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Corporate Caused Hell: Sell More Keys.You Can't? Okay, We'll Scrap Them Then


Jason humphFrom RHUer

A couple of decades ago I worked for a company that sold gifts, and as a sideline, keys. While the keys were not a major factor in our total sales the company really wanted us to sell them because due to the huge markup, the profit on keys, dollar to dollar, was huge compared to the gifts. Keys as a percentage of sales = “Meh.” Keys as a percentage of profit = “Wow.”

Then the company decided to base the grading of both the stores and each employee on mostly dollar-per-customer. This was partly a plan to sell more keys by encouraging the gift customers (the majority) to also buy a key or two.

Unfortunately we had two types of customers, those that bought gifts and those that bought keys. Rarely would the same person do both.

So let’s do the math. Two customers come in and each buys $60.00 worth of gifts, your D/C is $60.00 which is way over your $50.00 goal – cool. Next customer comes in and buys $4.00 in keys. Now your D\C is $41.33 – not cool because this can get you fired. Wailing and hair-pulling ensue.

So we asked corporate to not include key sales in the dollar-per-customer calculation and their response is that this will incentivize us to sell way more keys to each key customer. Sure, all of the key customers will go from buying 2 keys at a time to 25.

Guess what happened?

No matter what key you needed, we were out of stock. The key machine was broken. The one person (we were all trained) that makes the keys is not working today. In previous years our small kiosk shops would put the key setup in the stockroom in November to make way for stocking and ornament displays, only for the keys to reappear in January. Now the return of the keys would be delayed until, oh let’s say, August. It is never wise to punish people for selling your most profitable product.

Key sales dropped to almost nothing, lamentations at corporate, cheers and jubilation in the shops.

So what to do? Well corporate is never wrong, especially about its dollar-per-customer policy, so it must mean that all of America no longer uses keys. Fortunately the solution is easy, our most profitable product line was discontinued and all the keys were sent to be recycled.




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