Case Study #55: Part One – How Big Box Retail Sales Practices Derailed a Quality Product

The strength of the supply chain is only as good as its weakest link.

In this three-part case study, the client knew it had superior quality products that were well positioned in the market, but its sales were being mysteriously derailed at the retail level – the weakest link was a retailer partner’s sales staff.

  • In part one we describe the startling factors found to be causing the poor sales of the client’s car audio system, and the excruciatingly basic solution – train the customer’s sales team
  • In part two we discuss the single factor that was completely ruining the client’s security and keyless entry system sales at this retailer, and how a simple packaging redesign increased nationwide sales by 3X in the first quarter alone
  • Part three describes how we pulled the pieces together into an effective value-add, making the client truly memorable and reverting sales in a significant way

We recognize that this case study is on the lengthy side, but it contains valuable take-aways which we hope you will find useful.

Part One

Project Description

Our client manufactured higher-end car audio equipment. Its systems were OEM-installed in 40% of luxury-range vehicles and its consumer-packaged components were sold at retail, in both big-box and boutique stores. The focus of this project was one of the client’s nationwide, big box electronics chain customers. With sales exceeding $10 billion this customer represented 15% of our client’s U.S. retail sales.

The client knew that it had cutting edge car audio technology delivering superior sound, skip-less CD players, an intelligent interface system to control multiple car audio components and an excellent keyless entry and alarm system. It had long been an innovator in-car audio and its overall market positioning was good. Yet something was awry with this retailer; the client was not seeing the expected sales.

The impetus for this project were the once-yearly, 30-minute multimedia training presentations that the client, along with its dozen or so competitors, delivered to the customer’s 5000 car audio sales associates. The presentations utilized flashy effects and hip music to showcase each company’s new products, features and benefits.

Our client’s presentation had ranked dead last in popularity the previous two years and the client was at a loss on two fronts: how to make an impact in the coming year’s presentation and revert the poor sales.

Corporate Training Institute’s sister company CKI was brought in by the video production company that produced the multimedia presentations as the upcoming presentation was not business as usual – the client needed to knock its presentation out of the park.


Interviews with the client quickly revealed that its sales execs did not have a grasp on exactly how the retailer was selling car audio equipment – neither theirs nor the competitors’. The sales execs primarily dealt with this customer at the demand management level; the extent of the interaction was to get a forecasting number and how the customer arrived at its forecasting number was unknown. Knowledge of this retailer’s sales drivers was also absent and account rep visits to the retailer’s stores were rare.

Understanding that the client had no insight as to what was causing the problem, the fastest way to determine the actual factors at play was to perform a sort of Gemba Walk – a lean technology technique whereby the actual work being performed is personally observed. (Gemba or genba is from a Japanese term meaning “real place” or “real thing.”) The Gemba Walk is typically part of the plan-do-check-act cycle which is covered in the APICS Execution and Control of Operations course.

Accordingly, our teams visited multiple retailer locations, observing the car audio departments and interviewing the sales associates, managers and installers. We had designed a checklist and questionnaire in order to quickly and efficiently gather information. Within a few days we had identified the main factors adversely affecting the client’s car audio equipment sales but we validated the results by visiting a total of 17 stores in six states.

Our discoveries pointed to the need for training:

  • The retailer’s car audio sales staff ranged in age from 20-30 years old, generally with high school educations
  • The car audio sales departments had a 25% staff turnover rate
  • The sales associates desperately wanted general sales technique training but their only training was in loss prevention – how to spot theft in their departments
  • The sales staff knew our client’s product was the best but did not know why; further, they could not remember the details of our client’s product lines – models, features or benefits
  • Corollary to this point was that the sales staff wanted to sell customers a system they could add onto in the future – the sales staff was unaware that this was already a key feature of our client’s product line
  • The sales associates had no understanding of the environmental and technological differences between home and car audio systems

The fallout from this last point was jaw-dropping, as it directly affected how the sales associates helped customers decide on which brand of car audio equipment to purchase.

First, the sales associate would ask the customer what brand of home stereo equipment he owned and try to sell that brand. The problem with this approach is that our client manufactured only car audio – it did not produce any products for the home. So this approach completely removed our client from the sales equation!

If that approach didn’t work the sales associate would recommend the brand installed in his own vehicle (and the customer often wanted to know this). The problem with this approach was two-fold – our client had no incentive program enabling sales associates to purchase the client’s components, and because the client’s product line was more expensive, if the sales associate had an aftermarket stereo it was typically a lower-end brand. The client was losing out again, this time because its product was “too good.”

The solution was to create a training tool, in this case a printed manual in a binder, that would be distributed to the  customer’s sales associates as part of the upcoming multimedia training presentation. Additional copies would remain in the stores as a reference work and sales manager training aid, particularly since the sales staff turnover was very high.

The challenges were that the manual needed to cover a lot of ground; we needed to create a value-add to effectively communicate sophisticated car audio technology and general sales training as well as product line features to a medium-education level audience. You will read more about the training manual in part three.

In part two of this case study, the stunning reason why the retailer was not selling our client’s security/keyless entry system, and the solution that caused sales to jump 3X in just the first quarter.

Read Part Two.

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