April 16, 2007
Clueless Companies Don’t Get Customers
It’s no secret many companies in retailing and elsewhere have a perception of performance that bears little resemblance to the views of consumers.
We recently came across a reference on Forrester Research’s Marketing Blog about research conducted by Cindy Commander of Forrester’s CMO Group which found that 80 percent of companies reported providing a superior customer experience. When consumers were asked the same question, only eight percent saw it the same way.
So why such a discrepancy between what customers and companies think? And how can this situated be corrected?
There are a number of obvious factors to explain the number of companies without a clue.
Number one on our random (and clearly incomplete) list is that company practices rarely match the rhetoric of top executives. Some fail to ask consumers for their opinion or seek answers to those issues most important to shoppers.
Some businesses are guilty of creating an organizational focus on delivering on management’s objectives and assuming a positive customer experience will follow.
There is also the tried and truly failed practice of soliciting consumers’ opinions and promptly acting on the adages: “Don’t just do something, sit there” or “Just ignore it and it will go away.”
A personal case in point was an experience with a regional supermarket chain store where first a department manager (week one) and then a store manager (week four) received a request for a specific natural food item (with a personal guarantee that a minimum of five units would be moved per week). The result: no action was taken by the store. We didn’t complain but were sure to find an alternative source for the item.
A short period of time after this experience we ventured onto the company’s website. We (along with everyone else) were encouraged to provide feedback and send requests to the company. Within 24 hours, we received an email confirming receipt of our request along with an assurance it would be passed to the appropriate person at headquarters. A few years later and we are happy (truly) to say the local health food store proprietor looks forward to our weekly purchases while the chain in question has yet to respond with any answer whatsoever.
Another trap many fall into is evaluating performance against those of peers in the same category. The fact that others may offer an unsatisfying experience is not taken into consideration as long as performance meets or exceeds that of those considered direct competitors.
Discussion Question: How do you explain the disparity between how companies view the customer experience versus consumers’ opinion on the same subject? What understandings are key to improving the consumer experience at retail? Conversely, does it make sense to always give consumers what they want?
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Several of us have already said it: The only way to know what’s really happening at the store level is to have a solid mystery shopping program in place–and where the shops are only one part of a continuous process: measure, train, remeasure, reward/retrain.
I also noticed a comment about there being no clear link between customer service and sales. That may be true over the short term, and especially if a company’s not measuring customer satisfaction.
But at my client Maritz Inc., we’ve found that when you do measure customer satisfaction, especially over the long term, high scores track right in line with higher sales and margins.
Finally, I’m fascinated by a third notion folks keep bringing up here–the idea that it’s easier to get new customers than keep old ones happy. Again, the numbers I see in my work with Maritz tell a totally different story–that it costs five times as much to win a new customer as it does to keep a current one. Now, maybe the numbers I see are about more complex sales–high-ticket consumer sales, or b-to-b sales processes. But given the ad overload in consumer media that just keeps getting more and more crowded, I have a hard time believing that even a mass merchandiser’s ad budget can really bring in enough new traffic to cover the cost of offending current customers on a regular basis.
Retailers need to do a better job of accepting the fact that their customers have little brand loyalty (in most, not all instances) and are on the go and mobile. 2 jobs, 3 kids and NO time left for anything else.
The really innovative retailers capture the pulse of their customers via feedback and customer surveys and reach out to their customers how they live–mobile–via cell phone and text messaging and in some cases voice messaging.
Additionally, those retailers should understand that newspaper readership for those under the age of 45 is declining and a non-factor in today’s retail world. People today want “green.” Paper and fuel are associated with environmentally harmful practice. Mobile, phone and email used strategically and thoughtfully cost less, saves the environment and resonates with consumers.
Interesting article and comments. Interesting also because it could have been something I read 10 years ago as well. The customer service connection between service and profits seems tautological. It should be common sense, which, as someone else has already pointed out, is not so common.
A mystery shop or other customer measurement would help. Execs spending time on the floor every quarter (non-peak hours) interacting with customers would help–especially if they wore the associates’ “hat” for a shift. But nothing matters if execs view customer service as a marketing campaign and not a compelling business principle.
Companies should know what they are selling and what sets them apart. If they are trying to compete based on service, they should ask their customers and listen. While asking the execs will illustrate the disconnect, the customers’ opinions are really all that matter.
That said, however, a measurement of customer opinion should truly measure what the business stands for: if the underlying business principle for customer satisfaction is service, then ask customers about their service experience first and value second. Listen, and make improvements as necessary. If the underlying business principle is value, then ask customers about pricing and selection first, as it relates to their satisfaction, not service.
An assumption here is that researchers and retail employees are not consumers and do not live in pods of consumers. When they leave home in the morning, they put on their “stupid hats,” only to return home at night and cry out, “What have I done?” Then, they do the same thing upon awakening in the morning. It would be a kind of reverse vampire/werewolf syndrome, wreaking havoc during the day and being normal people at night (and on weekends, vacations, and during holidays–unlike Dracula; but Werewolves always observe Dog Days).
No, they’re consumers just like all of us (but keep the wooden stakes and silver bullets handy). However, I’m reminded of Prez Bush 41 when he expressed surprise upon seeing scanner technology in a grocery store, and of John Kerry when he identified his favorite baseball player as Boston’s “Ortez” (it’s David Ortiz). Often the folks at the top levels of business and government are so disconnected from the everyday life experiences the rest of us share that they make similar stupid pronouncements and, subsequently, decisions. (I’m reminded, too, of Diana Ross’s recent visit to American Idol as a coach. She cautioned one contestant to “be sure to pronounciate every word clearly.” I wonder if she does her own shopping or follows baseball.)
Consumers lie to researchers. Flat out, they lie. Everyone experienced with consumer research knows that respondents usually provide the answer they believe is expected. “Hi, how do you feel (not think, by the way) about the customer service at this store (accompanied by a sour look on the interviewer’s face from standing in the sun and on their feet for several hours)? What’s a customer unloading an over-priced cart-full of groceries into their car supposed to say? Consumer interviews are like internet chatrooms and blogs, they attract and consist of negative comments.
Some years ago, a friend of mine was recruited to drive Sam Walton to the airport. During the drive Sam introduced the topic of a new pet food recently introduced by his Wal-Mart chain, and expressed concern that his dog’s poop was the wrong color after consuming it. “Too yellow.” That’s a guy who understood the pulse of his business.
I agree with those who have pointed out that what the customer and what the company means by “great customer service” may be two entirely different meanings. It is a false assumption that just because people are shopping your store they are satisfied with the service. Grocery stores especially are so cookie-cutter and undifferentiated. If the consumer has no real choice, they can only decide where to shop based on location or the weekly sales. That’s changing though, and alternative competitors are emerging who are differentiated and place a premium on customer service. They’re going to be pulling more and more market share from the mainstream grocery each year.
All of these ideas and explanations reveal a problem that occurs in every organization at every level and in every arena (not just service): when information is very significant and very uncomfortable (High-Intensity Information), it is processed by an element of the organization’s Master System that distorts, covers up, ignores, and blocks this information. Interestingly, this isn’t the fault of company management, because, believe it or not, they don’t control the Master System, it controls them. The only solution is to dismantle the element of the System that processes this information in this way.
Many fixes proposed in this discussion have failed to work, according to our data. The assumption that company management controls the company is not supported by the data we have (or by the anecdotal evidence of those of us who have watched executives make private resolutions they were unable to stick to, who have watched new executives make the same mistakes as the previous ones, and who have watched large companies be unable to make the changes championed by senior management).
Most retailers have no real idea of what customer service they are providing. The same can be said for suppliers as well. What a company thinks or believes simply does not matter. What matters is what the customer thinks. Customer service can only be viewed through the eyes of the customer. Management wants to know how they are doing with customer service. Department managers create reports that are biased to their own case. What manager wants to rock the boat and have management come down on them for not providing the customer service? The end result is great customer service reports to management.
In too many situations, executives seem to not only feel they have the “pulse” of the organization but seem to be reluctant to really go out and see what is happening in their retail outlets. There are very few that shop their stores at odd hours, holidays or weekends when the shopping experience is very different that 10 AM on a Tuesday morning.
I have always wondered if asking consumers what they think of your store at your competitor’s location might give a better insight as to why consumers are not shopping or have changed where they shop rather then continuing to reinforce a perception.
Resources are a key to the situation–you need to have people and simple technology available to allow retailers to help customers/consumers get their answers and follow-ups. Many retailers have cut back to be more competitive and have moved to the “price is the value” side of the curve. When you move to the “benefits are the value” side of the curve (Nordstrom, Marsh, Bath and Body Works, etc.) you will see more resources and more loyalty (and margin)–and you will get your questions answered. I spent 20 minutes in a retailer store yesterday looking for duct tape. After searching for and finally finding an employee, she pointed it out to me. If I would have gone to an Ace Hardware, I would have had it in one minute.
George raises two very different points which both merit discussion.
First, there is a huge discrepancy between how retail companies view their performance and what shoppers really feel. Why is this? Isolated corporate execs are just part of the problem. Challenging retail techniques make evaluating “service” very difficult. When consumers are asked via phone, mail or internet to rate their experiences, they are much more generous. The frustrations of the moment at the shelf — facing out-of-stocks or standing in long lines — are somehow forgotten. After the fact, shoppers want to justify their choice of outlet and are much more supportive of the experience. What is needed is better, more immediate in-store shopper research. Getting shoppers at the point of purchase — or frustration.
Second, the questions of whether retailers should meet every shopper request. For most retailers, that is impossible. However, what retailers need to do is make shoppers think they are meeting every request. If the retailer did not view it prudent to stock George’s special request, they should have provided either a recommended alternate source of purchase (maybe online or mail?) or politely persuaded the shopper to try a substitutable product (with some free goods to ease the transition?). The biggest error here was not communicating the action and reasons behind it with the shopper.
The only statistic that matters is the customer’s evaluation of customer service. I think all of the reasons/excuses listed here have some degree of relevance in this apparent disparity. I wouldn’t even collect data on how the company feels it is doing. Instead, the key is to constantly assess from the customer’s perspective how you are doing, take action on shortcomings, and follow up to see if the customer is satisfied by your actions. Unlike today’s soggy Boston Marathon, delighting the customer is a race with no finish line.
Customer service is usually evaluated internally, if at all. The marketing department goes into the store and asks questions and observes. Companies are naive to believe that the staff doesn’t act differently than normal when someone visits from corporate. Customer service should be evaluated by outside firms that will push the envelope and truly get a pulse on what level of service your company is delivering.
Top executives are guilty of the “rah rah” speak-it-and-it-will-happen speech on customer service. But quite frankly, how many CEO’s say, “We are poor in customer service and things have to change”? In the executive suite, they either don’t know or they want to drink the Kool-Aid. Or maybe they’re afraid that investors and the board will find out!
Recently, I worked with a company that did a survey. The results were really bad. When I finally read the corporate internal release on the results, it was totally different. The company spin was that the company was the best in the industry and everyone loved to work there and everything was great. Certainly a waste of money to pay for a survey.
Also, the process of gathering information should also consider that generally people are nice and don’t want to say bad things about other people or companies. So questions should be developed that get to the heart of a problem.
Retail executives often admit privately that their customer service = self service = no service. But it’s hard to say that publicly. Some retailers claim their service is “competitive,” which is a codeword meaning “same as everyone else who’s mediocre = self service = no service.” Very few companies use mystery shops and other objective measures to improve service. Furthermore, as Michael Richmond’s duct tape example shows, service costs money and some people are willing to pay the price. But not all. The worst part of the “our customer service” bluster: your employees’ reaction. They will decide whether the boss is a hypocrite or worse. Because employees know whether the service commitment is merely a slogan or if it’s real.
There’s a reason why it was the Emperor, the top guy, who had no clothes though he thought he was finely dressed. It wasn’t someone in mid-management and it sure wasn’t one of the servants.
People in ‘power’ pretty well always have rose colored glasses about the performance of the organization they run. They do that for psychological preservation. In my own organizational research we could consistently count on a statistically significant difference between the ratings of senior executives and the rank and file employees. In short, the lower into the organization you go the lower the scores. If senior executives gave the business a ranking of 80, mid-managers would be at 50, employees at 30 and–like this article reports–customers at 10.
The reason? Control. The more in ‘control’ one is the more denial of unpleasant reality. The mistake is to think this is a customer service issue because it’s not. It’s a management or organizational issue. The central principle is “How we are managed is how we will serve.” Change how people are managed and you’ll change how customers are served.
I’m reading an interesting book right now called “Stumbling on Happiness.” It focuses on the ever changing framework from which we view happiness…which one could associate with satisfaction.
Customer satisfaction evolves. Most companies are relying on outdated information. Also, this book discusses the concept of large numbers…meaning that information garnered from small samples are highly variable and can be influenced by a myriad of factors. Larger samples will be more reliable. Nothing we don’t know…but most companies work off of the opinions of a very small sampling of people. And, as many have already said, there are of course many companies that really don’t give much credence to what shoppers want at all. So at the end of the day, I would conclude that most companies are either ill prepared to address customer satisfaction from a resource (human and economic) standpoint or have made the short term decision that it is too costly and not worth the ongoing investment of time and money. “Let the other guy do it and then follow by imitation” seems to be the prevailing philosophy.
Some equate the concept of “superior customer experience” with superior customer service/the functional aspects of customer satisfaction. This is where part of the disconnect is, for sure.
My rating of the experience at an Apple Store, Best Buy, or Trader Joe’s has very little to do with the lines, tidiness of the shelves, etc. and probably can range from 50-100. Even a bad day at an Apple Store is good! On the other hand, my satisfaction at a Burger King can only range from 0-65, because all there is, is the Whopper! There is no value creation for me from the shopping experience…only functional product delivery. If the Whopper is hot and fresh, you get a 65 (if you have the right measurement instrument that is!)
So, putting this together, why is there a disconnect between customer experience and perceived experience from corporate? Some possible reasons:
1) Measuring satisfaction metrics alone and thinking that is all there is to experience;
2) Not measuring anything at all consistently;
3) Measuring things based on recall, rather than transactional research (e.g. a number to call is put right on the receipt); the recall of specific triggers for the emotional part of annoyance can dissipate quickly….
4) I like the comment from some others about execs not being in the store–maybe 3 days each quarter of store duty would help that.
George Anderson’s article about “clueless companies” is reality for so many reasons. The only mistake that is worse than not asking for customer opinions is when companies ask, and then don’t listen, or at the very least, fail to respond with a thoughtful reply. Finally, I would suggest to all companies not to post surveys online, nor inside the store, if your company truly does not have an infrastructure in place to review customer comments with decision making management, and then to reply, and finally to consider actions and changes, if appropriate. Granted, not all suggestions nor criticism merit change, but all comments should be reviewed and answered in a meaningful and sincere way.
The disconnect between corporate and customer is due to the corporations love-in with their own company and unwillingness to consider that they are not the best option out there.
It is far easier to say “we’re a large company and it is difficult to weed out the staff that provide poor service” than it is to critically look at the corporate culture and determine if the actions and direction from senior management foster a customer-oriented outlook.
How many executives actually get out and use their store’s services at peak times as opposed to Friday afternoon on the way home? How many stroll the aisles and try to get assistance on products that they don’t know anything about? Most stick with their own categories and comfort zones–this is what prevents them from truly understanding their customer’s experiences. It would be better to have the staff from human resources, IT or accounting comment on the store experience than it would be for the marketers and merchandisers. They are the ones that need to hear unbiased opinions.
I think the biggest problem in providing “good service” is justifying the business case for making the changes that are needed to actually provide that “good service.” There’s no clear tie between customer satisfaction and sales. Sure, people instinctively can see that if customer satisfaction is high, then sales should be doing well, but when it’s the piece by piece and day by day projects that are on the table, the ones that “improve customer satisfaction”–especially when you’re talking about incremental improvements–are going to get pushed aside for the ones that deliver “real” ROI.
Virtually all retailers pay “lip service” to customer service but the true measure is in what they do as opposed to what they say they do. Same with customers…you can ask them who delivers and what they expect but the true measure is in where they buy. Surveys are questionable tools in retailing and the best retail executives are on the floor leading and directing to insure that what is promised is what is delivered.
Part of this is a consistent problem for companies regardless of the area–they always over rate their own performance. By definition, half of all retailers (or other companies) will be in the bottom 50% of the performance curve for any area of business, from customer satisfaction to supply chain performance, but nowhere near 50% will ever say they are in the bottom half.
This is a problem. There is a bell curve for everything, and companies should make an effort to find where they really stand.
That said, I am always a little suspicious of this kind of data. My first question would be: were companies rating themselves against the competition and consumers based on their ideal expectations? Big difference in the frame of reference.
Then, as always, it’s a matter of cost. I don’t think too many people consider Wal-Mart a “superior experience”–until they see the extra money in their wallets. The key is understanding if you are trying to compete based on “customer experience”–or something else.
Disparity between how companies view the customer experience versus consumers’ opinion on the same subject primarily stems from the company executives having no ability to see from consumers’ view point. This mostly comes from the fact that they hardly shop the stores where they work.
I bet Bob Nardelli never shopped in Home Depot, otherwise the customer service there would not have gone down to the level it did. And if they do, most likely, the staff at the store where they shop know the identity of these executives so they receive better service than a typical customer would. This can be remedied quickly by making it mandatory for every manager/executive above certain level to work in a store for a week every year between Thanksgiving and Christmas. This was the norm where I worked. When these individuals came back to their respective jobs from their one week in the store, they had a completely different perspective!
While it may not be necessary to meet every shopper’s need or request, at least it is civil and responsible to let the requesting customer know why you cannot honor that request so the customer knows what to do next.
Customer service is common sense, but as some one has said, common sense is not common. If it were, we consultants would have no business!
Service in America is an intriguing topic. It gets me both excited and frustrated! Why? Because no matter what sector you challenge, one can find examples of disconnect between business and consumers when it comes to superior service. Why is that? It is logical to believe that companies who are well run and who seek to please the ever elusive consumer would be smart enough to provide the basic satisfaction that the consumer demands.
The answer is simple really. I believe that all consumers have an “Unarticulated Need” that we expect to be met. This “Unarticulated Need” is our desire to be satisfied without verbally expressing the need. We expect this especially when paying our hard earned money in exchange for goods or services. An example: when I show up at a restaurant, I expect the food to be clean, hot, with adequate portions and friendly service. I don’t regularly make that announcement but I expect it to be so. Don’t you? Recently I went to a national establishment where I dine quite a lot. I told the “manager” (before I paid) that I expected the food to be hot or I did not want it. I even presented my VIP card to show that I am a frequent customer. I felt the need in this case to “Articulate” my desire and not just leave it to chance. Even with all that, you guessed it, I was served food that not only was not hot but was probably yesterday’s leftovers. This “manager” clearly jeopardized a VIP customer who often brings business customers to the establishment. Why? Was it because there was pressure to get rid of yesterday’s product and not have it count as waste?
While this is but one isolated example, it speaks volumes about the corporate office’s inability to translate to the point of customer contact. The message is simple: “If we take care of our customers they will take care of us.” Ironically, this is especially true if the customer already displays a precondition to patronize the store.
Let’s get this straight. The customer is certainly not always right. However, finding more ways to make customers less wrong will serve business well. While there are many eloquent arguments that can be made for complex solutions delivered by expert presenters, I offer this: executives must spend more time teaching, coaching, setting the example and rewarding workers who fulfill the customer’s “Unarticulated Needs.” This is true no matter what the industry. After all, Costco and Nordstrom both have a reputation for getting this done don’t they?
Sometimes, when faced with customer insights that conflict with corporate initiatives or direction, it can be easy to explain the insight away by thinking that “customers don’t know what they really want.” Ignoring the cold, hard truth that customers insights offer inhibits growth, at the very least.
First, executives live in rare air. I worked for a Fortune 50 CPG Company whose CEO admitted that he had never cleaned a bathroom or cooked a meal. Was he truly qualified to make decisions about HH products? (I know that’s blasphemous.)
Second: What was the gender composition of the survey among executives? Among consumers? Many execs–even a critical mass of them–are men. The male shopper’s mindset is completely different from women’s, who still comprise the majority of shoppers.
Finally, retail executives are financially rewarded when they co-sign each other’s happy story.
Customers vote with their feet and pocketbooks. Period. Either they get the service they desire and return or they do not. I find the number of 80% of companies saying they give great customer service unreliable, as there appeared to be no definition of what that meant.
Executives love to put the blame for lower sales on everyone but themselves. It’s not the product mix, endless sales, fewer clerks, rotten service–it’s Wal-Mart up the street, the economy, weather, anything but their fault.
I received the “legendary” service of Nordstrom once in twenty-five years of shopping. I still go there with lower expectations, but notice the great disconnect from all the articles and books.
It is about choices. Companies very often choose to take the easy way out. They spout, from the executive office, that the customer is number one. Unfortunately, creating a customer service culture costs money. When money is tight, the first thing to suffer is the money spent on improving customer service.
Customer service is whatever the customer perceives it to be. The best customer service companies listen to their customers. They use IVR (Interactive Voice Recognition) surveys or they use web surveys or customer intercepts. The companies then retrain their employees/associates and then measure if that retraining has been successful. They use a third party mystery shopping company to provide objective feedback.
Sending in corporate employees to a retail location to perform an evaluation has no value. The store associates will be on their best behavior. A well planned, well focused mystery shopping program will give the measurement and feedback needed to assist in the modification of behaviors.
Once behaviors are found to be modified, then once again asking customers for feedback is important.
But if customer service is only lip-service, then there is a tremendous disconnect. One must talk-the-talk, but more importantly, they must walk-the-walk. Improving customer service and listening to the customer will generate more sales and profits.
The responses back to the issue of Clueless Companies are all very well positioned. In the last twenty years or so living both as a retailer and as a retail consultant looking back in, I find it amazing that these same realizations hold true.
Executives tend to spend way too much time off of the sales floor and in their offices surrounded by well meaning but gutless individuals who know that any negative commentary only gets them a ticket to early retirement. Then when the executive eventually gets to a store for a visit, everyone is the store has been informed ad nausium, and the store op’s people scurry around to paint a “rosy colored view.”
Retail all starts with “embracing the culture of customer centricity” and rewarding and incentivizing this behavior. Everyone talks a good game but few companies actually know much about their customers. Issues like customer profitability, likes, dislikes, incentives, behaviors, and other attitudinal data tied to specific SKUs or transaction histories tend to get pushed into IT or Marketing for analysis. There, either Marketing or IT now has to work to get the attention of their executives to operationalize a strategy that results in either higher comp sales or lower SG&A.
All this hard work tends to go out the window when the store has several negative flash sales reports and the new strategies quickly become abandoned.
If you want to improve customer service, you first need to define realistic metrics from the customer point of view, not the other way around. Metrics take time and in the age of “I want it now,” few executives are willing to take the career risks of initiating significant change to positively effect the outcomes.
With regard to the poll, I wish there were a choice that allows a combination. Very often poor customer service is because Research into consumer wants and needs doesn’t take place–top execs assume they know the answers; Consumers are asked the wrong questions and Consumers provide answers but companies don’t respond. I would also add the top management doesn’t empower employees and associates to address customer concerns.
I’ll give a perfect example of companies not responding. As we all know, and as has been documented by many market research companies, the way a retailer handles returns has a large impact upon a customer’s perception of customer service. Yet very few companies want to spend the extra dollars necessary to evaluate the way returns are handled in their stores.
My company ICC Decision Services provides customer feedback and mystery shopping programs to many of the nation’s largest retailers. We have found that the best retailers spend the money the listen to their customers, modify the behaviors of their associates, measure that the modification is taking place and realize that this is an ongoing process. These retailers see an increase in customer satisfaction and also see their revenues and profits increase.
Customer service is based on expectation. When a customer goes to Wal-Mart they know the only person going to greet them is the guy at the door. No one is going to help them find what they are looking for and the cashier is going to treat them like gum on the bottom of their shoe. Customers are “okay’ with this because the price is cheap or it is the only place they can think of to get a certain item. The expectation is set and set low.
Same customer goes to Sears, they expect that they will be greeted by everyone, have employees at every corner waiting to serve them, and an abundance of happy, smiling cashiers so they won’t have to wait in line. They also expect all of this “service” not to cost anymore than Wal-Mart prices. Customers want it both ways.
Service has a price. Neither management or the customer wants to pay it. So you do the best you can to keep up the positive attitude of minimum wage part-time employees so they will take care of your customers. Hiring and retaining a seasoned staff is just too expensive just ask Circuit City.
It can be done. But it is a hard sell to the average p-t associate who has not either received the benefit of customer service training and its value to their advancement/earning ability (shame on us) or developed a work ethic (shame on them and us)
1) A daily coaching session with the work force can be the simplest way to achieve it (along with a follow up with second and third shifts)
2) Mentoring the crew is a fine way as well… If you going out of the way to provide service, you stand a much better chance of asking your associates to do so.
3) Driving home the point. I had a great deal of success pointing out to my associates that THEY are face of the company to the costumers. THEY meet and greet the customers, THEY assist in the sales. THEY conclude the visit by ringing up the purchase. The sales associates will make the biggest difference in a customer’s shopping experience.
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Several of us have already said it: The only way to know what’s really happening at the store level is to have a solid mystery shopping program in place–and where the shops are only one part of a continuous process: measure, train, remeasure, reward/retrain.
I also noticed a comment about there being no clear link between customer service and sales. That may be true over the short term, and especially if a company’s not measuring customer satisfaction.
But at my client Maritz Inc., we’ve found that when you do measure customer satisfaction, especially over the long term, high scores track right in line with higher sales and margins.
Finally, I’m fascinated by a third notion folks keep bringing up here–the idea that it’s easier to get new customers than keep old ones happy. Again, the numbers I see in my work with Maritz tell a totally different story–that it costs five times as much to win a new customer as it does to keep a current one. Now, maybe the numbers I see are about more complex sales–high-ticket consumer sales, or b-to-b sales processes. But given the ad overload in consumer media that just keeps getting more and more crowded, I have a hard time believing that even a mass merchandiser’s ad budget can really bring in enough new traffic to cover the cost of offending current customers on a regular basis.
Retailers need to do a better job of accepting the fact that their customers have little brand loyalty (in most, not all instances) and are on the go and mobile. 2 jobs, 3 kids and NO time left for anything else.
The really innovative retailers capture the pulse of their customers via feedback and customer surveys and reach out to their customers how they live–mobile–via cell phone and text messaging and in some cases voice messaging.
Additionally, those retailers should understand that newspaper readership for those under the age of 45 is declining and a non-factor in today’s retail world. People today want “green.” Paper and fuel are associated with environmentally harmful practice. Mobile, phone and email used strategically and thoughtfully cost less, saves the environment and resonates with consumers.
Interesting article and comments. Interesting also because it could have been something I read 10 years ago as well. The customer service connection between service and profits seems tautological. It should be common sense, which, as someone else has already pointed out, is not so common.
A mystery shop or other customer measurement would help. Execs spending time on the floor every quarter (non-peak hours) interacting with customers would help–especially if they wore the associates’ “hat” for a shift. But nothing matters if execs view customer service as a marketing campaign and not a compelling business principle.
Companies should know what they are selling and what sets them apart. If they are trying to compete based on service, they should ask their customers and listen. While asking the execs will illustrate the disconnect, the customers’ opinions are really all that matter.
That said, however, a measurement of customer opinion should truly measure what the business stands for: if the underlying business principle for customer satisfaction is service, then ask customers about their service experience first and value second. Listen, and make improvements as necessary. If the underlying business principle is value, then ask customers about pricing and selection first, as it relates to their satisfaction, not service.
An assumption here is that researchers and retail employees are not consumers and do not live in pods of consumers. When they leave home in the morning, they put on their “stupid hats,” only to return home at night and cry out, “What have I done?” Then, they do the same thing upon awakening in the morning. It would be a kind of reverse vampire/werewolf syndrome, wreaking havoc during the day and being normal people at night (and on weekends, vacations, and during holidays–unlike Dracula; but Werewolves always observe Dog Days).
No, they’re consumers just like all of us (but keep the wooden stakes and silver bullets handy). However, I’m reminded of Prez Bush 41 when he expressed surprise upon seeing scanner technology in a grocery store, and of John Kerry when he identified his favorite baseball player as Boston’s “Ortez” (it’s David Ortiz). Often the folks at the top levels of business and government are so disconnected from the everyday life experiences the rest of us share that they make similar stupid pronouncements and, subsequently, decisions. (I’m reminded, too, of Diana Ross’s recent visit to American Idol as a coach. She cautioned one contestant to “be sure to pronounciate every word clearly.” I wonder if she does her own shopping or follows baseball.)
Consumers lie to researchers. Flat out, they lie. Everyone experienced with consumer research knows that respondents usually provide the answer they believe is expected. “Hi, how do you feel (not think, by the way) about the customer service at this store (accompanied by a sour look on the interviewer’s face from standing in the sun and on their feet for several hours)? What’s a customer unloading an over-priced cart-full of groceries into their car supposed to say? Consumer interviews are like internet chatrooms and blogs, they attract and consist of negative comments.
Some years ago, a friend of mine was recruited to drive Sam Walton to the airport. During the drive Sam introduced the topic of a new pet food recently introduced by his Wal-Mart chain, and expressed concern that his dog’s poop was the wrong color after consuming it. “Too yellow.” That’s a guy who understood the pulse of his business.
I agree with those who have pointed out that what the customer and what the company means by “great customer service” may be two entirely different meanings. It is a false assumption that just because people are shopping your store they are satisfied with the service. Grocery stores especially are so cookie-cutter and undifferentiated. If the consumer has no real choice, they can only decide where to shop based on location or the weekly sales. That’s changing though, and alternative competitors are emerging who are differentiated and place a premium on customer service. They’re going to be pulling more and more market share from the mainstream grocery each year.
All of these ideas and explanations reveal a problem that occurs in every organization at every level and in every arena (not just service): when information is very significant and very uncomfortable (High-Intensity Information), it is processed by an element of the organization’s Master System that distorts, covers up, ignores, and blocks this information. Interestingly, this isn’t the fault of company management, because, believe it or not, they don’t control the Master System, it controls them. The only solution is to dismantle the element of the System that processes this information in this way.
Many fixes proposed in this discussion have failed to work, according to our data. The assumption that company management controls the company is not supported by the data we have (or by the anecdotal evidence of those of us who have watched executives make private resolutions they were unable to stick to, who have watched new executives make the same mistakes as the previous ones, and who have watched large companies be unable to make the changes championed by senior management).
Most retailers have no real idea of what customer service they are providing. The same can be said for suppliers as well. What a company thinks or believes simply does not matter. What matters is what the customer thinks. Customer service can only be viewed through the eyes of the customer. Management wants to know how they are doing with customer service. Department managers create reports that are biased to their own case. What manager wants to rock the boat and have management come down on them for not providing the customer service? The end result is great customer service reports to management.
In too many situations, executives seem to not only feel they have the “pulse” of the organization but seem to be reluctant to really go out and see what is happening in their retail outlets. There are very few that shop their stores at odd hours, holidays or weekends when the shopping experience is very different that 10 AM on a Tuesday morning.
I have always wondered if asking consumers what they think of your store at your competitor’s location might give a better insight as to why consumers are not shopping or have changed where they shop rather then continuing to reinforce a perception.
Resources are a key to the situation–you need to have people and simple technology available to allow retailers to help customers/consumers get their answers and follow-ups. Many retailers have cut back to be more competitive and have moved to the “price is the value” side of the curve. When you move to the “benefits are the value” side of the curve (Nordstrom, Marsh, Bath and Body Works, etc.) you will see more resources and more loyalty (and margin)–and you will get your questions answered. I spent 20 minutes in a retailer store yesterday looking for duct tape. After searching for and finally finding an employee, she pointed it out to me. If I would have gone to an Ace Hardware, I would have had it in one minute.
George raises two very different points which both merit discussion.
First, there is a huge discrepancy between how retail companies view their performance and what shoppers really feel. Why is this? Isolated corporate execs are just part of the problem. Challenging retail techniques make evaluating “service” very difficult. When consumers are asked via phone, mail or internet to rate their experiences, they are much more generous. The frustrations of the moment at the shelf — facing out-of-stocks or standing in long lines — are somehow forgotten. After the fact, shoppers want to justify their choice of outlet and are much more supportive of the experience. What is needed is better, more immediate in-store shopper research. Getting shoppers at the point of purchase — or frustration.
Second, the questions of whether retailers should meet every shopper request. For most retailers, that is impossible. However, what retailers need to do is make shoppers think they are meeting every request. If the retailer did not view it prudent to stock George’s special request, they should have provided either a recommended alternate source of purchase (maybe online or mail?) or politely persuaded the shopper to try a substitutable product (with some free goods to ease the transition?). The biggest error here was not communicating the action and reasons behind it with the shopper.
The only statistic that matters is the customer’s evaluation of customer service. I think all of the reasons/excuses listed here have some degree of relevance in this apparent disparity. I wouldn’t even collect data on how the company feels it is doing. Instead, the key is to constantly assess from the customer’s perspective how you are doing, take action on shortcomings, and follow up to see if the customer is satisfied by your actions. Unlike today’s soggy Boston Marathon, delighting the customer is a race with no finish line.
Customer service is usually evaluated internally, if at all. The marketing department goes into the store and asks questions and observes. Companies are naive to believe that the staff doesn’t act differently than normal when someone visits from corporate. Customer service should be evaluated by outside firms that will push the envelope and truly get a pulse on what level of service your company is delivering.
Top executives are guilty of the “rah rah” speak-it-and-it-will-happen speech on customer service. But quite frankly, how many CEO’s say, “We are poor in customer service and things have to change”? In the executive suite, they either don’t know or they want to drink the Kool-Aid. Or maybe they’re afraid that investors and the board will find out!
Recently, I worked with a company that did a survey. The results were really bad. When I finally read the corporate internal release on the results, it was totally different. The company spin was that the company was the best in the industry and everyone loved to work there and everything was great. Certainly a waste of money to pay for a survey.
Also, the process of gathering information should also consider that generally people are nice and don’t want to say bad things about other people or companies. So questions should be developed that get to the heart of a problem.
Retail executives often admit privately that their customer service = self service = no service. But it’s hard to say that publicly. Some retailers claim their service is “competitive,” which is a codeword meaning “same as everyone else who’s mediocre = self service = no service.” Very few companies use mystery shops and other objective measures to improve service. Furthermore, as Michael Richmond’s duct tape example shows, service costs money and some people are willing to pay the price. But not all. The worst part of the “our customer service” bluster: your employees’ reaction. They will decide whether the boss is a hypocrite or worse. Because employees know whether the service commitment is merely a slogan or if it’s real.
There’s a reason why it was the Emperor, the top guy, who had no clothes though he thought he was finely dressed. It wasn’t someone in mid-management and it sure wasn’t one of the servants.
People in ‘power’ pretty well always have rose colored glasses about the performance of the organization they run. They do that for psychological preservation. In my own organizational research we could consistently count on a statistically significant difference between the ratings of senior executives and the rank and file employees. In short, the lower into the organization you go the lower the scores. If senior executives gave the business a ranking of 80, mid-managers would be at 50, employees at 30 and–like this article reports–customers at 10.
The reason? Control. The more in ‘control’ one is the more denial of unpleasant reality. The mistake is to think this is a customer service issue because it’s not. It’s a management or organizational issue. The central principle is “How we are managed is how we will serve.” Change how people are managed and you’ll change how customers are served.
I’m reading an interesting book right now called “Stumbling on Happiness.” It focuses on the ever changing framework from which we view happiness…which one could associate with satisfaction.
Customer satisfaction evolves. Most companies are relying on outdated information. Also, this book discusses the concept of large numbers…meaning that information garnered from small samples are highly variable and can be influenced by a myriad of factors. Larger samples will be more reliable. Nothing we don’t know…but most companies work off of the opinions of a very small sampling of people. And, as many have already said, there are of course many companies that really don’t give much credence to what shoppers want at all. So at the end of the day, I would conclude that most companies are either ill prepared to address customer satisfaction from a resource (human and economic) standpoint or have made the short term decision that it is too costly and not worth the ongoing investment of time and money. “Let the other guy do it and then follow by imitation” seems to be the prevailing philosophy.
Some equate the concept of “superior customer experience” with superior customer service/the functional aspects of customer satisfaction. This is where part of the disconnect is, for sure.
My rating of the experience at an Apple Store, Best Buy, or Trader Joe’s has very little to do with the lines, tidiness of the shelves, etc. and probably can range from 50-100. Even a bad day at an Apple Store is good! On the other hand, my satisfaction at a Burger King can only range from 0-65, because all there is, is the Whopper! There is no value creation for me from the shopping experience…only functional product delivery. If the Whopper is hot and fresh, you get a 65 (if you have the right measurement instrument that is!)
So, putting this together, why is there a disconnect between customer experience and perceived experience from corporate? Some possible reasons:
1) Measuring satisfaction metrics alone and thinking that is all there is to experience;
2) Not measuring anything at all consistently;
3) Measuring things based on recall, rather than transactional research (e.g. a number to call is put right on the receipt); the recall of specific triggers for the emotional part of annoyance can dissipate quickly….
4) I like the comment from some others about execs not being in the store–maybe 3 days each quarter of store duty would help that.
George Anderson’s article about “clueless companies” is reality for so many reasons. The only mistake that is worse than not asking for customer opinions is when companies ask, and then don’t listen, or at the very least, fail to respond with a thoughtful reply. Finally, I would suggest to all companies not to post surveys online, nor inside the store, if your company truly does not have an infrastructure in place to review customer comments with decision making management, and then to reply, and finally to consider actions and changes, if appropriate. Granted, not all suggestions nor criticism merit change, but all comments should be reviewed and answered in a meaningful and sincere way.
The disconnect between corporate and customer is due to the corporations love-in with their own company and unwillingness to consider that they are not the best option out there.
It is far easier to say “we’re a large company and it is difficult to weed out the staff that provide poor service” than it is to critically look at the corporate culture and determine if the actions and direction from senior management foster a customer-oriented outlook.
How many executives actually get out and use their store’s services at peak times as opposed to Friday afternoon on the way home? How many stroll the aisles and try to get assistance on products that they don’t know anything about? Most stick with their own categories and comfort zones–this is what prevents them from truly understanding their customer’s experiences. It would be better to have the staff from human resources, IT or accounting comment on the store experience than it would be for the marketers and merchandisers. They are the ones that need to hear unbiased opinions.
I think the biggest problem in providing “good service” is justifying the business case for making the changes that are needed to actually provide that “good service.” There’s no clear tie between customer satisfaction and sales. Sure, people instinctively can see that if customer satisfaction is high, then sales should be doing well, but when it’s the piece by piece and day by day projects that are on the table, the ones that “improve customer satisfaction”–especially when you’re talking about incremental improvements–are going to get pushed aside for the ones that deliver “real” ROI.
Virtually all retailers pay “lip service” to customer service but the true measure is in what they do as opposed to what they say they do. Same with customers…you can ask them who delivers and what they expect but the true measure is in where they buy. Surveys are questionable tools in retailing and the best retail executives are on the floor leading and directing to insure that what is promised is what is delivered.
Part of this is a consistent problem for companies regardless of the area–they always over rate their own performance. By definition, half of all retailers (or other companies) will be in the bottom 50% of the performance curve for any area of business, from customer satisfaction to supply chain performance, but nowhere near 50% will ever say they are in the bottom half.
This is a problem. There is a bell curve for everything, and companies should make an effort to find where they really stand.
That said, I am always a little suspicious of this kind of data. My first question would be: were companies rating themselves against the competition and consumers based on their ideal expectations? Big difference in the frame of reference.
Then, as always, it’s a matter of cost. I don’t think too many people consider Wal-Mart a “superior experience”–until they see the extra money in their wallets. The key is understanding if you are trying to compete based on “customer experience”–or something else.
Disparity between how companies view the customer experience versus consumers’ opinion on the same subject primarily stems from the company executives having no ability to see from consumers’ view point. This mostly comes from the fact that they hardly shop the stores where they work.
I bet Bob Nardelli never shopped in Home Depot, otherwise the customer service there would not have gone down to the level it did. And if they do, most likely, the staff at the store where they shop know the identity of these executives so they receive better service than a typical customer would. This can be remedied quickly by making it mandatory for every manager/executive above certain level to work in a store for a week every year between Thanksgiving and Christmas. This was the norm where I worked. When these individuals came back to their respective jobs from their one week in the store, they had a completely different perspective!
While it may not be necessary to meet every shopper’s need or request, at least it is civil and responsible to let the requesting customer know why you cannot honor that request so the customer knows what to do next.
Customer service is common sense, but as some one has said, common sense is not common. If it were, we consultants would have no business!
Service in America is an intriguing topic. It gets me both excited and frustrated! Why? Because no matter what sector you challenge, one can find examples of disconnect between business and consumers when it comes to superior service. Why is that? It is logical to believe that companies who are well run and who seek to please the ever elusive consumer would be smart enough to provide the basic satisfaction that the consumer demands.
The answer is simple really. I believe that all consumers have an “Unarticulated Need” that we expect to be met. This “Unarticulated Need” is our desire to be satisfied without verbally expressing the need. We expect this especially when paying our hard earned money in exchange for goods or services. An example: when I show up at a restaurant, I expect the food to be clean, hot, with adequate portions and friendly service. I don’t regularly make that announcement but I expect it to be so. Don’t you? Recently I went to a national establishment where I dine quite a lot. I told the “manager” (before I paid) that I expected the food to be hot or I did not want it. I even presented my VIP card to show that I am a frequent customer. I felt the need in this case to “Articulate” my desire and not just leave it to chance. Even with all that, you guessed it, I was served food that not only was not hot but was probably yesterday’s leftovers. This “manager” clearly jeopardized a VIP customer who often brings business customers to the establishment. Why? Was it because there was pressure to get rid of yesterday’s product and not have it count as waste?
While this is but one isolated example, it speaks volumes about the corporate office’s inability to translate to the point of customer contact. The message is simple: “If we take care of our customers they will take care of us.” Ironically, this is especially true if the customer already displays a precondition to patronize the store.
Let’s get this straight. The customer is certainly not always right. However, finding more ways to make customers less wrong will serve business well. While there are many eloquent arguments that can be made for complex solutions delivered by expert presenters, I offer this: executives must spend more time teaching, coaching, setting the example and rewarding workers who fulfill the customer’s “Unarticulated Needs.” This is true no matter what the industry. After all, Costco and Nordstrom both have a reputation for getting this done don’t they?
Sometimes, when faced with customer insights that conflict with corporate initiatives or direction, it can be easy to explain the insight away by thinking that “customers don’t know what they really want.” Ignoring the cold, hard truth that customers insights offer inhibits growth, at the very least.
First, executives live in rare air. I worked for a Fortune 50 CPG Company whose CEO admitted that he had never cleaned a bathroom or cooked a meal. Was he truly qualified to make decisions about HH products? (I know that’s blasphemous.)
Second: What was the gender composition of the survey among executives? Among consumers? Many execs–even a critical mass of them–are men. The male shopper’s mindset is completely different from women’s, who still comprise the majority of shoppers.
Finally, retail executives are financially rewarded when they co-sign each other’s happy story.
Customers vote with their feet and pocketbooks. Period. Either they get the service they desire and return or they do not. I find the number of 80% of companies saying they give great customer service unreliable, as there appeared to be no definition of what that meant.
Executives love to put the blame for lower sales on everyone but themselves. It’s not the product mix, endless sales, fewer clerks, rotten service–it’s Wal-Mart up the street, the economy, weather, anything but their fault.
I received the “legendary” service of Nordstrom once in twenty-five years of shopping. I still go there with lower expectations, but notice the great disconnect from all the articles and books.
It is about choices. Companies very often choose to take the easy way out. They spout, from the executive office, that the customer is number one. Unfortunately, creating a customer service culture costs money. When money is tight, the first thing to suffer is the money spent on improving customer service.
Customer service is whatever the customer perceives it to be. The best customer service companies listen to their customers. They use IVR (Interactive Voice Recognition) surveys or they use web surveys or customer intercepts. The companies then retrain their employees/associates and then measure if that retraining has been successful. They use a third party mystery shopping company to provide objective feedback.
Sending in corporate employees to a retail location to perform an evaluation has no value. The store associates will be on their best behavior. A well planned, well focused mystery shopping program will give the measurement and feedback needed to assist in the modification of behaviors.
Once behaviors are found to be modified, then once again asking customers for feedback is important.
But if customer service is only lip-service, then there is a tremendous disconnect. One must talk-the-talk, but more importantly, they must walk-the-walk. Improving customer service and listening to the customer will generate more sales and profits.
The responses back to the issue of Clueless Companies are all very well positioned. In the last twenty years or so living both as a retailer and as a retail consultant looking back in, I find it amazing that these same realizations hold true.
Executives tend to spend way too much time off of the sales floor and in their offices surrounded by well meaning but gutless individuals who know that any negative commentary only gets them a ticket to early retirement. Then when the executive eventually gets to a store for a visit, everyone is the store has been informed ad nausium, and the store op’s people scurry around to paint a “rosy colored view.”
Retail all starts with “embracing the culture of customer centricity” and rewarding and incentivizing this behavior. Everyone talks a good game but few companies actually know much about their customers. Issues like customer profitability, likes, dislikes, incentives, behaviors, and other attitudinal data tied to specific SKUs or transaction histories tend to get pushed into IT or Marketing for analysis. There, either Marketing or IT now has to work to get the attention of their executives to operationalize a strategy that results in either higher comp sales or lower SG&A.
All this hard work tends to go out the window when the store has several negative flash sales reports and the new strategies quickly become abandoned.
If you want to improve customer service, you first need to define realistic metrics from the customer point of view, not the other way around. Metrics take time and in the age of “I want it now,” few executives are willing to take the career risks of initiating significant change to positively effect the outcomes.
With regard to the poll, I wish there were a choice that allows a combination. Very often poor customer service is because Research into consumer wants and needs doesn’t take place–top execs assume they know the answers; Consumers are asked the wrong questions and Consumers provide answers but companies don’t respond. I would also add the top management doesn’t empower employees and associates to address customer concerns.
I’ll give a perfect example of companies not responding. As we all know, and as has been documented by many market research companies, the way a retailer handles returns has a large impact upon a customer’s perception of customer service. Yet very few companies want to spend the extra dollars necessary to evaluate the way returns are handled in their stores.
My company ICC Decision Services provides customer feedback and mystery shopping programs to many of the nation’s largest retailers. We have found that the best retailers spend the money the listen to their customers, modify the behaviors of their associates, measure that the modification is taking place and realize that this is an ongoing process. These retailers see an increase in customer satisfaction and also see their revenues and profits increase.
Customer service is based on expectation. When a customer goes to Wal-Mart they know the only person going to greet them is the guy at the door. No one is going to help them find what they are looking for and the cashier is going to treat them like gum on the bottom of their shoe. Customers are “okay’ with this because the price is cheap or it is the only place they can think of to get a certain item. The expectation is set and set low.
Same customer goes to Sears, they expect that they will be greeted by everyone, have employees at every corner waiting to serve them, and an abundance of happy, smiling cashiers so they won’t have to wait in line. They also expect all of this “service” not to cost anymore than Wal-Mart prices. Customers want it both ways.
Service has a price. Neither management or the customer wants to pay it. So you do the best you can to keep up the positive attitude of minimum wage part-time employees so they will take care of your customers. Hiring and retaining a seasoned staff is just too expensive just ask Circuit City.
It can be done. But it is a hard sell to the average p-t associate who has not either received the benefit of customer service training and its value to their advancement/earning ability (shame on us) or developed a work ethic (shame on them and us)
1) A daily coaching session with the work force can be the simplest way to achieve it (along with a follow up with second and third shifts)
2) Mentoring the crew is a fine way as well… If you going out of the way to provide service, you stand a much better chance of asking your associates to do so.
3) Driving home the point. I had a great deal of success pointing out to my associates that THEY are face of the company to the costumers. THEY meet and greet the customers, THEY assist in the sales. THEY conclude the visit by ringing up the purchase. The sales associates will make the biggest difference in a customer’s shopping experience.