Nikolay Piriankov, founder of engagement ring specialists Taylor & Hart, reveals how using sales targets has incentivised staff to give customers their happily ever after.
In an industry that is highly competitive, Taylor & Hart is up against the likes of Tiffany & Co and Pandora as it looks to disrupt the engagement ring market.
Thinking like its bigger rivals, targets are helping the four year-old business to be hyper-efficient – allowing it to offer savings of up to 40 per cent on its diamonds and other gems, when compared to high street rivals.
Setting sales targets
“Each department has one key metric, which we use to measure success,” explained Piriankov, “We then put a live number up on the wall, showing how we’re performing against that target.”
Benchmarking current performance against a sales target in this way is proving to be a major motivator for Taylor & Hart’s staff. “We hire individuals who are spurred on by the system,” revealed Piriankov. “We had a poor month in February after a record-breaking January and one of my colleagues told me she felt physically sick when she saw the number. That shows how seriously people take this target, and how motivated they are to get the numbers back up.”
Taylor & Hart uses Gecko Boards to power the dashboard. “I like the carrot more than the stick, but the Gecko dashboard does both,” commented the 30 year-old entrepreneur. “When you smash your target, the dashboard lights up green. We celebrate by playing our victory song on YouTube.”
The biggest challenge
“It’s a long process deciding which metric to measure and how to set targets,” admitted Piriankov. “For example, we don’t set revenue targets for the sales team. Instead, we have a volume target.”
Taylor & Hart sells some engagement rings for £500 and others for £50,000. Piriankov wanted to ensure that salespeople treated customers at both ends of the scale equally. “Sales targets focus on conversion rate, volumes, and Net Promoter Score,” he said.
Every department needs a target
Setting sales targets can be fairly straight forward for commercially-driven departments, but how do you set goals for other areas of the business where the impact is harder to measure?
“I was really struggling to set goals for our developers,” said Piriankov. “They hated being told that a feature had to be ready by a certain date. They would ask me whether I wanted good code, or something full of bugs?’”
Piriankov worked out that the features being developed by the IT team had a direct impact on the time it took the sales team to send out a quote. “So now our target is to reduce the time it takes to quote from ten minutes to five,” he explained.
“This means they are constantly working on features that help to reach that goal. It took me a long time to work out this approach, but it directly affects our profitability, so it works for the business.”
Team goals work
Taylor & Hart sets individual goals, but a third of a salesperson’s financial stimulus is based on team performance. “This incentivises people to help their colleagues and builds a collaborative sales culture,” Piriankov noted.
“It also helps move the sales team away from a ‘hunter strategy’ and towards a ‘farmer strategy’. We want to nurture our relationships, both with the customers and with our team.”
Use your Net Promoter Score
A Net Promoter Score (NPS) is a grading system, which uses a score of between -100 and 100, and measures the willingness of customers to recommend a company’s products or services to others. Fans of the system believe it is one of the most accurate ways to measure customer loyalty and gauge satisfaction.
At Taylor & Hart, an NPS is used to track the consumer experience at various points along the user journey. “It’s the most effective metric I’ve seen out there for measuring customer experience,” believes Piriankov. “Most feedback mechanisms only let you take feedback at the end of a process, which means you have no idea where you went wrong. We can pinpoint the specific issue and work to improve that point of the customer journey.”
Customers can rate the company’s performance at many intervals, including during the pre-sales process and through rating a finished product. The company aims for a score of 80 or above. When a score of below 80 is registered, Piriankov investigates immediately.
“I immediately get a notification through our messaging service and I will contact the customer, asking for feedback via email or over the phone. I can be speaking to the customer in minutes, which helps me make quick improvements to my business.
“Our single competitive advantage in this market is speed. We have neither brand heritage nor deep pockets. But we can react very quickly when there’s a problem, which helps us to offer a service that is second to none.”
The “long tail” of the NPS
A strong NPS helps Taylor & Hart understand the lifetime value of each customer. “When you buy an engagement ring, you tend to ask for advice,” explained Piriankov. “We want our customers to refer us to their friends and family. We also want them to come back when it comes to buying their wedding ring or another piece of jewellery. By tracking how happy customers are, we can see our virality – the percentage of customers that become true brand ambassadors.
“With engagement rings, you don’t expect much lifetime value – people usually only buy one. When we were fundraising, it was especially helpful to have the NPS to show investors that we were generating lifetime value nonetheless. It proved our business model was sound.
NPS has also had a “profound impact” on company culture, he claimed. “We base certain staff incentives on the NPS because the metric is indicative of referrals and repeat business, which are long-term goals rather than short-term gains.”
A glitch in the system, and how NPS saved the day
Reacting quickly to a negative NPS recently saved Taylor & Hart from a “major headache” down the line, Piriankov remembered. One particular customer loved the final product but gave a service rating score that was below average.
Having got in touch to find out why, Piriankov discovered the company’s system had sent his fiancée an email by mistake – giving her a prior warning he was about to propose.
The business quickly realised that the same glitch could have potentially affected up to 2,000 other customers and a fix was put in place that day to ensure no other proposals were ruined.
Growth is the ultimate target
Piriankov credits his dynamic use of targets for driving growth at his startup. “Targets have been super critical to our success,” he said. “To date, I can count the number of customers who have given us an NPS below 80 on two hands.”
Taylor & Hart currently boasts an annualised turnover of £2m and year-on-year growth stands at 80 per cent. “Using transparent targets, we’ve ensured real accountability, both for individuals and teams.”
If you’re interested in improving the way you set targets at your business then utilise our benchmarking tool. We’ve also got some helpful quick tips below.