask because they are

afraid to insult the customer, but a standard reply to an annoyed customer could include some kind

of courtesy phrase that states that it is just a standard offer given to all customers.

The attitude and willingness to change and the success of the store are closely tied together

(consultant Anders Riksted). Stores that rely solely on a traditional approach to selling and never try

to change or implement something new, will never improve and just fall further and further behind

as other stores evolve. These stores also lack the will to improve competencies through courses, and

cannot utilize the full potential of their employees when they have huge competency gaps.

Additionally the focus on product knowledge exceeds the ability to be a good salesperson, so the

manager keeps sellers with a high level of product knowledge, even though they often fail to sell

because the customer do not understand what they are saying.

As mentioned in the

previous section ads that

catch the eye are important,

but the ad on the right that

Expert Risskov brought in

Århus Onsdag in week 42 is

a text book example of a bad

advertisement. It is literally

littered with spelling

mistakes which gives an

impression of a store that

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rushes things, seem incredibly unstructured and not very credible. This mistake could easily have

been avoided if they had just spent a few minutes looking at the ad before submitting it.

Stores with a large number of households in their geographical area are lacking the service level

many of the smaller stores. This is mainly because they are aware that there are plenty of customers,

so they tend to think what difference does it make, when there is customers in the store all day

anyway.

3.4. What can be Improved

Everything can be improved. Attitude and willingness to change are very important factors in order

to be successful, so the first step should involve initiatives to heighten morale and fight to improve

the negative attitude of some managers.

Expert in Kolding yields a too small margin and lack focus on full solutions, which is costly when

surrounded by competitors. But in the end all it took to double the turnover for one single day was a

sales coach that guided the employees throughout the day (HR consultant Nicolai Schmidt). So an

in-store education of the sales force seems to be an excellent way of approaching competency

enriching training decentrally, as well as an alternative and cost efficient way for the sales force to

learn in praxis instead of advancing through theoretical lectures at headquarters.

Expanding the Expert Extra concept to include classes instead of one on one training could both

lower the price for the single participant, more efficient time usage for the salesperson as well as

help generating a greater turnover. Of course these classes have to gather a minimum of attendees in

order to be profitable, but schooling 5 course members instead of 1, even to a slightly lower price,

will certainly improve revenue.

As an expansion to the regular school period, which focuses mainly on product knowledge, the

sales trainees should also have some dedicated sales academy courses including exams like the

other parts of their school education. This way customer orientation will get a notch upwards, and

focus will be split between a high degree of product knowledge and providing an excellent service

level to each and every customer, thus hopefully replacing the current and outdated view that

superior product knowledge is by far the most important aspect of successful selling.

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As of now there are hardly any career opportunities as a salesperson in Expert. After completing the

traineeship period and becoming a regular salesperson, there is only Assistant Admistrative Director

and store manager left as well as the working hours are not very attractive. So it is very important to

create the best environment possible to create happy employees. Additionally offer them other

opportunities like participation in courses, social events arranged by the chain, and so on.

Many franchise stores do not utilize provision because most of the sales force is S profiles of the

DISC model (consultant Anders Riksted). This mean they have to emphasize softer values and not

focus too much on numbers in the sale as this is not much of a motivational factor for them.

Another approach could be focusing on getting them out of their comfort zone, as this is a superb

way to get them to evolve, but of course this is not something that everyone is going to like, but

then the store should play a little more hardball, because in the end it is the profit that counts, and if

an employee cannot deliver action should be taken.

A hiring manual from headquarters should be able to help getting the right profiles and employees

to work in the store. In the future the stores should focus more on getting other profiles employed,

preferable persons with a high I level and the counselor pattern. They easily connect with customers

and form a light kind of friendship through an optimistic attitude and trying hard to understanding

their needs, which in turn increases trust, credibility and hopefully loyalty.

According to the Exit poll6 47.5 % of the customers were greeted by a salesperson within their first

minute in the store. This number should be increased, and can be done so in a very simple manner.

If the salesperson is busy he or she should at least acknowledge the arrived customer, either with a

nod or a short greeting and let them know that someone will be with them shortly.

58 % of the customers experienced that the salesperson was genuinely engaged in their errand. 43

% felt that the salesperson asked the right questions regarding their needs. 51 % believed that they

got adequate advice. Finally 62.5 % experienced the salesperson as trustworthy and honest. All

these parameters can and should be improved. It is crucial (69-70 % rated this as important or very

6 Appendix iv

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important) for the salesperson to take a genuine interest in the customer in order to make the right

sale. Failure to identify a fitting product for the customer will result in the loss of that customer.

When looking at the online survey conducted7 the performance of the store is lower than the

customer expected in 21 of 26 areas. This is of course not satisfactory. Especially the competency

level of the employees is lacking according to the respondents. A possible explanation could be

some of the problems mentioned above, as Expert put quite a lot of effort into giving their

employees a high level of product knowledge, but if something in the communication between

salesperson and customer is misunderstood, it could lead to the a perception of a lacking technical

and product knowledge.

3.5. The Willingness to Learn

Attitude and willingness to learn are important factors in order to operate a business in a successful

manner. Some managers believe that if they do things the way they always have, things will be fine.

But in reality they lose terrain, because if they are not moving forward they will be overtaken at

some point as their competitors evolve and adapts to the market demands. There is always

something to learn and if a manager possess new knowledge he is better equipped to make the

necessary changes in due time, and with additional knowledge it is also much easier to be

innovative and proactive.

3.6. Store Variables

Some stores have special products like Apple computers, Bose, B&O etc. But surprisingly this does

necessarily add additional value, on the other hand Expert has helped several stores with B&O in

their product range to get rid of these products as they simply did not sell well enough (consultant

Anders Riksted).

A concrete plan for up selling and cross selling is very important especially in relation to offers

from the magazine and all stores even receive a concrete list of suggestions from headquarters. 3 of

the benchmarked stores have a plan for selling in the different categories, so the salesperson is

always aware what products are appropriate for up selling and cross selling.

7 Appendix viii

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3.6.1. Ownership

Service manager Poul Hansen has estimated that around 80 % of the complaints Expert receive

come from the retail stores, even though they only represent roughly 25 %.

As mentioned earlier in the report not many franchise stores utilize provision. That leaves no

financial incentives to try to increase sales, and might end with indifference towards the sale of the

product. Also all the service products are neglected which means that the average basket size easily

could have been bigger.

Retail managers have no financial incentive to generate more sales as their salary stays the same no

matter the turnover. Franchise owners on the other hand have to live of their sales, so naturally they

are willing to put in a greater amount of effort and work, e.g. Jan Sabroe Thomsen store owner and

manager in Svendborg spends a whopping 50-55 hours weekly8 in his store and he is always trying

to find new a innovative ways to increase sales and utilize his experience in creative ways.

3.6.2. The Manager

As stated earlier the manager is the single most important aspects of a store. Is he a positive person

with a “can do” attitude who tries to continuously renew him- or herself and being innovative? Or is

he on the other hand the negative archetype who complains every chance he gets over minor

indifferent issues, instead of trying to do something positive and economical responsible with the

resources at hand. Almost every aspect of success depends on the store manager.

The manager in Varde is always ready to seize an opportunity and create changes if he sees a

possibility. Furthermore he makes sure his employees become complete salespersons through daily

internal coaching, that way he makes sure they are skilled in all the desired areas (consultant Anders

Riksted). It is managers like this that generate profit and contribute to a positive perception of

Expert.

Age and experience are not as important as a positive attitude according to all the consultants.

8 Appendix xi

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3.6.3. Number of Staff Members

Wages of all employees, including the manager must not exceed 11 % of the stores turnover. That

makes it very important that every member of the staff generates the required sales in order to keep

up with their quota. Careful planning must secure that staffing is sufficient at all times so customers

do not have to wait around for too long before getting served. But on the other hand it is equally

important that the staffing does not exceed what is necessary, because a salesperson standing and

waiting for a customer is equivalent of wasting money.

3.6.4. Surrounding Area

Expert was originally primarily based in the province, and did not own stores in the major cities, but

after purchasing Merlin, Expert is represented pretty much everywhere in Denmark.

Convenience and proximity are important in smaller communities, whereas the areas with many

households the greatest focus is on the price due to the high level of competition. This can hit some

stores very hard. An example is from Kolding where they currently are working are changing most

of the product range, because if they try to match the prices from the local ElGiganten store, they

will get very little or negative profit, so they have to identify the products where they can offer a

competitive price.

3.6.5. Activities and Involvement in the Local Community

A good way to create goodwill is through involvement in the local community, and this can be done

in numerous ways. A common and popular way to show interest is to sponsor local sports teams.

But different activities like cooking in the store and offer all visitors a portion, hosting yearly

tournaments in golf, football or other sports will give the store positive attention and most likely an

article in the local newspaper. Other activities could include having a Kinect or Move (Xbox 360

and Playstation 3 add-ons) competition, both to get people into the store, but also to generate

awareness about the product and let people try it out for themselves. This could also be a national

completion where the winners from the different stores meet in a grand finale to compete for prizes,

where the audience can watch it live in the store or maybe stream it live from the Expert website.

Local and national CSR is worth considering. Even though the line of business Expert is in is not

exactly the obvious choice to work with environmental issues, since all the products consume

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power, it is possible to make a little difference with a wholehearted effort. An approach to this

could be to provide advises to the customers, with information regarding how to save power

through special sockets, that does not use power when the electronic product is off, and possibly

selling them in the store. Another way could be by dedicating a day to cleaning a local forest and

inviting the locals to help, because not only does it signal that they care, but also serves as a good

opportunity to bond with the community in a less formal manner. It is important to keep in mind

that it must be done full heartedly or else it could do more harm than good if the project comes of a

more of a stunt rather than genuine interest.

3.7. The Stores

This section will cover what distinguishes the

good stores from the not so good, and what

initiatives these stores could utilize in order to

identify their weak spots, should they not be

aware already. Also the service value chain

will be used to show how to create value from

problem recognition to solving and evaluating.

3.7.1. What Separates the Efficient From the Less Efficient Stores

When a successful store encounters a problem within reasonable limits they will immediately start a

problem solving process in order to continuously being able to provide superior service. It could an

unsatisfied customer that returns with a broken product, then the store must assess whether the

problem is their responsibility or it may be mishandling on the customers part. Afterwards they

must choose if they are going to fix the product or inform the buyer that the flaw is due to his/her

own neglecting of the product. If the store opts to repair they will send it to the repairman if they do

not have a workshop of their own. The final step is to uncover why the product was damaged in the

first place, and devise a plan how to avoid it in future scenarios.

As mentioned several times the manager is the overshadowing influence when it comes down to the

success of a store. Managers that reward their employees, create a positive working environment,

focus on satisfied customers through the right sale and always try to exploit new opportunities when

they appear will ceteris paribus have a greater chance of success.

Figure 5: Service Value Chain

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3.7.2. How to Make the Less Effective Stores Better and More Efficient

The values from the successful stores should be transferred to those that have a hard time generating

profit. A change in attitude is the first step to turn less thriving stores around, and Expert should

ensure that action is taken in order to achieve this, because at the moment it is accepted that some

stores run their own show, and deviates from the overall concept. This will be elaborated upon in

section 3.9.

3.8. Utilization of Customer Relationship Management

Proper use of CRM will increase CLV and it is 10 times more expensive to win a new customer

than keeping an existing one, plus the cost of bringing a new customer to the same level of

profitability as a lost one is 16 times higher (Hollesen, 2010, p. 10).

Only Frederiksberg and Aars of the benchmarked stores utilize CRM, unfortunately it was not

explained how they approached it. One way of doing it could be to save the information from a sale,

data like the name of the buyer and what he/she bought. Using iPads in the sale is something that

Expert is working on implementing at the moment. This can be used in connection with CRM if the

iPads can access customer information while being used in the store, that way the salesperson can

find user data on the customer to find out what they have purchased in the past, and in that manner

find products that can work in synergy with those.

Also a better utilization of the newsletters, where those who have subscribed can choose the

categories of their choice, and thus only receive offers that is in their interest. When the stores have

local offers they can also benefit from this by sending them to subscribers in the vicinity.

Additionally these subscribers can receive special offers that are available only to them as an

incentive to sign up for the newsletter.

Through Facebook it is also possible to gather “fans” of Expert, and expose them to products in

regular intervals, and give them offers that only apply to members of this group. These members

can also be used to gather useful information about a great many things, like preferred TV brand,

which computer game they are looking forward to or what their perception of Expert Extra is.

Furthermore it is a good way to connect on a more personal level through questions that not

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necessarily are tied to business, e.g. what is their New Year resolution for 2011 or what they think

of Denmark’s performance in the latest football match.

3.9. How to Deal With the Problematic/Hostile Stores

When a store manager calls and complains time and time again, reject to cooperate with his

appointed consultant and refuse to use the materials that are given to him, e.g. a store declined to

utilize the Expert Extra concept at all, then action should be taken. Some managers are impossible

to make happy and are generally unsatisfied no matter what and waste not only their own time, but

also those who have to listen to their constant criticism. Such behavior is not acceptable, and a

reprimand should be given, as it offers nothing but trouble and nothing constructive. If the

reprimand does not alter or improve the attitude expulsion could be used as a last resort, but

hopefully that will not be necessary.

When looking at famous franchise chains the common denominator is streamlining. Whenever you

enter a McDonalds or a 7-eleven you get the same service, treatment and products every time, with

Expert it is inhomogeneous and a little like playing the lottery if you pick a random store. The

stores that do well should be left alone, but those that contribute mostly with negativity should be

critically assessed to find out if they are worth keeping, or Expert is better off cutting them loose.

Alternatively a smiley system with 5 levels could be developed. A level 1 smiley could illustrate

that store barely lives up to Experts values, whereas a level 5 smiley shows that the store is

perceived as being of the highest quality of Expert itself. If having the smiley both online and in the

store was mandatory the managers would have to shape up or accept the poor branding. Of course

this could also lead to stores leaving the chain, which obviously would have a negative financial

impact when thinking short term, but in the long run the quality and perception of Expert will

improve drastically and as a bonus, time can be spent in a much more constructive manner.

3.10 Part Conclusion

To run a successful business it important to have competent employees, that not only possess

product knowledge, but also know how to identify the needs of the customers and act accordingly in

order to sell the perfect product every time.

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Different guidelines for rural and urban stores should be developed, as what works in big cities

might not be as successful in smaller communities.

Individual goals should be set by every store so they have something to strive for, these goals

should have checkpoints so the next step never seem out of reach. The goals could include

expanding into the B2B market to increase revenue or steadily improving the skill level of all

employees.

The manager should try his best always to radiate a positive attitude to inspire his/her employees to

do the same, and thus creating a comfortable atmosphere in the store. When a problem emerges a

good manager will perceive it as a challenge and use the opportunity to create something positive

from it. Ideas to make Expert visible in the community through local initiatives like hosting sports

tournaments.

The 2 examples of good and bad customer experiences illustrates the huge difference an appropriate

service can provide. A more aggressive approach towards the stores that provide nothing but

complaints and negativity should be taken in order to provide Expert with a higher level of quality

and improve the perception of the chain as a whole.

3.11. Quality Assessment

The amount of useful data available was very limited, which led to parts being based on

assumptions. Only 6 of 104 stores opted to answer the distributed questionnaire, so the results can

hardly be called representative.

Consultant Anders Riksted participated in a questions and answers session which was very helpful

and assessed as being of the highest quality as he spends most of time working with the stores.

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4. Knowledge, Skills and Attitude

In this section the author will try to identify all the crucial capabilities of both the store managers as

well as their employees, as well as pointing out which skills are less desirable.

4.1. Identification of Crucial Skills for the Store Manager

A manager must have extensive experience and knowledge of the electronics line of business, in

order to being able to run a store in a successful manner. This knowledge is acquired primarily

through working on the floor where countless sales has given the experience and knowledge

needed. With this knowledge the manager can share and help educate, coach and develop the

personnel, and help them to becoming better and more complete salespersons.

Leadership skills are extremely important when having the responsibility for creating a thriving

store. Since no one can be everywhere at once the manager must be able to delegate responsibility

and empowering those employees that are deemed able to handle it. Motivational skills are essential

in order to make the whole staff perform at their highest level constantly. When times are tough as

they are now, the manager must strive to create a unity in the store, a way that all staff members feel

as a part of a winning team, a team that has its own little community and helps each other out no

matter what happens. Proactive planning is a valuable skill in order to always being one step ahead

and facing challenges prepared instead of having to react. A manager must also be able to make

hard decisions when it comes down to running a profitable store, this could for instance be laying

off personnel or being willing to take a calculated risk when the opportunity arise.

As mentioned countless times another important aspect of being able to run a successful store is a

positive attitude and willingness to change, adapt and evolve. The ability to turn a problem into a

challenge or opportunity instead of dwelling at the negative aspects is invaluable. The personality

and mood of the store manager affects all their employees, and they should always be aware of that.

4.2. Identification of Crucial Skills for the salesperson

The competencies of the salespeople have more or less already been described in the second step of

the Competency Wheel in part 2.2.4., so this section will just elaborate a little.

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As with the store manager, extensive product knowledge is expected and required in order to find a

suitable product for every customer.

Quick wits and a sharp tongue are major advantages when selling. The ability to respond fast and

accurately to customer objections, questions and unexpected problems instead of hesitating and

mumbling is an invaluable skill. Unfortunately this kind of emotional and social intelligence is next

to impossible to teach, so it is quality to be take note of at a job interview. Being polite and

approach the customer in a courteous way to signal professionalism is the best way to start a

conversation to identify what the customer might be looking for. After the introduction the

salesperson must use his/her situational awareness to find the appropriate communication and

presentation style, as it differs greatly whether they are dealing with a male teenager or a female

senior.

A positive attitude is, as for the manager, very important for the salesperson. If the customer is

greeted by big smile, the following conversation and need identification will run a lot smoother.

Furthermore a smile radiates assertiveness, which is comforting and reassuring for the customer.

Situations where there are several people waiting to be served, or maybe a difficult customer that

show signs of aggressive behavior and ask questions that the salesperson do not know, then the

ability to keep a cool head is important, to avoid becoming nervous and frustrated, which lowers the

quality of the work.

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5. Plan of Action/Store Guidelines

First of all these suggested guidelines is not meant to be definite, but mainly serve as inspiration to

how Expert can improve their current situation. It is rarely a good idea to force anyone, so in

cooperation with the stores Expert could identify areas of common interest.

In order to find out how both the manager and the salespersons use their time in the store, they

should fill out an activity log every day for a month9. That way they can map and analyze how they

spend their time in the store and find out if they are using their time efficiently, or if some changes

have to be made in order to improve the utilization of their hours.

On a regular basis, preferably once a month, every member of the sales personnel should have a

short conversation with the manager to identify what went well, and what could have been done

better in the period, and it additionally serves as a kind of performance measurement. It also offers a

great opportunity for self assessment and the manager can give pointers to how he/she would have

handled the situations that did not reach their full potential.

Every member should clarify some goals they wish to reach at a certain time. It can differ from

person to person, but it is important work towards something and not just getting by. These goals

could be on a daily basis, e.g. “I want to sell for at least kr. 100.000,- today” or a goal for the week

like “It is my goal to provide the best service to thrill my customers, and make me feel good about

myself” or it could be a long time goal as “Within the next 2 years I want to get promoted and

acquire new competencies”. But the overwhelming purpose of this is not necessarily the goals

themselves, but instead having something to strive for and a plan of how to get there. This should

also contribute to developing the personnel, so they become more than walking and talking

technical encyclopedias.

“Making life easier and more exciting” is Expert’s vision statement, this has to be obvious to the

customer through putting action behinds these words. Always telling and showing how a certain

9 Appendix i

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product can provide something new, and illustrate how the experience form the product surpasses

the product the customer already have at home, and to what extent it is possible to create synergy

with other products from Experts range and thus creating individual customer solutions.

A training program with 5 steps much similar to the suggested smiley system, could be developed.

The salesperson has to pass the first course in order to proceed to the second step and so forth. The

level reached could be put on the salespersons name badge, which could work as an extra incentive

to participate in the courses. Of course this should not be implemented before all employees have

had a chance to take these courses, so from when the initiative begins until being put into action in

the stores, there should probably go no less than 18 months. This kind of centralized training is

important to both create alignment and streamlining, but decentral training both from the manager

as well as external teachers, with the Kolding case in mind, is at least equally important.

It is important for managers never to settle with the current situation, whether it is good or bad, they

must always look for opportunities to sharpen the blade to remain competitive. It requires a

continuous effort to stay at the top once it has been reached, actually it is often harder to stay at the

top. A way to generate new ideas could be through a monthly brainstorm in the store, where

manager as well as personnel sits down and discuss any and all thoughts they have had since their

last meeting. Should a store hit a gold vein with one of their initiatives it could be copied and

transferred to the all of Experts stores. These initiatives must be well thought through and equally

well executed to be successful, as a halfhearted effort will certainly fail.

Happiness and loyalty of the employees are crucial factors for any healthy business. That means

that the store manager must create a positive and healthy working environment. Taking the staff out

for dinner, a football match with the local team or something entirely different, what is important is

that they do it together and have a good time, which in turn hopefully will get the employees to

bond and creating closer relationship in order to make Expert a more attractive place to work.

Furthermore it is advisable to always promote from within when the need arises, because not only

does the managers know what they get, but also lets the employees know that their hard work can

pay off.

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The store manager should try to incorporate some valuable traits into his/her personality as well as

his/hers approach to running a store. Change starts from within and the abilities to be proactive,

being one step ahead and paying attention to the market trends are very valuable and in order to

being a part of the change instead of adapting to it. When a new campaign is being thought through

it is imperative to state a meaning and an exact goal for the project, in order to keep on track

throughout the process. Because when a goal is visualized it becomes more tangible and thus

making that path clearer and more shows exactly what they are working against.

If Expert can create a dyadic relationship with their customers they have come a long way because

as punkt1’s old slogan states it is important to create win/win situations, and that is something

Expert should strive for as well. A win/win situation will contribute to raising customer loyalty and

keep them coming back to get Expert advice, counseling and products, and consequently creating

synergy effects.

Every sale should include 3 mandatory steps for the salesperson to offer the customer, namely

Expert Extra, financing and insurance - this is lacking heavily at the moment. One of the reasons is

that if the salespeople would not make use of the offers themselves they often opt not to mention

them, and as a result countless risk free opportunities for cross selling, and turning an easy profit,

are neglected.

Financing should be mentioned during the product presentation, and the advantages explained in a

short and simple manner, e.g. with a limited budget the customer can afford higher quality and even

if money is not an issue then financing offers higher immediate liquidity. Another benefit of

presenting the option to the customer is that they are often financially stronger than those who ask

themselves. Expert offers 3 different financing alternatives so there is something for everybody.

Expert Extra should also be mentioned during the presentation to create attention, and once the

customer have settled for a product and reach the counter, the salesperson should show some

examples of the concept and underline the convenience attached to it. The price of Expert Extra is

often perceived as overly expensive, in order to change that that view, the salesperson should

explain why the price is what it is. On ConnectNU there is a humorous and entertaining

walkthrough of the different insurance opportunities, a similar walkthrough should be made for

financing.

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The closing part of the sale should include mentioning and explaining the benefits of an insurance.

This covers pretty much everything, including damages that are caused by the user itself, like if the

kids play Wii a little too aggressively and one of the controllers end up breaking the TV screen.

These 3 cross selling options should be thoroughly explained and their benefits underlined, because

that is the best way to illustrate the value of them. If the staff remembers to offer these 3 options

with every sale, then the basket size is bound to increase. Store manager in Jyderup Anders

Baagland has created a list of the products that are available for cross selling in the different

categories10

and he rewards his personnel for remembering to offer everything relevant on the list,

and as a result the basket size has increased significantly (kr. 707.496 in September alone)11

. So

hypothetically - if the other 103 stores had a similar increase in basket size, and an equal amount of

sales every month, the turnover would increase by more than 882 million kroner.

Expert has recently started focusing on improving their Trustpilot12

score, primarily getting reviews

from online sales. That should be expanded include the sales from the physical store as well. A way

to approach this could be by acquiring the email address of the customer after the sale, and then

send an automated mail to them one month later and ask them to review their experience on

Trustpilot, and maybe giving them an incentive through a competition. These reviews will

(hopefully) increase the current score, but also contribute to identifying weak spots.

10 Appendix vi 11 Appendix ii 12 Online review homepage

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6. Conclusion

For Expert to continuously improve it is important that the stores never settle for okay, but always

tries to excel and thrill the customer, both in order to sell exactly the right product every time but

also to generate happy customers and goodwill.

In order for Expert to heighten their salespeople’s desire to improve their competencies they should

focus on both the professional pride and soft values. When people take pride in what they do, they

always want to perform at their highest level. Also, when working in a healthy environment it is

easier to focus on bettering competencies, rather than focusing on the negative aspects. When being

granted responsibility and empowerment the salesperson wants to live up to the trust they have been

shown, and thus giving their best in all possible ways.

A positive attitude is crucial to succeed, being able to create a challenge from a problem rather than

dwelling on the negative aspects. A manager should always share experience and give good advice

to the staff, as well as having good leadership and motivational skills. A successful manager also

arranges social events to get the employees to bond and feel like a unity. The salesperson should

have quick wits and a sharp tongue in order to respond accurately and appropriately to troublesome

customers in a polite manner. A smile goes a long way and shows assertiveness which is comforting

for the customer.

When stores spend time being negative and complaining it takes time away from being productive

and effective. That time could be spent on something constructive instead, like generating new ideas

and mapping gaps in management and competencies. More energy should be channeled towards

being proactive and identify trends at an early stage, instead of reacting at a later point. Maybe

Expert should play a little more hardball with these stores in order to create a streamlined

perception of the chain, like the major franchises McDonalds and 7-eleven.

Stores that enjoy a high level of success are those that take a positive approach and continuously try

to improve their performance through numerous initiatives and activities. They also utilize the

products and services at their disposal, remembering to offer financing, Expert Extra and insurance

to increase cross selling profit, customer satisfaction and loyalty.

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Francis, G. & Holloway, J. What have we learned? Themes from the literature on best practice

benchmarking [Online]

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Irwin, B. Benchmarking do’s and don’ts [Online]

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FieldSCV.com White Paper – The Service Value Chain [Online]

Available at: http://www.fieldsvc.com/Files/White%20Paper%20-

%20The%20Service%20Value%20Chain.pdf

[Accessed 26-11-2010]

Books:

Kotler, P. & Keller, K. 2009. Marketing Management. 12th ed. New Jersey: Pearson Prentice Hall

Hollesen, S. 2010. Marketing Management – a Relationship Approach. 2nd

ed. Harlow: Pearson

Prentice Hall

Anderson J.C., Narus J.A. & Narayandas D. 2009. Business Market Management – Understanding,

Creating and Delivering Value 3rd

ed. USA: Pearson Prentice Hall

Websites:

U.S. Office of Personal Management, 2010.

Online - Updated 3 December 2010

Available at: http://www.opm.gov/

Accessed 7 December 2010

Foreningen for Distance- og Internethandel, 2010

Online – Updated 15 December 2010

Available at: http://fdih.net/media/556131/rapport%203%20q.pdf

Accessed 16 December 2010

Expert, 2010

Online – Updated 17 December 2010

Available at: http://www.expert.dk/da/Toolboxmenu/Nyhedsrum/Om%20Expert%20Danmark.aspx

Accessed 18 December 2010

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Henrik Aabo Christensen

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Mindtools, 2010

Online – Updated 2010

Available at: http://www.mindtools.com/pages/article/newSTR_91.htm

Trustpilot, 2010

Online – Updated 17 December 2010

Available at: http://www.trustpilot.dk/

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8. List of Appendices Appendix 1: Activity Log i

Appendix 2: Basket Size ii

Appendix 3: E-Trade iii

Appendix 4: Exit Poll iv

Appendix 5: Mystery Shopping v

Appendix 6: Har vi glemt noget? vi

Appendix 7: Online Sales 2010 vii

Appendix 8: Online Survey viii

Appendix 9: Organization Plan ix

Appendix 10: Store Stats x

Appendix 11: Store Managers xi