Posts Tagged ‘Retail Sales’

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.

The Road To Remarkable: 10 Steps to Standing Out

Wednesday, September 9th, 2009

Shakespeare said “Some are born great (and) some achieve greatness…”.  The same can be said of businesses. There are those that are brilliant from the start but they’re definitely in the minority.  Others will never become great; not because they can’t but because they choose not to.  It’s the businesses in the middle, bursting with potential that excite me the most.   The problem is that many retail companies have difficulty innovating.   They often break down somewhere on the road to becoming remarkable.  Frequently all that’s needed is a creative nudge in the right direction. REMARKABLE 1

There’s no patented formula for innovation but there are creative approaches to differentiating your business.  The following is a creative framework that’s part of a workshop we conduct for retailers that helps them find their mojo, if you will.

Once you’ve decided to take your store to the next level, follow these steps.  They’ll open up your thinking in several different directions and can produce surprising innovation.

  1. Go Deep:  Brands are a lot like people.  Throw a cocktail party and I guarantee that by the end of the night most of your guests will remember the same people.    The people who are interesting, dynamic and deep.  Your unique business story and how you tell it can make you remarkable.  The story behind Tom’s Shoes, for example is quite amazing and draws us in as customers.
  2. Go Narrow: I used to go to a restaurant in Montreal that served nothing but hot dogs, fried bologna sandwiches and fountain sodas.  Every day, from 11:00 am – 2:00 pm they had a line up out the door!  Not only did the quirky, three-item menu make them stand out, it also allowed them to focus on being awesome while offering a limited number of items.  And believe me, they were awesome.  How narrow can your offering be and would it make you stand out?
  3. Go Backwards:  Explore the history of your product.  Look for intriguing methods of manufacturing or selling.  Reach as far back into the history as you can.  You might find some really interesting information along the way that you can integrate into your store experience.
  4. Go Forward:  This is probably the trickiest one of all, but by using research and a little intuition you may be able to anticipate what the future of your product category holds.  Do you foresee anything unique or different happening?   Are there any trends affecting product, pricing structures, merchandising or store design?  If so, is there anything that you can leverage now?  Anything that will be unique?  For example, if you’re a book seller, you’re likely very worried about the emergence of e-books and Kindles.  So perhaps a proactive shift to carrying nothing but collectible, hard-to-find books would allow you to differentiate and carry on successfully.
  5. Go Against:  Identify industry paradigms and challenge them.  If there’s an accepted standard, ask yourself if there’s merit in breaking it.  Even simple things like merchandising conventions, when turned on their ear, can be exciting.  Here’s a vitamin store in Austin Texas that looks anything but conventional.
  6. Go Crazy:  Literally make a list of the craziest things you could do to make your store stand out.  Don’t just be “a little” of anything.  Be a ton of it.  If you’ve established that service is your competitive advantage then don’t just be marginally better.  Literally shame your competition.  Blow your customers away.  Become notorious for your service.  Then and only then will it be remarkable.  Jungle Jim’s Grocery in Fairfield Ohio carries 1,200 varieties of cheese.  Why?  Because they established that selection was their competitive advantage and in order for it to be remarkable, they would have to offer a selection of epic proportions.
  7. Go Naked:  Before you get too excited, I mean try stripping your business concept right down to the bare essentials. Could your sales process be remarkably simple?  Could your assortment be remarkably clear?  Could your pricing be remarkably transparent?  How much excess and confusion can you take out of the value proposition?  Sometimes layers of process, protocol and paperwork get built into a business over time.  Can you simplify it and would it be remarkable if you did?
  8. Go Home:  Is there a point of origin for your product category; a kind of birthplace or Mecca so to speak?  Maybe a visit to that place will avail fresh thinking that can help you differentiate.   If you sell fine china, perhaps a trip to England or Holland would get some ideas flowing.  Sometimes it’s the archaeology of things that makes them most intriguing.
  9. Go Abroad:  Too often, we build businesses based on our narrow domestic understanding and sensibilities.  Starbucks took the coffee house concept that was common in Italy and imported it to the U.S. where it was unique and exciting.   Explore how your product is sold in other countries.  You might be surprised at some of the amazing concepts you could import into your business.
  10. Be Relevant:  Above all else, be relevant.  Throwing a pie in the face of every customer who walks into your store would definitely be remarkable.  However, I’m guessing that it would also be irrelevant with respect to what you sell.   Your innovations should complement the experience of buying your products or services, not impede them.  Remarkable is only valuable if it’s relevant.

The most important thing for you to remember is that the distance between ordinary and extraordinary is often not as great as we fear.  They key lies in beginning the journey.

Help Me Do The Right Thing!

Friday, August 21st, 2009

By Doug Stephens

You’ve likely seen the relentless stream of news articles and blogs lately touting the “new consumer mindset”.  Terms like “post-consumerism”, “belt-tightening”, “frugal chic” and other catchy slogans are being used to put a handle on sluggish consumer activity.  It seems that if we can sum up a problem with a snappy catchphrase it makes it easier to rationalize.RESPONSIBLE

The range of opinion on today’s consumer is wide and vacillates from day to day. One piece of data may show signs of a consumer comeback only to be negated by a different statistic the following day.  All of this adds to both the confusion and desperation among retailers.

The conservative view is that buying behavior will be negatively altered for the long-term.  This camp suggests that consumers will radically change their purchasing habits and indeed even dial-down their lifestyles to accommodate the new normal.  In contrast, the liberal view is that as soon as the dark clouds of economic doom part, the consumer will return to their giddy pre-apocalyptic level of spending.  Presumably somewhere between the two positions lies the truth.  Attempting to weed through fact, fiction and journalistic hyperbole is a definite challenge.

Fortunately, a good friend and former colleague of mine sent me a piece of research last week by Yankelovich and The Futures Company that provided one of the most clear, reasonable and cogent points of view I’ve seen on the subject.  Firstly it made the point that in every economic downturn, the Press has tried to convince us that consumers will consciously live below their means for an extended period.  In fact, this has never been the case…ever.  Secondly, it suggested that what we’ve really entered into is an era of increased personal and social responsibility.  We’ve awakened to the idea that we need to live within our means – not below them – but within them.  Along with this sense of fiscal accountability there come residuals, like an enhanced sense of accountability for the health of our bodies, our communities and our planet.  The live now pay later philosophy is outdated.  The days of on-the-spot credit approval and a free iPod with every approved credit card application are (thankfully) gone… for now.

As a result of this new sobriety, consumers will gravitate toward retailers who they perceive will help them in their quest to be more responsible – that will help them do the right thing.   Assist them in buying the things that they need in a manner they can afford.  Offer them products that are healthy in quantities that are sensible.  Supply choices that reflect a higher level of sustainability.  None of this denotes cheap, although price is and always has been a qualifier.

Ironically, the response of many retailers has been to attempt to bait consumers into buying using (almost constant) price promotion.  Simply beating the price down to the point where, need it or not, the consumer might give in and buy.  Clearly this doesn’t address the underlying needs and I believe that’s why it’s largely failed to stimulate activity to this point.  If anything, convincing consumers to buy something they may not truly need doesn’t solve the problem, it exacerbates it.

However, resurrecting programs like layaway plans might help, especially for younger consumers who could benefit from the buy-with-cash lesson.  Recommending products that last longer and therefore save money in the long-run is another form of responsible guidance to the consumer.  And here’s a thought…how about rewarding customers who pay with cash instead of credit?  There are many ways we can recalibrate store and company policies to help the consumer to be more conscientious.

In the end, consumers will always aspire to having more.  No recession has or will eradicate the fundamental human desire for an improved lifestyle.  What has changed is how we go about acquiring the things that furnish that lifestyle.

I expect that retail winners over the next number of years will not simply be those with the lowest price.  The companies that rise to the top will be those that become trusted by consumers to help them do the right thing – the responsible thing, for everybody’s sake.

It’s Not Just A Box

Sunday, July 12th, 2009

My wife bought a pair of shoes today and like most shoes, they came in a shoe box.  But this shoe box was unique.  The entire surface was printed in black and white text, with words of varying sizes and fonts.  At first these words appeared to be scattered without any real design intent.  When you looked closely though, the box very cleverly told the story of the manufacturer and their brand.  It was a very creative piece of marketing.SHOEBOX

Now, contrast this to the countless numbers of shoes sold every day in non-descript (and highly forgettable) boxes that serve no purpose beyond transportation and storage.   Apart from a logo, size and style, they’re mere pieces of cardboard.  Just a box!

The company that made these shoes obviously didn’t see it that way. I can only assume that somebody there said “wait a minute; it’s not just a box”.  Instead they saw an opportunity to tell a unique and compelling brand story – a novelty that would make buying their shoes a little more memorable.  It would have been infinitely easier and probably less expensive to adopt the “just a box” mentality but they didn’t.  So, in the end, what most shoe manufacturers treat as a mere packaging cost became a great branding piece and a differentiator for this company.

How many things in our businesses do we treat like shoe boxes?  How many things do we put in front of customers that are purely functional with no added value?  How many chances to be remarkable are right under our noses and not being realized?

What if tomorrow we adopted a new point of view?  For example, what if your store windows suddenly became art gallery showcases where your unique brand-story came to life every day?  Would your store windows look any different?  What if your staff were really brand-ambassadors both inside and outside the store – walking embodiments of what your business is all about?  Would your interviewing process change at all?  What if that bland recorded message that customers hear when they call your store became the most compelling sales pitch of all?  What if?

Tomorrow when you visit your website, open your store or simply sit down to do your job, start the day by saying five simple words.  It’s not just a box.

See what happens.

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