Selling Cosmetics: The Amazing Power of IO Psychology

When I first started studying the professions of HR and training, I kept hearing about the field of “Industrial and Organizational Psychology.”  At first, coming from a business and technology background, I was skeptical about the field and its potential value.  Now, after years of case studies with thousands of companies, I am convinced that we all must take this field very seriously.

Let me give you one powerful example, which will be published in detail in an upcoming research report.

How a Major Clothing Retailer Sells Cosmetics

Bon-Ton Stores is one of the country’s larger clothing retailers.  They position themselves between Saks and Macy’s on the high-end and Target in the mid-market, focused on attracting middle income buyers who want style and good value.  One of the critical parts of the retailer’s strategy is to deliver a complete cosmetics department that sells a wide range of cosmetics.  Cosmetics are one of the highest margin products in retail, and they also attract higher-end shoppers and differentiate the store from box chain retailers.

Over the years the cosmetic industry has developed a common understanding about the skills and qualities needed for high-performing cosmetic salespeople.  In fact, the cosmetic manufacturers (there are hundreds) validate and qualify all the salespeople hired by the store.  There are dozens of cosmetic lines in each store, so each candidate must be validated by a range of cosmetic companies.

The cosmetic companies have come to the conclusion, as one may expect, that one of the most important attribute of a high-powered salesperson is good looks.  If the salesperson is beautiful and very experienced at applying makeup, then presumably the customer will want to buy from them.  Makes perfect sense.

Well Bon-Ton studied this whole area in their stores and found a wide range of sales performance among different stores and individual salespeople.  The head of retail sales felt sure that there was something going on here, so they hired some excellent IO Psychologists (from Kenexa, an amazingly powerful company) to help crack the code.

The Kenexa Psychologists performed what they call a “comparison study” – they isolated the top 10% of salespeople in performance and did an extensive psychological, skills, experience, and capability analysis.  They then compared these profiles against a similar sample of “average” performing salespeople.

This type of analysis is not new:  high-performing sales organizations do this frequently (but probably not enough) – to identify the “unknown” and “intangible” reasons for success.

This type of analysis is intended to be bias-neutral.  That is, what we are trying to do here is remove the well-honed bias of the manager, who “thinks” he or she knows what makes a good salesperson.  (By the way, I do believe that one of the single most important elements of a high-performing manager is truly understanding what drives success in a given role, and then developing a team which embodies these success-factors.)

Remember that most managers are promoted because they are successful in the role.  Sales managers were good sales people;  IT managers were good IT professionals, etc.  This means that they are often “unconsciously competent” – they know how to succeed, but they may not really know what it is they do or how they do it to create success.  Without training and a lot of experience, they often don’t truly understand how to hire the “right person” in their own department.  They often rely on “proven experience in sales” – which may or may not translate into success in their own particular company and sales team.

So back to our story.  The Kenexa team did this analysis, and after several months they analyzed the data and presented it to management.  What they found was quite contrary to common wisdom.  In fact, the single most important characteristic of the highest-performing cosmetic salespeople was not appearance, it was “cognitive ability.”  That is, these high-powered sales people are actually very smart.  They think fast, they know how to analyze a lot of incoming data, and they are excellent communicators.  They are not necessarily the most attractive!

As Kenexa and Bon-Ton considered the data, they began to understand why this was true.   A typical cosmetic rep must be familiar with hundreds of similar product among many different lines.   They must understand the various colors and hues, how to apply these to different people, and how to use them in many ways.  The customer walks in and sits down only a few feet from the salesperson and says “make me beautiful.”  They must immediately ask the right questions, select the right blend of cosmetics, and listen closely to the customer as they put on the makeup.

This is not a job for someone who doesn’t think fast – in fact it is a very complex role, and requires study and careful understanding of many products and techniques.  Cognitive ability is key to success.

(The Kenexa team found other characteristics of these high-performers as well, and this information was also validated through careful analysis of the performance of these individuals.)

What Bon-Ton and Kenexa did next was to take this new, powerful information and use it to redesign the company’s screening and interviewing process for sales candidates.  This required a validation with the cosmetic manufacturers, who had never seen such data before.  The results – well you can imagine – were a dramatic increase in sales effectiveness.

What this shows is three important lessons:  First, when you have a large enough sample of employees, the use of IO Psychology to characterize high-performance can drive tremendous improvements.  Second, we must not rely solely on the “judgement” of managers to understand what drives high-performance.  Third, it is important to hire experts who understand this field in order to deploy such solutions successfully.

We will be publishing the details of this story for our research members in the coming weeks – stay tuned for more.