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Jun 28

Common mistakes made when calculating payroll costs

Posted by Axis CPA Group on Wednesday, June 28, 2017


 
 


Guest Post by Go Roster

Knowing what your payroll costs are – daily, weekly, monthly and yearly – is an important part of running a successful business.

But do you know the TRUE cost of your roster? 

The mistake we often see is the assumption that payroll costs are only based on the number of hours worked by your staff x their hourly wage. This is a dangerous trap, as it only provides you with a snapshot of your TRUE payroll costs.

To get the whole picture, other factors must also be considered.

Holiday pay accrual

Your employees might not be taking a holiday this week or even next, but as a business you still have to pay them holiday pay as a percentage of their wages. It might seem incidental but it can quickly add up.

Salary and ‘backroom’ staff

It’s not just your front of house and kitchen staff that you need to pay. Don’t forget about your hard-working, administration staff – their salaries need to be factored into your overall wage costs too. And if the owner is taking a wage from the business, that’s another staff cost that needs to be accounted for.

Non-wage related costs

Every employer has obligations to pay levies on behalf of its staff to ACC or Medicare, as well as contribute to superannuation funds, like Kiwisaver. You may also have additional costs to pay, such as an employee clothing allowance. It can be easy to forget about these costs, as they often aren’t paid weekly, but they can push your wage costs much higher than you think.

Jun 27

Why Accurate Costing is Vital for Success

Posted by Axis CPA Group on Tuesday, June 27, 2017


 


Guest Post by Unleashed

Inaccurate information about your company’s expenditure can greatly inhibit your capacity to make and maintain a successful business.

Accurate costing information enables managers to measure profit, so that they can make the best decisions for the company’s future. Below, we summarize precisely why accurate costing is so crucial to the success of any business.

Accurate costing helps businesses stay competitive

To be as competitive as possible, you need to understand exactly how much your company spends on any given asset. This way, you have a reliable means of setting competitive sales prices that will encourage profit and attract consumers. Inaccurate costing information may lead to mistakenly setting lower sales prices relative to your expenditure, which ultimately decreases profit.

Inaccurate costing information may even put you at risk for charges of predatory pricing practices. If you have inaccurate information about your expenditure, you may mistakenly set sales prices at a lower amount than costs. In some places, this merits legal action, and a business can be sued for using artificially low prices in attempts to drive competitors out of business. Accurate information about costing will help to protect you against costly mistakes like this.

Making smart choices

Some of the most important business decisions you will make will be heavily influenced by cost factors. In these situations, you will often have to choose one alternative over another, and this involves distinguishing between relevant and irrelevant costs.

The original cost to your company of any given asset, before accounting for depreciation, can easily be mistaken as a relevant cost. However, it is in fact the disposable value of this asset which is the relevant amount, rather than the original cost.

Imagine, for example, that your company bought certain machinery for its operations at a cost of $35,000. When deciding between keeping this machine or replacing it with a new one, the relevant cost is its value after accounting for depreciation.

So, let’s say that the machine at this time has a salvage value of $20,000. This is the relevant cost that you should consider when deciding whether to sell the asset or keep using it. Being aware of the difference between irrelevant and relevant costs will help you to consider the future cash flows of each action, rather than simply considering the historical-based costs to your company.

Relatedly, you need accurate costing information to help you to value assets. The balance sheet will record the cost values for most assets, and in order to understand these you need to also understand the cost basis of its inventory and certain other assets.

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Jun 23

Three Lessons Retailers Can Learn from Craft Brands

Posted by Axis CPA Group on Friday, June 23, 2017

Guest Post by Vend

Retailers have historically dominated the commerce landscape. Several years ago, industry trends and top products were set by the stores selling them.

Brands were at the mercy of retail buyers, leading to bidding wars between those that favored big brands with the budget and scale to slash prices, instead of the brand with the best product.

But in today’s multi-channel world, the power has shifted and consumers are setting trends rather than just following them. Because of this, business models must adapt to meet the needs of shoppers. In other words, consumer influence is dictating which brands rise to the top, rather than retail buyers dictating which brands are on the forefront.

Many independent brands and retailers are thriving in this new shift by remaining nimble and closely connected to consumers’ needs.

Retailers who want to continue to succeed have a lot to learn from these product companies. To keep up with this changing world, retailers need to adapt, focusing more than ever before on pleasing their customer.

Below are three lessons that the world’s most successful retailers are learning from the craft brand revolution.

Create a Great Customer Experience

If you could only do business from one location, or from one catalogue, how would you maximize your profits? By making that one location or catalogue as appealing people as possible.

This is the exact situation brick and mortar retailers found themselves in prior to the digital revolution. Back then, convenient customer experience was about putting everything your customers could possibly want in one location.

The pain points from that time — like limited brands, marked up prices, oversized stores — didn’t come from retailers’ apathy towards the customer experience. Rather, they came from the limitations retailers had to contend with. Today, the multi-channel marketplace has removed these limitations.

Craft brands have succeeded by using changes in technology to listen to customer needs and purchasing behavior, creating customer experiences that do more than just alleviate pain points. They create incredible customer experiences.

Remember Dollar Shave Club? They’re a perfect example of how craft brands’ focus on the customer has led to success.

Before Dollar Shave Club, buying razor blades was inconvenient. They were insanely expensive and kept behind unbreakable plexiglass, which meant you had to find a clerk with keys and have them get the blades for you.

Dollar Shave Club had a different idea: Razors that come to you. By being deeply in tune with their customers’ needs, Dollar Shave Club was able to offer the right product, at the right time, with the right buying experience — and that changed everything.

By creating an enjoyable, convenient experience for customers, Dollar Shave Club went from an upstart craft brand to the second leading razor cartridge provider in 4 short years, and was acquired by Unilever for $1BN shortly thereafter.

Retailers who excel in today’s marketplace must realize the importance of great customer experience, and think outside-the-box (like Dollar Shave Club did) to figure out how to provide it.

Connect With Your Customers

Customers today are increasingly discerning about where they spend their money. Simply having the desired product on hand at a decent price is no longer enough to win new business.

The brands that are winning today’s customers do something different: they offer a compelling story. They make consumers proud to be the kind of person who uses their product.

Retailers can no longer afford to rest on their laurels as large corporations that feel cold and distant. They need to connect with customers and form a real relationship.

World of Angus, an independent brand that makes apparel, toys, and other lifestyle products for dogs, is a perfect example of a company that has found success by connecting with consumers.

They do this in a number of ways…

Human (Sort of) Communication: All World of Angus communication has a fun element. All of their images are of adorable dogs doing human things (wearing clothes, styling their hair, etc.) Buyers walk away from every interaction with a smile. From their goofy emails to their focus on two-way social media conversations, they are a brand with a personality, not a faceless corporation.

Exceptional Customer Service: World of Angus answers every customer support email quickly, and does everything they can to solve their customers’ problems. They feel like an ally in solving your problems, not an opponent. They don’t even take returns. They generally just ask you to donate the goods to a shelter.

Compelling Brand Story: Angus isn’t just a brand name, Angus is an actual dog, and everything World of Angus sells is ostensibly something Angus loves. It’s heartbreakingly cute, and it makes you feel like you’re a part of something when you make a purchase.

By cultivating a buying experience that customers actually enjoy, World of Angus instills a deep loyalty in their customers. They actually look forward to buying from World of Angus again.

By listening to customer needs and observing buying behavior, retailers can engage customers through various channels to give them that same powerful, human connection that craft brands have used so well.

Focus on Quality

Traditionally, companies competed on price. But in today’s world, price is no longer the sole or even most important factor in purchase decisions.

Modern consumers connect with the story behind a product’s creation. What materials and processes were used to make the product, and what it stands for. Consumers want a narrative they can belong to.

Zeitgeist Gifts, an online gift store, is a perfect example of a company that understands this customer expectation and has built a vibrant business around it.

At first glance, Zeitgeist just sells things you’d give as presents. Look closer though, and you’ll see a craft brand dedicated to something much larger than that.

They focus on “making the world more playful” by offering occasion-specific gifts that embody a playful, contemporary feeling. They don’t carry rigidly efficient products, they carry gifts that tell a story.

Zeitgeist doesn’t offer the vast inventory of a company like Amazon. Its process is deliberate and thoughtful, and consumers know that everything they receive is of the highest quality.

Retailers can create this connection focusing on the quality of their products in terms of their story, and thoughtfully curate products to become a trusted place where consumers know that they will receive only the best.

Retailers might look at the strengths of brands like Dollar Shave Club, World of Angus, and Zeitgeist Gifts, and think it’s impossible to duplicate their success because of their differing business models. However, even without the same business model, a brick and mortar retailer can succeed using those same core values of prioritizing the customer experience, connecting across all channels, and curating high-quality, relevant goods.

In an omnichannel marketplace, retailers now have the opportunity to learn more about their customers, engage them in ways previously impossible, and create impeccable buying experiences that make a customer feel loyal.

By implementing these principles, which are the driving forces behind the success of independent brands, retailers will be able to better speak to the desires of their customers and succeed in this new world.

Jun 17

THE HAPPINESS FACTOR: 6 TACTICS FOR IMPROVING WORKPLACE PRODUCTIVITY

Posted by Axis CPA Group on Saturday, June 17, 2017

Guest Post by Employment Hero

Remember the old (and slightly misogynistic) phrase Happy Wife, Happy Life! ? Well, it turns out there is a workplace equivalent: Happy workers, productive business! (and no – we couldn’t make it rhyme).

There’s a strong correlation between happy employees and high employee productivity. In fact, according to Yves Morieux, director for the Boston Consulting Group’s Institute for Organization, happy employees actually create high-performing businesses.

He’s not alone in this thinking. A study by economists at the University of Warwick found the happiness factor at work equates to a 12% lift in productivity. Whereas, unhappy workers are 10% less productive and are more likely to make errors.

 

Happiness is key to employee productivity

With happy employees such an important part of a thriving, productive workplace, it’s crucial that you root out any major sources of unhappiness. While people leave organisations for any number of reasons, the most common sources of unhappiness at work, are:  

  • Bad bosses
  • Lack of interesting work
  • No opportunities for career development
  • Zero recognition
  • No workplace flexibility

To help you tackle these problem areas, here are 6 simple ways you can support a culture of engagement, and, in doing so, increase employee productivity.

Extra tip: if you’re going to give these a crack, why not do a before and after employee happiness survey to gain a measure of employee happiness and track improvements along the way?

1. Good people management

Most people don’t like being micromanaged. That’s why good managers coach, provide meaningful feedback, and give their people autonomy, all of which makes a big difference to employee happiness and wellbeing. Employees who are given some control over their work, such as managing their own time and making decisions on what they do when tend to have greater job satisfaction.

2. Interesting work

Employees want to enjoy their job. After all, they probably spend close to half of every work day either working, getting ready for work, or travelling to and from work, so they want it to be interesting and diverse.

Of course, the nature of some jobs may not lend themselves to a great deal of variation or diversity, though you can always look for ways to increase challenges for workers. For example, by providing a range of responsibilities you can vary their daily routines.

3. Career development

For most employees, career development is the key to happiness, which makes perfect sense. Keep things interesting for strong employees, and they’re bound to remain engaged. Make sure you and your managers spend some time thinking consciously about how each employee should progress in their careers, and make plans to help them develop new capabilities.

It is also a good idea to educate employees on different types of career paths or job opportunities that are available to them.  A little training and mentoring can easily steer ambitious, talented employees to the next level.

4. Recognition

In one recent study, 7 out of 10 employees who received appreciation for their good work said they’re happy with their jobs. Compare this to those employees who hadn’t received recognition, where only 39% (or less than 4 in 10) said they were satisfied.

Recognising the contributions employees make is hardly rocket science. But don’t forget, this is not just about a fair day’s pay.  Praise and recognition are essential to creating a vibrant culture with happy, productive people.  

5. Flexibility

Offering flexible working arrangements and allowing employees to work from home is on the rise. As a management tool, flexibility delivers a big win/win.

 

A win for your employees

Working remotely for many people makes for a happier, more enjoyable working life. Giving people more control of their working routines helps them achieve a better work-life balance, which makes them happier.

 

A win for your business

With happier workers, you’ll have lower absenteeism, lower turnover, and higher levels of employee productivity.

Of course, flexibility also has an important role to play in attraction. In fact, as CPA Australia found in its 2016 study of the work environment, businesses need to offer more than just competitive salaries if they are to attract the best talent. The survey of 680 respondents from Australia, Singapore, Hong Kong, Malaysia and New Zealand, found that more respondents nominated flexible work arrangements as the most important factor influencing why they would take one job over another.

6. Look at the big picture

As you focus more on employee engagement, it’s important to assess other productivity gaps you may have in your business. For example, if you’re still using paper-based systems and operating your business using manual processes, a shift to cloud technology will also deliver serious employee productivity improvements (think, for example, just about reporting time-saving, not to mention the fact that employee work can be done from anywhere with an Internet connection).

In the case of HR, think about the manual labour required for manual data entry tasks and reconciling timesheets with payroll? Why pay for staff to update spreadsheets for the fortnightly roster when all this work could have been done automatically?

Investing in HR software can save your company – and your employees – countless hours of unproductive time. By embracing cloud technology – including in HR, you’ll improve employee productivity, reduce duplication, and help your business grow.

 

Free white paper

Remember, as salaries stagnate, introducing alternative ways to reward employees are sure to be a big hit with employees – without it being a big hit to your bottom line. For more ideas, download our free white paper on how to retain and engage your millennial workforce!

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Employment Hero is Australia’s first all-in-one cloud HRIS offering a comprehensive HR software, payroll system, and employee benefits platform in one easy solution. Trusted by Australian businesses, Employment Hero is about making rostering, onboarding, performance management, time tracking, payroll, and award interpretation a snap. Employment Hero’s HRIS also integrates with Xero, MYOB, KeyPay, and Accountright Live. Stop wasting time with spreadsheets, and request a demo today.

Jun 15

The Best Xero Accounting Add Ons For 2017

Posted by Axis CPA Group on Thursday, June 15, 2017

Guest Post by Float

How do you know which Xero Accounting Add Ons to use?

We ask all of our accounting customers which add ons they’re using, and we’ve compiled this into a handy list for you, so you don’t need to go through all the trial and error yourself.

Bill.com – AP/AR Payment

Bill.com is an AP/AR bill payment solution that helps accounting firms automate bookkeeping tasks and manage all of their clients, eliminating paper and saving time. It streamlines payments processing and approval workflows, and automatically syncs with Xero, bringing in all transactions, invoices and reconciled items. You can automate your clients’ billing through electronic payments and built-in reminders with a clear and customisable approval process. You can also access online documents, contracts, notes and invoices for collaboration.

Hubdoc – Document Management

Hubdoc is one of the most popular Xero accounting add ons on the market. It automatically imports all your financial documents and allows you to export them into data you can use. Hubdoc extracts key information from any bill, invoice or receipt, doing the data entry for you. You can also view all historical documents that are stored in one secure place online. Hubdoc enables accountants and bookkeepers to support more clients in less time while providing more value. It also automates a significant amount of the document collection process required to maintain accurate and auditable financial information.

Float – Cash Flow Forecasting

Float offers cash flow forecasting software that is super accessible and easy for your clients to understand. Using the direct cash flow method of pulling in individual bills and invoices from Xero and using them to ‘fill up’ your budgets, Float helps you and your clients understand their future cash position. This isn’t a three-way forecasting tool, but rather a Xero accounting add on and business owners that will show you how much cash a business will actually have in the bank at any point in the next three years. The connection to Xero eliminates the data entry traditionally required for an accurate operational cash flow forecast, which your clients will thank you for.

Fathom – Reporting

If you prefer seeing visual reports of your clients’ financial data rather than staring at spreadsheets all day, then Fathom might be for you. One of the top rated Xero accounting add ons for accountants, Fathom is a management reporting and business performance tool that takes your clients’ data from Xero and enables you to generate dashboards and presentations to impress your clients. Fathom’s reports and dashboards offer financial and non-financial KPIs, benchmarking, consolidation, customisable alerts, white labelling, and easy collaboration, helping you assess business performance, monitor trends and identify improvement opportunities.

Practice Ignition – Practice Management

Practice Ignition covers all the bases of helping you engage and charge a client. This includes automated client on-boarding, proposal generation, engagement letters, workflow deployment, recurring invoices and client collaboration. Practice Ignition helps to set clear expectations for billing your clients and vastly reduce the admin time to get paid.

Chaser – Credit Control

Chaser helps you to automate debtor chasing to get your clients paid on time. You and your clients can use Chaser to customise polite, persistent credit control emails that get sent automatically, saving you countless hours of manual persistence. The tool offers easily customisable email templates that get sent from your regular email address with a range of frequency and escalation options, including automatically CC’ing more senior staff members. These emails all get stored on their platform, allowing you to see all communication regarding a particular invoice in one place. Even better, their insights reports help you see who your best and worst payers are.

Further reading – The Best Xero Add Ons for Managing Cash

 

Jun 13

Small-Man-Syndrome: How SMEs can be successful on a global stage

Posted by Axis CPA Group on Tuesday, June 13, 2017

Guest Post by Unleashed

Small and Medium-sized Enterprises (SME) are companies that are independently owned and managed with less than 250 employees in their ranks and bringing in less than 50 million euros per year.

The fact is, these companies make up 95% of the OECD (Organisation for Economic Co-operation and Development) and in most countries, they provide 60-70% of jobs for the working population. These stats are impressive and as such, the place SMEs hold in the global economy should be revered.

Being an SME can be daunting when dealing with the big boys in the global market, however no matter what the risk is, the influence they have globally cannot be underestimated. Here are some points to consider when considering how SMEs can increase their reach on a global scale.

Online Presence

Globalization is increasing more everyday as the far flung corners of the globe are connected by the internet. In fact, never has the world seemed so small, and as it ‘shrinks’ its connectivity grows. A key component of having a global presence is to establish an online portfolio, be it simply a blog, information page or shop, or all three wrapped up into one captivating and tidy website. Often, the first place potential clients or consumers will go is the internet to research the service or product they are after. Therefore, investing in a good website that is updated regularly and ensuring that all your software programs are integrated to support it, is essential to being ‘seen’ and taken seriously.

Remote accessibility

Remote accessibility is also a key component to global growth as it quite literally allows accessibility of the company’s systems remotely. So, for example, management staff could be at a conference or setting up a new branch in another location, yet they are still able to have access to the company and keep a finger on the pulse so-to-speak. Essentially it allows staff to be in several places at once so that more is achieved in a shorter time. This is made possible through use of the cloud, which can store all company data in a common digital location, accessible from anywhere with an internet connection. Doing business in this manner also promotes transparency, which is fundamental to the smooth running of a company.

Global branches

It is self-explanatory but one method of global growth is to introduce branches in multiple countries. This not only is the epitome of global growth but also means perhaps if one branch was to suffer from an unstable economy, then other branches, which may be thriving in prosperous economies, can help shoulder some of the financial load. Essentially, the company’s eggs are not only in one basket.

Now, these three aspects described are rather difficult to achieve without some sort of management system that has remote accessibility and is capable of recording multiple things from multiple locations simultaneously. This is where a stellar inventory management software system will be of huge benefit. They can be custom-designed to accommodate for all your company’s inventory needs and significantly reduce confusion and errors arising from poor inventory management. Their complete remote accessibility allows for accurate reporting and buying of stock even if no physical count is possible at the given time.

Inventory management software is not the only solution out there that will make global growth, despite more competition than ever before, a distinct possibility. There are several other packages available for different aspects of a company’s operations, and it is essential to do due diligence in researching them and take advantage of every opportunity as an SME.

Jun 11

REDEFINING YOUR POINT OF SALE WITH A MODERN POS PLATFORM

Posted by Axis CPA Group on Sunday, June 11, 2017

Guest Post by NETO

It doesn’t matter how large or small your store is, or how many of them you’ve got—if you’ve got a point of sale (POS), you’ll see big benefits in switching from a simple cash register to a full-featured, cloud-based POS platform.

A modern POS platform will offer a suite of features to save you time by simplifying and streamlining your store’s administration and management. And that leaves you with more time to focus on delighting your customers and growing your business. Here are four key features of modern POS platforms that will revolutionise the way you sell:

1. Flexible fulfilment options

A modern POS platform doesn’t just blur the line between online and in-store shopping—it obliterates them, creating new pathways for customers to place orders, and new ways for you to fulfil them. 
 
Your traditional retail store is no longer just a place customers visit to buy and take home their products. It’s also a showroom, where customers can view products and seek advice before getting their order shipped. It’s a warehouse from which you can ship orders to your online customers. Your ecommerce customers can “click and collect” their orders, buying online and picking up their goods in store.
 
A modern POS platform also leverages the latest technology so you can offer the payment gateways and value-add options your customers want. With new pay-later services like ZipPay and Afterpay, customers can receive their goods straight away and pay off the balance over an interest-free period. Even classic lay-bys are simplified, with all customer information, deposits, and payment details readily available in your POS platform.
 
You can’t do that with an old-school cash register!



2. Deep integration with other sales channels

As you’ve just seen in the previous point, your modern POS platform doesn’t exist in isolation. That’s why it needs to be deeply integrated with your other sales channels, such as your online store, web marketplaces (like eBay), and social media platforms. This integration delivers a consistent customer experience across channels, while being simple for you to manage, so it’s a win for both you and your customers.
 
Your most loyal ecommerce customers may rarely shop in-store, so a traditional POS system wouldn’t recognise their high value. But a fully integrated, modern POS platform enables you to search for them during an in-store transaction and view their unified sales history across all channels, so you’ll be able to recognise their VIP status.
 
And on the rare occasion an online shopper is unhappy with their purchase, you’ll have all the information you need to handle their return in-store, with the added benefit of the personal touch. This is more than just a good way to restore their confidence; it’s also a reassuring message to other online shoppers that their purchase is satisfaction guaranteed.


3. In-sync inventory

With a modern POS platform, your staff won’t need to spend valuable work hours calling other stores to figure out which one has a particular item in stock. Every POS terminal lets them view real-time stock levels across all locations, including your warehouses. And online shoppers will always have the same up-to-date information, so they won’t miss out on popular items, and they’ll know which store to visit if they want to try before they buy.
 
The full inventory management capability of a modern POS platform also helps you optimise your inventory and sales cycles. With automated replenishment and streamlined stock transfers, you’ll never disappoint your customers by being out of stock. And cloud access means that, wherever you are, you can log in to find all the information you need to minimise ordering and warehousing costs, and maximise your cash flow and profits.



4. A scaleable POS solution

As your retail business grows, your POS needs can change quickly. Only a modern POS platform can keep up with the pace, enabling you to add a new POS terminal to your store in just a few clicks, using off-the-shelf tablets or computers. If you’re expanding to new outlets, it’s easy to create a whole new location and add user accounts for your new staff. 
 
And you won’t need need to limit yourself to traditional shops. With a modern POS platform, you can open a pop-up shop when the opportunity arises, and instantly remove the new outlet when it’s time to close down.
 
The benefits of switching from a classic cash register to a modern POS platform are hard to ignore. Neto is a leading omni-channel retail platform designed to help growing retailers sell anything, anywhere—from web, mobile, eBay and social media, through to traditional bricks-and-mortar stores. With a wide range of add-on integrations and powerful back-office capabilities, Neto takes care of the details so you can concentrate on your core business: customers. Start your Neto POS free trial today.

 

Jun 09

Investing in staff training is an investment in your business

Posted by Axis CPA Group on Friday, June 09, 2017

Guest Post by GoRoster

Staff training is one of the best investments you can make for the future success of your business.

As margins get tighter, professional development for your staff is a great way to give your business a competitive advantage. Increasing your employee’s skillset should improve competency and efficiency on the job, boost sales and create an environment that encourages repeat customers.

Everyone has had an experience in a restaurant, for example, where they could tell the staff were on-point. The food was delicious and on-time, the front of house staff were knowledgeable and attentive, and you were made to feel special – not just another receipt in the till. You almost certainly visited again, told friends and family about the great experience you had, or perhaps even posted a review online.

Despite the positive differences well-trained employees make to the day-to-day running of a business, staff training is often ignored by companies that see it as ‘time-consuming’ and ‘expensive’. Yet there are numerous training options around to suit the different needs of businesses, learning requirements of staff, and budget constraints. Some of these include:

  • external industry training such as conferences, seminars or workshops
  • online courses
  • job shadowing – great for people new to a role
  • in-house training – a session taken by a more experienced member of staff.

When choosing the right training option for staff, it’s important to make the decision based on what the business requires. What works for other companies may not work for you. Training doesn’t have to be expensive or take your employees away from work. Job-shadowing and in-house training provide ways to upskill your staff while they are still on the job.

Not only will quality training improve the performance of your staff at work – allowing them to take on new tasks and greater responsibility within the organisation – it will show that you value them. Happier, more engaged staff will be another bonus for your business.

Jun 07

How to Upsell and Cross-Sell in Retail: 6 Pointers to Implement in your Store

Posted by Axis CPA Group on Wednesday, June 07, 2017

Guest Post by Vend

Picture this: You’ve just about closed a sale, and the shopper made up their mind to buy a product. What do you do?

Do you ring up the sale and send them on their way?

Or do you try to find opportunities to increase their basket size?

If you picked the first answer, chances are you’re leaving a lot of money on the table and need to think about how you can increase add-on sales.

Two of the best ways to do this is through upselling and cross-selling. Just to get our definitions straight, cross-selling means recommending a product relevant to the one that’s already in their basket. An example would be recommending a matching wallet to a purse that the shopper is buying. Upselling, on the other hand, means offering a pricier version of the item. Think of it as asking the shopper if they want to upgrade their purchase.

Done right, both tactics enable you to increase sales while helping customers at the same time.

The key to upselling or cross-selling success is doing it properly and at the right time and place. If you upsell a product that’s irrelevant or if you’re selling in such a way that you’re coming off as pushy, then you’ll not only fail to convert the customer, but you might even lose the original sale.

The #1 rule here is to always provide value. Yes, getting someone to upgrade their purchase or to buy an additional item will benefit you, but the deal must also be advantageous to the customer.

Ask yourself the following before delivering your spiel:

1. Does the product complement the item that the customer is buying?

Upsells and cross-sells only work when they’re relevant to the original purchase. When you’re upselling or cross-selling an item, see to it that it’s a) a better version of what they’re buying or b) a product that goes with their purchase.

2. Will this product really benefit them?

Sometimes, an add-on item may complement another product, but it won’t benefit the customer. For example, while a certain type of lens may go with that camera your customer just bought, it wouldn’t be a good cross-sell if they don’t have a need for it.

Get to know the customer before selling them more merchandise. Ask how they’re going to use the product, then if you have items that would benefit them, go ahead bring them up.

3. Are they open to spending more?

If the customer has made it clear that they’re on a budget or they’re only after one product, then respect their wishes and don’t try to sell them anything else. You might send them packing if you insist on upselling or cross-selling.

If you answered “Yes” to all three questions, then you can proceed to suggest upgrades or additional products. And to help you close more sales, here are some proven pointers you can incorporate into your strategy.

Make customers *see* the value or benefit that they’re getting

Listing out features or specs rarely seals the deal in sales. This is because the human mind is more responsive toward stories or images. To effectively upsell or cross-sell something, you need to make people see the value or benefit of the purchase.

If you’re an apparel retailer, and you’re cross-selling items that would go with the piece that a customer is buying, why not show them real outfits that showcase the different items?

One retailer that does this well is Red Dress Boutique. Their product pages have a “Complete Your Look” section that displays all the other items that the model is wearing.

In some cases, shoppers don’t have to literally see value in order to make a purchase decision. You can enable them to picture or imagine certain benefits by telling stories.

For instance, many computer and electronics shops are able to sell extended warranties or insurance because they can vividly illustrate a situation in which such purchases would come in handy.

The associate could tell the story of the guy who accidentally dropped their phone and had to shell out hundreds of dollars to fix it because he didn’t have insurance.

In doing so, the retailer is making the customer see (in their mind’s eye) the benefits of purchasing insurance or extended warranties.

Consider applying this strategy in your store. Be more vivid with how you sell your products using stories or real-life examples.

Consider following the “Rule of 3”

When you’re upselling, see if you can apply the “Rule of 3” in your efforts. This means giving the shopper 3 options for their purchase. Jennifer and Danila, the co-owners of Convey boutique in Toronto, call these three options the Requested, the Alternative, and the Dream.

“The Requested is that starting line or price point. It’s accessible, easy to wear, and something that may be dressed up or down,” says Daniela. “The Alternative is something that still relates to the Requested [item] but maybe at a more mid-price point. Then the Dream is one of our personal favorites, one that we know they’re going to love, and something that may have a higher price point.”

According to Jennifer, when selling the Dream, they aim to educate the shoppers as much as possible. “We love to talk about who our designers are; their names, where they’re from, what they like to do, what inspired the collection… it really builds trust and creates that experience with our customers where they feel proud to own the pieces that they take home.”

That said, being genuine is key. As Daniela puts it, “when upselling, you always want to remain genuine. I think that in order to create the best experience, we would never want to put the client in something they feel uncomfortable in. [Similarly,] we would never want to only show them pieces outside their price point. The key is to play to your audience and always be genuine with your approach.”

The Rule of 3 can also be applied in cross-selling. In Convey, for instance, Jennifer and Daniela try to ensure that customers walk into the fitting room with at least three items. They accomplish that by recommending products that complement what a shopper wants to try on.

“Let’s say a customer is drawn to a white silk blouse. I would show her similar blouses so we’ll have different styles in the fitting room,” shared Daniela. “Or we’ll pair it with denim, footwear, and accessories to really help that customer envision the outfit, not only in the store but when they leave.”

Don’t go overboard with price points

A key point when it comes to cross-stelling is to “be reasonable,” notes The Retail Doctor, Bob Phibbs. In this excellent post on cross-selling, he writes:

If a customer buys a $500 blazer, it makes sense to suggest a $50 tie; but if a customer buys a $50 tie, don’t try to sell them a $500 blazer. The suggested item shouldn’t exceed more than a certain percentage of the cost of the original item. Some put this figure at 25%, while others have a different number. You’ll find what works for your customers. Instead of that blazer, how about a nice $20 set of brass collar stays?

This can also be applied to upselling. Get a feel for what a person is looking for and how much they’re willing to spend before offering the most premium option.

Consider what many airlines of doing. Many airlines offer upgrades but do so in certain increments. When someone books a trip in economy class, for instance, the airline may ask if they’d be interested in more legroom or in premium economy. What they don’t do is push the traveler to upgrade to first class.

Reward customers for the added purchase

Giving away a reward or incentive can increase your upsell/cross-sell conversion rate. Consider what many ecommerce sites are doing. To encourage people to buy more, they often throw in free shipping if the shopper spends above a particular threshold.

If you’re a brick-and-mortar store or if you’re not keen on giving away discounts when you upsell, perhaps you can incentivize shoppers with a free gift instead. Nordstrom, for example, is giving away a free Clinique moisturizer every time shoppers buys $55 worth of Clinique merchandise.

Use round numbers when appropriate

While ending prices with the number 9 or 7 has proven to increase sales for some products, this tactic doesn’t always work when you’re upselling or cross-selling. Consumer psychologist and retail consultant Bruce D. Sanders says that whole numbers convert better when you’re suggesting an add-on sale for the first time.

“For the first upgrade decision, they’re more likely to choose the higher-priced alternative when the prices for two are presented as round prices instead of as just-below prices. So if the prices on the bin tags are $19.99 and $29.99, the salesperson says, ‘For only $10 more, here are the additional benefits you’d get.’

The easy comparison facilitates acceptance of the upgrade.”

Remember, it’s not what you say, it’s how you say it

“It all comes down to a simple, though often-overlooked concept: It’s not just what you offer, it’s how you present it,” says Aron Ezra, CEO of OfferCraft, a software company that uses games and rewards to make offers and employee incentives more appealing.

“For example, instead of the sales associate saying, ‘Would you also like to buy a $20 tie with your $40 shirt?’, imagine she says, ‘The shirt comes with your choice of one of these ties… You can take any of these, or you can give back the tie to reduce the price.’

Instead of deciding to make an additional purchase, this customer is now asked to actively give up the tie, which he is more likely to feel bad about doing,” Ezra continues.

Keep this in mind when you’re coming up with sales spiels and tactics. If a particular offer isn’t giving you great results, revise your approach and see how customers react.

Final words

There’s more to upsells and cross-sells than just pitching add-on products. To successfully close sales, you need to get in the minds of shoppers.  Figure out their needs and motivations, and then craft your approach accordingly.

Jun 05

How to Prevent and Handle Robberies and Theft in Retail

Posted by Axis CPA Group on Monday, June 05, 2017

Guest Post by Vend

Are you equipped to handle retail theft and robberies? Whether you answered yes or no to that question, keep reading.

Robbers and thieves can strike unexpectedly,  and they can catch you off guard even if you already have an emergency plan in place. That’s why it’s important to periodically evaluate your procedures and improve them when necessary.

To help you do that, we’ve put together some retail emergencies that you might encounter and how to deal with them.

1. Armed robberies

The best way to “deal with” with armed robberies is to prevent them. Understand that robbers commit crimes because they believe that the payoff outweighs any risks. As the Beverly Police Department in NJ puts it, “A robber commits a hold-up because he or she believes that their profit will be worth the risk. By decreasing the possible profit and increasing the risk of apprehension, potential victims can reduce their chance of becoming a target.”

How exactly can you do that? Here are a few tips:

Know when, why, and how robberies take place

Let’s start with the when. According to the Portland Police Bureau, armed robberies usually happen during opening and closing times, as well as lunch breaks. Why? “Opening and closing periods are particularly vulnerable times due to low staffing and large amounts of cash on hand. Lunch hours are primary times for the same reasons.”

Also be wary that the holiday season increases the likelihood of robberies because of higher cash volume and large crowds that can preoccupy retail employees.

With that in mind, you can prevent robberies by taking some precautionary steps. The Beverly Police Department recommends having “several employees present when opening and closing the business.” These employees can:

  • Inspect the business for forcible entry before entering the business.
  • One employee searches the premises before admitting others. If all is clear, the employee entering the store first can signal the companion with some prearranged sign.
  • At closing make sure no one is hiding in the business.
  • At closing one employee can enter the parking lot first and can signal the companion with some prearranged sign if it is safe.

Practice safe cash handling

Robbers are after cash, so take the necessary cash handling precautions to minimize risk and loss. Here are some of the ways to do that:

  • Avoid having unnecessary amounts of money in your register. Only keep the amount you need to conduct normal business, and either put everything else in a safe or transfer to the bank.
  • Don’t make predictable trips to the bank. Change up the times of your trips as well as your route.
  • Have marked money in your register. Take five and ten-dollar bills then record their serial numbers and series dates. Place those bills in your till and include them in the money to be given to the robber. Do not use marked money in regular transactions.

Improve visibility

Having a checkout area that’s highly visible can discourage robbers. That why it’s best to:

  • Avoid fixtures or signs that can obstruct views of and from the register. These include large signs on your windows and doors, counter displays that are too high, and fixtures that block people’s view from the outside.
  • Cover your blind spots using mirrors or cameras. This will help you monitor the hard-to-see areas in your store.
  • Invest in good lighting both inside and outside your stores.

What to do in the event of an armed robbery

If an armed robbery does take place, stay calm and do the following:

  • Cooperate with the robber. Don’t resist, and don’t do anything that would put store employees or customers at risk. (Read: don’t try to be a hero.)
  • Avoid surprises. Robbers are generally nervous, so anything quick or surprising movements could put you and others in harm’s way.
  • Activate any silent or holdup alarms you have in the store.
  • Try to give them the marked money in your register.
  • Be observant. Take note of the number of robbers involved as well as their physical characteristics (e.g. height, eye and hair color, hair length, etc.). Also take note of what they’re wearing and any weapons used.
  • Call the police immediately after the incident. Provide time of the robber’s departure and give them a physical description as well as the method of travel.
  • Preserve the evidence. Keep clear of the crime scene and avoid touching anything that the robber(s) may have touched.

2. Flash mobs

No, we’re not talking about the fun, break-out-in-song type. This type of flash mob involves several people (sometimes up to 40 individuals) walking into a store to overwhelm employees and steal merchandise as quickly as possible. Here’s a video of retail flash mobs in action:

The strength of flash mobs lies in their numbers. When a crowd suddenly walks into a shop and wreaks havoc, it can be difficult to react properly. And in many cases, robbers walk out of the store before employees even know what’s happening.

So how do you prevent and respond to flash mobs? Here are some tips:

Work with law enforcement to monitor suspicious behavior

According to the NRF’s Effective Crowd Management Guidelines, retailers should work closely with law enforcement to spot and report potential flash mobs. For instance, if you or employees see unusually large groups of people in your vicinity, you need to alert the authorities right away.

Social media can also pave the way for flash mobs. People involved in these crimes may plan and coordinate using social networks, so keep an eye out for any mentions of your store or general area.

Responding to flash mobs

The NRF recommends that retailers re-position employees in the store to discourage flash mobs. One thing you could do is put associates in key areas or near high-value products (since these are usually the target of people who participate in flash mobs.)

And if a flash mob does take place, don’t attempt to fight back as this could lead to violence. The NRF advises that you “instruct employees and customers to retreat into a secure part of the store.”

In other words, stay safe and let your surveillance cameras and the proper authorities do the work.

3. Shoplifting

Shoplifting is also major problem in the retail sector, accounting for 38% of retail shrinkage. That’s a big chunk, so every retailer must take steps to prevent it. Here’s how:

Know the signs

Shoplifters usually exhibit the following behaviors:

  • Avoids eye contact
  • Spends more time looking at employees and exit routes rather than browsing the merchandise
  • Wears bulky clothing
  • Walks in and out of the store repeatedly without buying anything

Acknowledge each customer who walks in

Greet every single person who comes into your store. This lets them know that you’re aware of their presence, and it makes them less likely to commit a crime. But don’t just stop with a greeting. Continue to engage them as they look around.

Jay Gurewitsch, owner at ArcadiaNYC, writes on Quora:

“If they are looking at something, we may tell them something unique about that product in passing as we go to help someone else or restock a shelf. Ideally, we keep such pitches to one sentence, e.g., ‘that vase is handmade in Massachusetts.’”

“It allows the customer to ask any questions they have, and from the loss prevention perspective, it tells them we know they have it in their hands.”

When you spot someone shoplifting…

The right procedure for handling shoplifters may vary depending on the laws in your area, as well as the type of the store you have and where you’re located. That said, if you decide to confront a shoplifter, here are some best practices:

1. Establish shoplifting probable cause – You must first have probable cause if you plan to detain a person suspected of shoplifting. This means you or your staff must have witnessed the person take your merchandise and attempt to leave the store without paying for them.

2. Confront them – If you decide to confront the suspected shoplifter, approach them when they have exited the premises. According to security expert Chris E McGoey, it’s best to have additional personnel with you when you approach the shoplifter.

“A good rule is to outnumber the suspected shoplifter by a least one. The extra personnel usually prevents the suspect from fighting or attempting to flee. A female back-up is best if a female suspect is being detained,” he wrote on his website.

When you approach the shoplifter, immediately identify yourself. Always have a form of ID to show the suspect. If you have loss prevention personnel who aren’t in uniform, see to it that they have their badge or ID handy.

“The presentation of credentials should occur simultaneously with the words “I’m with ACME Stores, and I would like to talk with you about the ‘two bottles of ACME wine’ in your bag,” adds McGoey.

From there, aim to retrieve the merchandise before going back into the store so you can confirm the theft before detaining the shoplifter.

3. Escort them back into your store – Take the shoplifter back into your store. You may want to have more than one escort to keep them from running or endangering other people in your shop. Once inside, see if there are any other items you can retrieve, then tally the costs.

Final words

No one wants to think about being robbed or stolen from, but as a business owner, you need to think about these scenarios and prepare for them. The last thing you want is to be caught off guard.

Now, we’d like to hear from you. What are your procedures for dealing with robbery and theft? Let us know in the comments.