Archive for the ‘Store Experience’ Category

What if it all STARTS with the purchase?

Wednesday, August 11th, 2010

By Joel Rubinson

Traditional marketing theory tells us that the purchase is the successful outcome of consumer-directed messages that create awareness which begets interest, desire, and action.

What happens when that is wrong?  What does marketing do when it STARTS with the purchase?

This is an extreme version of what Procter calls “store back”.  However, based on shopper insights research I have conducted, I believe that, for grocery products, over half of first-time purchases are unplanned; in fact, the shopper might not even have been aware of the product before buying it.  In those cases, it all STARTS with the purchase and ENDS with awareness.  The purchase funnel is totally flipped.

When it all starts with the purchase, the role of marketing communications changes.  Now marketing must get the product noticed at shelf and impart meaning to it instantaneously for the shopper.  Packaging, shelf placement, thematic displays, signage, mobile messages that are location-aware, shopper offers based on that shopper’s history, and master brand familiarity become the main vectors for creating meaning.  In this communications model, when someone encounters a product they were unfamiliar with they should be able make sense of it instantly; to tell YOU (the marketer) what the product is about, rather than you having to tell them in a concept statement.  After the product is bought and being used, there is more sense-making that occurs.  If the consumer is really into the product as they are using it, now you have an opportunity to build engagement:  they might join a community, become a fan in Facebook, share comments, start seeking out advertising and recalling it, seek out the brand’s “creation story”, etc.  In this scenario, the impact of brand narrative, brand values, social media engagement, etc. come AFTER the purchase, so they solidify rather than precondition the brand-customer relationship.

Could it really be that it all starts with the purchase?  Well, for certain types of products and retailing situations, I believe it does.  Consider this:

  • - Conduct a study to measure the percent of products bought for the first time that are discovered in-store (I got 50%+)
  • – Do you think the products bought for the first time on impulse in a Kroger’s, Trader Joes, Costco, Target, etc. are all the same and were previously known? If not, then you believe that brand adoption can START via the shopping experience.
  • - Consider shopping styles that people have, reflecting their relationship with a product category.  Can you imagine categories (e.g. artisan cheeses) where shoppers like to explore and find new interesting products to buy?

This last point is perhaps the most important.  People have different shopping styles for different product categories which means that the heuristics they use to make decisions are systematic.  You might not ever buy carbonated soft drinks the way you buy interesting dips that you just tried at a tasting station.  This is where behavioral economics intersects marketing; the study of how people decide is often more interesting than theoretical purchase intentions.  Hence, some products will predominantly be bought via a process that starts in-store.  Others will be bought based more on the traditional marketing model requiring awareness built via mass media. You need to study HOW people decide in order to understand when to start from the traditional end of the funnel and when you start from the other end of the funnel.

When it all STARTS with the purchase, everything that you thought was upstream becomes downstream and the thing that was the most downstream of all, the purchase, becomes the most upstream event.

This is “store back” on steroids.

Now, the researcher in me has to ask the rhetorical question, “Does the marketing community have the research tools to act on this new way of thinking?”  Rhetorical because, I don’t think we do.

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Joel Rubinson is a distinguished expert in consumer and market research and the President of Rubinson Consulting. He can be reached at joelrubinson@gmail.com

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An Inconvenient Truth About Bad Customer Service

Tuesday, June 29th, 2010

By Doug Stephens

The effects of bad customer service may take years to prove fatal but the eventual outcome is almost always corporate extinction.  Despite this, surprisingly few companies turn these negative situations around and actually improve their customer service position.  And as counter-intuitive as it seems, many businesses act like they don’t even care.

It’s a lot like global warming

Whether you believe the science or not, most would agree that the world’s climate is changing.  With this change we are seeing potentially devastating and irreversible impact on the planet’s ability to sustain itself and its inhabitants, for that matter.  Unchecked, the problem will almost certainly eradicate life on earth.

So why have we done so little to reverse the trend?  I mean the survival of the planet is a pretty big deal!

According to Dan Ariely, a professor of psychology at Duke University and author of the bestselling book, Predictably Irrational, there are three primary reasons for our apparent apathy when it comes to huge problems like global warming.  Firstly, the problem seems simply too large for any one of us to comprehend solving.  Secondly, it’s a problem that threatens future rather than immediate devastation.  Lastly, we have trouble visualizing how the little things we do as individuals (like using more energy efficient light bulbs or recycling), can contribute to solving the seemingly insurmountable problem.  The end result is that we don’t become emotionally invested in the solution.  We check out.

This same theory holds true  to systemically bad customer service.  Despite leadership droning on about the need for improved customer service, front-line staff often see the problem as too large, too complex and beyond their individual capacity to correct.

The Prius Effect

Perhaps no other automobile has become as synonymous with the environmental movement as the Toyota Prius.  It seems safe to assume therefore that people who own a Prius are more environmentally conscious than those of us who don’t.  However, there’s no credible evidence of any correlation between driving a Prius and having an elevated environmental consciousness.  Apart from owning a hybrid vehicle, Prius owners are much like the rest of us.  They don’t exercise any more day-to-day concern for the planet than we do.  In fact, one study concluded that a mere 27% of Prius owners made the choice based on a strict concern for the environment – most drive one to save money.  Nonetheless, we perceive Prius owners to be more eco-friendly.  In other words we infer from their choice of vehicle that they actually care more about the environment than they actually do.

So, what if we took this idea of inference a step further?  What if you could create a similar effect when it comes to delivering customer service in your business?  What if you could define specific actions, that if performed, would infer to customers that your employees appreciate them, even if they don’t?   Think about it.  Could you program specific events into the customer experience that make even the least engaged staff member seem to actually care about the customer?

Stop Talking About “Customer Service”

The first step I would advocate is to stop using the term “customer service”.  It’s problematic for a few reasons.  Firstly, it implies servitude and who wants to be thought of as a servant?  Secondly, it’s nebulous, making it difficult for staff to know if they’ve really provided it or not and also making it difficult to measure.  Lastly, it’s too subjective.  Great service to one person may be mediocre to another.

Instead, let’s call customer service something different – I’ve always liked the term the path to purchase.  And let’s agree that along the path to purchase certain defined, measurable and positive events should take place.   These events might range from holding a hotel door open for guests to shaking a customer’s hand– it doesn’t really matter as long as they’re defined, measurable and widely accepted as being positive behaviors.

So now, instead of pleading with staff to “improve customer service” – which is undefined, impossible to measure and open to interpretation, you can be instructing them to perform the specific tasks you’ve engineered into the path to purchase.

As a hotel guest, I don’t really care how customer-centric the bellhop is.  If they smile and hold the door open for me, I’ll infer from their behavior that they care.  As a shopper I don’t know if the salesperson appreciates my business or not but if they come out from behind the counter to give me my purchase while shaking my hand, I’ll infer from their actions that they do value me.

Behavior Drives Emotion

But how do we solve the problem of apathy?  How can we get our staff emotionally invested in delivering a better customer experience?

It’s commonly accepted that what we do affects how we feel.  Change the behavior and you’ll change the emotion.  It follows then that if you get staff consistently doing things along the path to purchase that clearly indicate caring for your customers, eventually those same staff will care about customers.   There may also be staff who choose not to come along for the ride but trust me, with a clearly defined set of actions on the path to purchase, they’ll stand out like a Hummer in a sea of hybrids!

How Consumers Killed Customer Service

Wednesday, December 16th, 2009

By Doug Stephens

A recent Brandweek article titled “Retail Customer Service Stinks” reported that the service received by shoppers in SALEover 1000 retail interactions in the study rated 48.2 out of a possible 100 points – a flunking grade. The study, conducted by the research firm The Salt and Pepper Group, examined retail interactions in 73 stores over a four-month period. It went on to cite specific issues including the failure of staff to identify selling opportunities or handle multiple customers. Essentially, staff weren’t actively anticipating or delivering on the needs of their customers. 

As the report made its way into the retail community it was met with a combination of surprise, disgust, and a dose of self-righteousness by industry experts. There was a landslide of opinion and commentary citing the need for retailers to properly train their staff to sell and the failure of store management to lead their salespeople. Some suggested that it was the fault of retailers who treat employees as costs instead of assets. And others called out the need to get back to the basics of retailing.

The Big Problem

The problem is that retailers didn’t make this happen. We—the consumer—did. The fact that “service stinks” is entirely our fault. We’re the only ones to blame.

We demanded the lowest airfare wherever we flew. We went to the buy-one-get-one sales. We made Walmart what it is today. We camped out for Black Friday. We built the dollar store channel. The bottom line is that we voted with our wallets and customer service lost. We killed customer service.

Minimum Wage = Minimum Service

The consequence of our lust for cheap stuff combined with the retailer’s hunger for profit is that there’s barely a working wage left in it for most retail employees. And yet with most retail workers at or near minimum wage, we somehow expect them to sweep us off our feet and treat us to a profound in-store experience. We expect them to dazzle us with their knowledge and helpfulness. It’s delusional.

And our preference for price didn’t only erode wages, it trimmed recruiting costs, eliminated training budgets, slashed worker medical benefits, and put a virtual moratorium on employee corporate mobility. We made it so. We demanded it.

Service Isn’t Completely Dead… Yet

Despite the devastating effect of discounting on the market in general, there are still some remaining vestiges of service. The Apple Store, Lululemon, Nordstrom, and Publix Super Markets are a few names that consistently rise to the top in discussions on in-store experience. Their closest commonality apart from superior service is that none of them have staked their reputation on price; they haven’t allowed us to drag them into the mud like so many others.  They prove that in a world of price promotion, it’s still possible to differentiate and create remarkable brand experiences that people will pay a premium for. Rarities like Southwest Airlines that manage to combine low price and great service are exactly that – rarities. In the vast majority of cases, we get exactly what we pay for (or don’t pay for) as it were.

The question we need to ask ourselves the next time we’re confronted with bad service is: would we pay more to have a great experience? Would we literally reach into our pockets and pay an extra 20 percent or more for excellent service? It’s not as easy a decision as one might think.

Trades and Concessions

For most of us it’s become a matter of making trades and concessions based on the type of product, the brand, or the store we choose to shop at. Just as we don’t expect the lowest price for a laptop at the Apple Store, we can’t in good conscience demand brilliant service at Sears, whose stores have become a virtual sea of sale banners. And if in fact we really can’t live with that trade-off, then I’m afraid we’ll need to rethink our definition of value as consumers and as a society.

51.8 Reasons to smile

If all we conclude from this study is that retailers scored 48.2 and “service stinks” then we lose again. The real story here is that there are 51.8 points of unclaimed turf for smart retailers who want it. The service gap has never been larger. Never have the opportunities to shine and create remarkable customer experiences been more abundant.

As far as I’m concerned that’s good news for the future of great retail.

Apple Lends A Little Magic to Disney

Wednesday, November 4th, 2009

By Doug Stephens

Walt Disney Company announced earlier this month that in an effort to reverse the ill fortunes of its 340 U.S and European retail stores they would be undergoing a transformation. What was perhaps even more interesting was the fact that they enlisted the help of Apple’s prophetic leader and Disney board member Steve Jobs. Jobs was reportedly brought into the project over a year ago to lend vision and design sense to a concept that Disney is now calling Imagination Park.

While Jobs certainly didn’t do the heavy lifting on the project, he’s credited with urging Disney to “dream bigger”. Rather than simply renovating their stores, he opened Apple’s retail playbook for Disney to study, transferring many of the mechanics of Apple stores over to the new Disney concept. Not surprisingly, his influence yielded a decidedly experiential direction for the new store concept.

While we mere mortals could never dream of engaging the help of someone like Steve Jobs, there are some valuable lessons that we can take from this. Lessons that are transferable to any size of retail operation.

1. Product knowledge isn’t everything: If Steve Jobs can’t name all seven dwarfs it doesn’t matter. What he clearly understands is experiential retailing and that’s what Disney’s relying on to breathe life into its stores. The world really doesn’t need another Mickey Mouse t-shirt but it certainly needs new and exciting retail experiences. So, don’t get hung up on product. Always be on the lookout for great ideas and innovations outside your own product category.

2. Even great companies get stuck: You’d assume that if anyone could stage a store experience it would be Disney, but even they needed outside coaching. Don’t feel bad if you hit the odd creative rut in your business and don’t be afraid to ask for help. Call in people you respect from a wide range of professional and personal backgrounds and keep an open mind. You may not agree with everything they have to say, but you might also pick up an idea that transforms your business.

3. Experiences are tough to copy: Whether it’s a Tinkerbell tiara or snow tires, your product can be knocked off or substituted. Experiences on the other hand, are not only difficult to replicate, they allow you to command a premium for that very same product or service. Choosing what to sell is the easy part — designing the experience through which you sell it is where the true payoff lies.

4. Retail Should Be Fun: If kids don’t have fun in a Disney store it’s conspicuous, but shouldn’t we look at all retail the same way? Why shouldn’t I have fun in my local shoe store too? The truth is, most shopping is merely tolerable but in a world where consumers can get whatever they want without leaving the house, we need to bring the joy back to shopping! Find a way to make your store fun.

5. Innovate in downturns: In tough economic conditions, most businesses put a moratorium on progress and innovation. This is precisely why smart businesses don’t. Such times are not only opportunities to open up competitive distance, but your innovations stand a better chance of being noticed in a quieter market. I’m not suggesting you break the bank but don’t stand still.Who knows…perhaps by applying these lessons to our own businesses, we can all dream a little bigger.

Speaking of Remarkable…

Wednesday, October 28th, 2009

By Doug Stephens

A few months ago I posted a comment to my blog on retailwire.com.  It was in response to an article by Kim Crow, style editor for the Cleveland Plain Dealer. In it she suggested that consumers are finding reasons not to shop local stores and instead continue to shop mass and chain stores. She and her readers cited several reasons for this, including limited store hours, sometimes sketchy return policies and the feeling of being under the microscope of the owner and staff while in the store.

I had to agree with her and added that I felt that sadly, the majority of local independent retail isn’t terribly remarkable.  My point was that many local stores lacked compelling enough propositions to make consumers forgive their short-comings in other areas.  The value equation just doesn’t add up and for consumers and consequently many local stores struggle.

The post was picked up by Lori Smith, Editor for Gifts and Tablewares Magazine and published in her blog.  The result was a great deal of passionate conversation and debate from readers, many of whom were themselves local retailers, about what being a remarkable store really meant.

I was later contacted by the magazine and asked if I’d be willing to do a video interview explaining in greater detail, what I meant by “remarkable” and if I could identify a particular independently owned store that I felt was remarkable.

Here’s video of the interview.

Tell us what you think.  Do you feel that local retail in general is suffering from a shortage of remarkable value propositions?  Are there any retailers you know of that you think are offering remarkable store experiences?  Let us know.

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