Performance Analysis: Increasing Retail Wine Sales By Nadia Zaid

Introduction
Mendoza, Argentina is a large producer of wine. The region has been likened with wine producing giants such as Napa and Tuscany. The wine industry is very profitable for those who are able to capitalize on the growing tourist population in a competitive manner. A vinoteca (high-end wine shop) in Mendoza is faced with an interesting problem. They have a client base of locals that consistently come to make their wine purchases. Recently they started contracting with several local tourism agencies to be a stop on their daily tours. Two to three times per day, groups of 20 to 30 people flood into the store and are there for 20 to 30 minutes. There are two sales people and a cashier present during these times. The quandary is this, while foot traffic in the store has increased drastically, sales have not gone up as much as the owner anticipated. Hiring additional sales people is not an option as the owner doesnt want an add itional person standing around during the other six and a half hours of the day when tour groups arent present. The audience for this Performance Analysis is the sales people (SPs). The focus will be on how to increase sales during 20-30 minute bursts of business. The analysis will: Describe the optimals versus the actuals as decided upon through observation, and interview Pinpoint causes for the gap between the optimals and the actuals Present recommendations for a Solution System based on the identified barriers to optimal performance

Sources
Sources for this analysis include the owner of the vinoteca, the eight sales people, and a Subject Matter Expert (SME) on retail wine sales and wine knowledge. Discussions with the owner clarified the goals, and assisted in later definition of optimals, actuals, and gaps. Six hours of observing interactions between SPs and customers as well as interviews with all eight SPs clarified the actuals and gave valuable insight into existing gaps to performance. An SME was consulted to solidify the optimals. He is considered an expert due to five years spent in retail wine sales and current success selling wine on the international market. Additionally, I drew on my five years of experience selling wine in high end restaurants as well as my one-anda-half years of experience working in sales for a wine and liquor distributor. The audience for this Performance Analysis is the sales people (SPs); a group of eight female Mendocinas between the ages of 19 and 24, most of whom are students. All speak English at a level of intermediate or higher. For five of the SPs this is their first job. Two worked in retail before, and have one to one-and-a-half years of work experience. One has previous work experience but not in sales. All SPs have worked at the vinoteca for eight months or less. They are a charming and outgoing group of young women who, are great at customer service (i.e. are friendly and courteous to customers) but are unsure how to sell.

Optimals and Actuals

The optimals, as outlined in the chart below, were determined through a combination of observation/data collection, and interviews. The Optimals define successful performance with respect to the goal to Increase sales during 20 -30 minute visits from tour groups.
EDTEC 540 Nadia Zaid

Optimals SP will make contact with at least six customers. SP will limit interactions with customers to four minutes. SP will be able to state facts and answer questions about wine that are pertinent to guiding customers to a selection resulting in a sale.

Actuals SPs are making contact with two to four people. SPs are spending an average of seven to ten minutes with customers. Eight of eight SPs are able to list random interesting facts about various wines (i.e. the name Renacer means rebirth in Spanish). One out of eight was able to answer questions about general wine knowledge (i.e. characteristics of malbec vs. merlot) pertinent to guiding the customer to a selection Aside from opening questions such as Is there anything I can help you find? seven out of eight SPs were unable to state questions that could be asked to help a customer make a selection.

SP will be able to ask questions that will illicit information that will aid in guiding the customer to a selection.

Defining the Gaps

The table below outlines the existing barriers to optimal performance as well as implications as to why the gaps exist. Driver Skill/Knowledge Identification of Customer Needs Implication Sales people do not know how to pinpoint customer needs in order to guide them to a purchase. Determined through observation of customer interactions and role play. Sales people do not know how to make a sale in an efficient manner. Six out of eight SPs stated that they are uncertain how to shorten their contact with customers, while two stated that that they were unsure because they never tried and just like to talk to people. There is so much information and so much to know about wine that all eight SPs expressed that they didnt know what would be helpful to know. Seven out of eight SPs expressed that they do not feel confident about selling wine due to lack of sales knowledge as well as lack of wine knowledge. All eight said they perceived value in having both skills. Incentive isnt big enough or immediate enough. Sales person of the month (based on number of units sold) is posted in the break room. Six of eight SPs stated that they never pay attention to how much they sell while the remaining two said that they check once a week as a friendly competition between them. Six out of eight stated that having their name posted as sales person of the month was fun to see (statements varied by person but all communicated the same sentiment) but not enough incentive to change their behavior. All SPs are aware that the owner wants them to sell more but are unaware of how much more.

Speed of Sale

Too Much Information Motivation Lacking Confidence Incentives

Insufficient

Environment

Unclear Expectations

EDTEC 540

Nadia Zaid

Language was ruled out as a barrier by conducting interviews with SPs in Spanish and English. For example, when asking questions to determine wine knowledge, first the question Can you tell me three ways in which Torrontes and Saviogn Blanc are different? was asked. Seven SPs could not answer the question in Spanish, therefore I knew that it was a wine knowledge barrier and not a language knowledge barrier. The one SP who was able to answer the question, I asked if she could tell me the same information in English. She was able to, therefore ruling out language as a barrier.

Solution Systems
Based on the identified drivers and gaps in performance, the solution system to be provided to the SPs includes the following: The three skill/knowledge gaps will be addressed with a job aid as well as a brief training on utilizing the job aid. Additionally, the job aid will provide support adequate to augment confidence. Additionally a web based interactive training module on wine knowledge pertinent to making a sale will be designed. Employees will be paid an hours wage to complete the module on their own time and the office computer will be available for use if SP does not have a computer at home. An incentive structure will be put in place that will give commissions to SPs performing at or above expectations. The incentive structure was decided upon based on conversations with SPs in which all eight clearly stated that any monetary incentive would push them to sell more. o The owner agreed to the incentive structure after presented with information showing how much a small investment in the employees could potentially boost his sales. A staff meeting will be held to clarify expectations. SPs will be informed verbally of sales goals and the new incentive structure. They will also be given a one-sheeter to take with them and refer to as needed. A sign stating sales goals and incentive structure will be drafted and hung next to the time clock. Role for Job Aids Objective: Given a job aid and a customer, SP will be able to ask questions that will guide the customer to a selection(s) in four minutes or less. The purpose of the job aid will be to streamline the sales process and provide SPs with a tool to pare down wine information to that which will help the customer make a decision. The job aid will be designed in a manner that will break down general information about wine into a flow chart style. It will give the SP a starter question to ask, the answer to that question will then point them towards the next question to ask. After the final question the SP will be able to direct the customer to the area of the store containing that type of wine and will explain to them that each section is further broken down into pricing, based on the shelf that the bottle is on.

EDTEC 540

Nadia Zaid

Your Score: 98 Introduction - 10 points: 10 Points Introduction provides a successful description of the problem faced and establishes a clear purpose.

Sources - 10 points: 10 Points Clearly describe the audience and list other sources you consulted to collect the information presented in the performance analysis.

Defining the Gap - 20 points: 19 Points Your report includes clear definitions of optimals and actuals, as well as differences between the two. More in-depth explanation about how you determined your gaps from the given optimals and actuals would enhance your analysis. Optimals minus Actuals = gap.

Causes and Solutions - 20 points: 20 Points Your analysis successfully attributes cause to the gaps. The solution system is wellmatched to the identified causes. An excellent job here!

Role for Job Aids - 10 points: 10 Points Report is contains tentative objectives to which job aid will be designed.

Writing and Organization - 20 points: 19 Points The analysis report is well-written and successfully communicates results. Remember to scaffold things for your reader so, introductions to sections before putting forth a table. Help the reader transition from one section to the next.

EDTEC 540

Nadia Zaid

Complexity - 10 points: 10 Points The report is of appropriate complexity for EDTEC 540 purposes. An excellent first performance analysis! The result demonstrates a obvious understanding of the analysis process and each driver category.

EDTEC 540

Nadia Zaid