July 31, 2007
In Search of Customer Service
Retailers know they need to improve customer service levels. Now they’re trying to figure out just what good customer service is and how to deliver it.
In an era where retailers are selling the same exact goods or, at least, very similar ones, customer service is one of the few ways to differentiate and still make money.
Claes Fornell, director of the University of Michigan’s National Quality Research Center, told Maria Halkias of The Dallas Morning News, “Companies don’t have much pricing power unless there is shrinking supply or higher customer satisfaction. Companies may begin to see narrowing profit margins unless there is further improvement in customer satisfaction.”
The National Retail Federation has sought to improve the level of customer service throughout the industry with its NRF University website and training centers around the country that offer certificates for those passing competency courses.
Kathy Mannes, managing director of workforce development at NRF, said, “This industry traditionally churned our employees… We haven’t been thinking enough about the skills needed for retail, and that’s obvious when customers walk out the door.”
Keeping consumers coming back to stores to shop is the ultimate goal of providing customer service but what does it take to make shoppers happy?
The truth is that the answer is determined by what shoppers want out of their trips to a particular retailer’s store or website. The same is true of orders placed through a call center.
“It’s all about expectations,” J.C. Penney chairman and chief executive Mike Ullman said. “Southwest Airlines has never been considered a full-service airline, but it has a high delivery on its promise. It has high customer satisfaction because it fulfills its promise.”
Mr. Ullman said his company is looking to improve the customer experience every day but stuff happens. “If the register doesn’t work, it doesn’t matter how friendly the person is. If the price isn’t right, the restroom isn’t clean and the dressing room isn’t tidy, those are all disqualifiers,” he said.
“The customer isn’t this monolithic thing,” said Jorge Leis, a partner in the Dallas office of Bain & Co. “Customers differ. Stores differ, and it varies even inside the same box,” Mr. Leis said. “Some departments need better-trained employees than others. So the expectations are even different inside the same store.”
Al Myers, senior vice president at TNS Retail Forward, said retailers will need to rely more on technology to provide the types and levels of service that customers want but are not necessarily willing to pay for.
“We’re not saying that the trusted salesperson will be replaced at a Saks, Neiman’s or a Nordstrom, but in most of retail, providing service with people is going to make it harder for them to compete.
“It won’t be long before we are scanning entire grocery carts and paying for its contents with a thumbprint,” he said. “Mirrors will send images to friends from dressing rooms to replace that salesperson with a vested interest in telling you it looks good.”
Mr. Myers offers a caution, however, that those retailers that are failing at customer service will likely find adding technology does little to improve their standing with shoppers.
“The same companies that provide bad customer service will provide bad technology and vice versa,” he said.
Discussion Questions: As you see it, what are the big customer service issues of the day? What does it take to provide good customer service? What new promising solutions is technology providing?
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Every retailer can measure customer service objectively on a periodic basis. Retailers use mystery shopper scores, sales capture percentages (transactions versus traffic counter data), cashier line cycle times, customer satisfaction surveys and focus groups, suggestion/feedback cards, etc. Different stores might use different measures, since some stores are largely self-service (convenience stores, supermarkets, mass merchants, The Gap) and others are meant to be high-service (tablecloth restaurants, Tiffany’s, H&R Block, Talbot’s). For most retailers, lower staff turnover drives higher customer satisfaction. Generally, people who know their job do it more skillfully. And since many retailers have staff turnover from 50% to 150% annually, that’s a major driving force.
Most Americans agree that “customer service” is lacking in the U.S. Why is that exactly? One might think that in the most productive economy in the world, merchants of every sort would be zealous about treating consumers with great care and respect. After all, these are the richest and most well off consumers in the world. While many theories are offered as to why we in most cases do not, complacency might just be the most probable cause.
I offer that this complacency is not committed in a flagrant manner. It has just become part of the fabric from which we operate. It’s sadly become “SOP” or standard operating procedure (albeit unknowingly). I suppose this is due to the amount of excess we have in our country. While everyone strives to get rich, we often overlook the fact that compared to most others on Planet Earth, many in America are indeed already rich. We have more of everything. We have many things we want and virtually everything available to us that we need. Not that this should be apologized for either…most Americans work very hard for what we have.
However, as it relates to outstanding service, perhaps we have so much that we don’t actually appreciate it when a consumer graces us with their presence and their hard earned money. Perhaps we sometimes treat that consumer as just another job or just another order as it were. Would it not be nice for more retailers to take the stand that every transaction is important and is to be valued? I don’t mean making a speech about the importance of every customer, I mean putting those words into real action! How great could service be if we honestly treated consumers with respect and provided experiences that truly exceed expectations? The argument can be made that doing so has value beyond what can easily be found on a line of the latest P&L.
I say the answer is yes, we can accomplish this. An illustration:
In my history, I was a senior executive at a rather large retail concern. I used to debate with my peers that I would earn a much greater living by taking a demotion from my officer position and becoming a district store manager. My rationale was simple; by exceeding all consumers’ expectations related to in-stock and service, I could garner loyalty from those consumers that would translate into increased financial productivity for the district. I believe that great service is so important that many consumers would gladly accept a great experience even at a slight higher price. Consider that theory as you have your next BAD service experience.
Something to think about….
Expectations for levels and types of customer service in retail are clearly situational but in all cases expected by the consumer.
All consumers have the expectation that they should receive the service they need to purchase products and services from a retailer. The nature of the service delivery can vary from situation to situation and should include web sites, self-service information kiosks, in-store merchandising and properly trained and motivated associates.
It is really not a question anymore if retailers should employ these types of customer service tools but more a question of how and where.
Interactive multi-media self-service tools are quickly becoming a standard in service delivery, providing information and services directly to the consumer and a strategic platform for educating associates.
Too big a topic with too much complexity to deliver comprehensive suggestions. Race’s comment is most telling, I think. If, and I agree, educated observers and analysts have been hearing and making this list of recommendations for several decades, and the concepts are not overwhelmingly complex…what’s the real problem? Perhaps the answer is in the range of responses we’ve provided. Given this list of inherently appropriate and well thought through recommendations, which to focus on? Where to start?
And that may be the answer in and of itself. Perhaps these are the wrong questions. Where to start and which to focus on precludes approaching this as if customer service was an holistic system. In holistic systems, no single element can be viewed without understanding its system context. My viewpoint is that customer service is indeed a complex system of interrelated processes, technologies and people. “Fixing” or changing one aspect of that system puts incredible pressure on related aspects, causing unanticipated breakdowns or previously obscured inefficiencies to flare up.
The first task in addressing this problem (assuming the executive will exists to undergo a profound alteration) is to painstakingly map out the system which defines customer service for you. Identify all of its inputs, outputs, interrelationships, dependencies, skill requirements, contradictions, and all other elements of a deep-dive system analysis. Second, step back and question if the system is designed to support, enhance and deliver on strategic competitive advantages and positionings, brand statements and consumer expectations. Third, develop a set of success metrics against which the new system can be evaluated. Fourth, build the “ideal” system within the context of your business, your brand, your economics and your market positioning. Fifth, determine which aspects of the existing system can be used, adapted or incorporated into the new one…and so on until a new holistic system of customer service has been defined, designed, built, and integrated into the larger complex of systems which are your company.
Various responses here state that customer service starts with the executive team. I would suggest that it starts with shareholders and flows downward.
Every shareholder expects…no, demands, a good return on their investment. Higher wage costs and increased operating costs place a tremendous strain on already slim profit margins. So, “unwise” retailers cut back on the number of staff on the floor to reduce their expenses and increase profit. However, as virtually everyone on this post knows, this ultimately results in lower sales due to poor service and/or missed sales opportunities.
There is no quick fix.
Smart retailers can improve their scheduling by tracking their hourly sales and utilizing technology. They can also combat declining sales by teaching their front-line how to effectively sell. Unfortunately, too many retailers see training as an expense rather than an investment, using high employee turnover as an excuse as to why they don’t provide customer service training.
Smart retailers get it. Case in point: When unexpected line-ups form at a local independently-owned grocery I frequent, management is quick to assist with bagging or to reallocate staff for a few minutes to prevent people from waiting too long. They get it!
However, I believe the issue of customer service will continue to be a hot topic of conversation…it always has been. The only thing that has changed is the intensity of the debate.
Customer service is whatever the customer perceives it to be.
As a company that helps retailers measure customer service, customer satisfaction and increase customer conversion rate; the first thing we tell clients is to listen to your customer and determine what are their expectations. The retailer must then decide which of their expectations they believe they can effectively meet.
Improving and then maintaining customer service levels means training, retraining and more training. Additionally, it means monitoring customer satisfaction (C-SAT) levels by use of customer surveys; it means monitoring and measuring employee satisfaction by use of employee surveys and it means measuring delivery of the service through the use of mystery shopping.
The biggest mistake that many retailers make is not offering enough training and retraining and then not conducting employee surveys. If the employees are not having a high level of satisfaction, how can they offer a high enough level of customer service to satisfy the consumer?
Customer service rubber meets the retail road at the lowest common denominator–the clerks in the aisles. These are folks with measurable responsibilities such as stocking, cleaning, building displays, etc.; and un-measurable responsibilities like helping customers. In their personal lists of job priorities, what do these clerks place at the top? Which would you place at the top? In spite of even the best customer service training and awareness, for clerks Job #1 remains taking care of the products, not the people.
Here are my measurements for great customer service:
1) knowing/calling me by name;
2) having a knowledgeable associate who graciously assists me;
3) not having to wait too long to check out or get the info I need;
4) having access to a manager if necessary;
5) the items I seek are in stock;
6) prompt accurate checkout;
7) an online feedback mechanism to use after the purchase.
Sounds easy–but I do not see this in a lot of retail outlets!
I have always found that one of the most important factors in delivering outstanding customer service is the attitude of the CEO. If he or she visits stores and interacts with customers and associates alike, it sends a clear message that customer service is a priority and interactions with customers make a difference in repeat sales.
Training is definitely lacking at many retailers, but customer service messages can be communicated regularly to associates in many ways. Store managers can conduct ten minute “stand up” huddles with staffers before a store opens for the day (or at other times) to focus on one or two key customer service topics. I observed one of these huddles at a local Bed, Bath and Beyond store I visited last week. And as I was walking around, I was greeted with a friendly hello by at least four associates and one of them went in the back to check on the location of an item that was out of stock. I have been repeatedly impressed by service at this store.
As for technology, I believe it can definitely assist with customer service, but it can’t replace a helpful employee who goes above and beyond to solve a customer’s problem or answer a question. I recently ordered two copies of the new Harry Potter book from Barnes and Noble on line. It never arrived on Saturday, July 21, as promised. I went to my local Barnes and Noble store, explained the situation and the store manager gave me two copies of the book because of our inconvenience with the assurance that I would return the two copies when I received them in the mail.
I then followed up with the online customer service representative at Barnes and Noble and spent fifteen minutes before anyone would even take my call. I spent over an hour on the phone, wrote their CEO a letter and was told I had made a mistake and there was nothing further they could do to make me a satisfied customer. As a result, I will no longer shop their online service, but I will frequent their local store–all because of the compassion of one store manager.
Training like that provided by the NRF is essential as most retail workers are just marking time. Retailers need to implement programs that provide a career and a roadmap for success to employees and this should all part of customer service training. I’m afraid that technology will only work if it is integrated with employee training programs or else there will be a whole bunch of disgruntled shoppers whose displeasure is caused by their interface with technology such as poorly conceived self check out counters. The other issue is convincing consumers that they should shop a retailer most often when they are required to basically provide their own customer service by interacting with a machine…in some formats this will work and in others it will fail…I don’t want to buy my next suit from a machine.
The customer leaves three things (pays) in the store:
1. Money;
2. Time;
3. Angst/frustration/confusion.
And they take two things away (rewards:)
1. Products;
2. Satisfaction/pleasure.
A single-minded focus on money and products, outcome variables at the checkout, virtually blinds management to the other issues: time, angst/satisfaction. Until the process is MEASURED and studied as assiduously as the outcome, retailers will continue to drive looking out the review mirror. That is, looking at what happened in their stores (checkout,) not the behavior that is driving it.
I believe the most successful retailers have senior management that spends time in their stores observing what their customers see. They see first hand what the shopping experience is. They talk to their employees and really listen to what they are saying. They encourage their employees to level with them and tell them the way it really is, not just what they want to hear. Too many retail executives spend the majority of their time in their offices, surrounded by “yes men,” and attending meetings where they plan things in a “perfect world.” Customer service issues are very apparent when observed in a store without advance notice and in a “mystery shopper” type visit. Most CEOs can visit their store without being recognized and learn everything important that they need to know. Why don’t more of them do it?
I firmly believe the biggest issue for customer service is respect, as well as merchandise that allows the customer to show their individuality. Mass customization, personal identity, and allowing me to show my inner self are all issues retailers will find become a greater demand in the years to come. This will be particularly true with the continued rationalization of retail stores, where too few options are available to the customer.
On the respect side, how often do you go shopping and you run into a sales person (let me change that, a person employed by the store, and walking the sales floor) and who could care less if you are there or not, and if you make a purchase or not? Too often. I really get bugged when I go to my local supermarket, and check out with a young girl or guy who has checked me out before, and I don’t even get an acknowledgment that I am there. Is that customer service?
If you need to pick one idea, try a simple “hello” and “how are you?” It varies by business–there are traditional in/out sites, i.e. food and drug where full stock and fast checkout are paramount; but most customers really want to be acknowledged in the store.
In this world of technology and demand for superior customer service, it may make sense to balance the non human part–technology–with the need for customer interaction. Issues like educating sales associates, then benchmarking, monitoring, and modifying the innovation program and its findings, need to have constant attention. These ongoing processes can build loyalty–if not brand loyalty–and therefore, gross profits based on organic growth.
Marketing the brand and supporting it with associate sales and other consumer communication contacts and education can lift shopper sales and repeat trips to the business outlets. No magic. But you need to ‘open the window’ for educating and getting sales associate respect. Then, nurture this innovative program, as you build the brand, through consumer marketing programs.
Again no magic. Just open your mind, be patient, and keep a constant commitment to this direction. Look at Nordstrom, Marriott, Ukrop’s, and Publix to name a few. Hmmmmmm, and a ‘Mad Marketing’ process and innovative program that can work for all.
In all my years of dealing with customer service training and policy issues, I find the biggest issue that causes bad customer service is ignorance. Sales associates just do not know what good customer service is and how to provide it.
There is a mad rush to get bodies trained and on the floor in the quickest way possible with the least amount of resources and that is doing the customer a disservice which, in the long run, will only hurt the business. Training and leadership are the keys to having top notch customer service. In retail, it is ‘monkey see, monkey do’ and when the managers and directors are trained to be sensitive to customer’s needs, that will create an environment where associates will also tend to customer’s needs.
Ongoing training is also critical to success. There are many ways to motivate individuals to become customer service professionals.
I firmly believe that Mr. Myers is wrong in his assumption that technology will replace people when it comes to customer service. People nowadays are complaining that there is no staff to help and replacing cashiers with self scan machines will only add insult to injury. Retailers need to accept the fact that customer service is what is going to increase sales and bring people back and they need to invest in training and retraining of their associates. If their customer service is not great, then they should seek outside help to determine what the problems are, and implement solutions to achieve their desired goals.
Many retailers are facing customer service issues, not because they don’t have staff but because the staff is not trained well. It’s okay not to know an answer, but one must go find out the answer. Many associates have not been educated about the impact of a lost sale. There seems to be a lot of “attitude”. A recent example of superior customer service that I experienced that retailers could take notice from is Holland Cruise Lines. Every person, from the cabin steward to the captain, knew who the customer was and knew they were there to serve.
There’s a lot of technology that could be deployed. For instance, a searchable database for inventory and back-stock. Order online from the store if the store is out-of-stock, to be picked up later. An accessorizing tool–I bought this–these are items that can complement that purchase and help find where are they located.
Technology and service are like wine and cheese. They go great together, but aren’t the same. Technology isn’t a substitute for service; it is a supplement or an amenity.
Service itself must become more sophisticated, because payment methods are morphing into digital self checkout (even by cell) in every channel. Therefore, the cashwrap staff will no longer be necessary for that function. Instead, savvy salespeople, product experts and atmospheric culture-bearers will prevail.
The biggest customer service issue for me is the respect for the customer. Respect for the customer can be expressed in various ways by:
a. Having enough sales associates available to help customers.
b. Having enough knowledgeable sales associates around. By knowledge I not only mean product knowledge but also the knowledge about merchandise status, i.e. when will new merchandise arrive, how long a given merchandise is on sale, when will there be next sale, etc.
c. By having enough cashiers open so the customer does not waste time checking out. Some times I spend more time waiting to pay than finding and picking up item(s) I want to buy.
And finally, keen awareness and appreciating the fact that I came to you rather than go to your competition to buy something.
Customer service focuses on promises and the customer experience from the moment they enter the store. Sam Walton recognized this when he put greeters at the front of the store. Others have copied this, but they now need to look at rest of the store. Go to any McDonald’s during lunch time and you will see what good (and bad) customer service is as hungry people have different expectations (from the company’s promises) and how McDonald’s either meets or fails in fulfilling these. This is the same for any very successful restaurant where people are either willing to wait for customer service or they go somewhere else. Retailers need to look at the restaurant service industry and learn what drives repeat business, how customers define good customer service and how they fail. Examining these failures is the first thing that any good retailer can do. Applying them to their company is the next. Looking at their competition and seeing how they address their customers, would be the third. Customer service is determined by the customer, based upon their perception of a company’s promise.
I think we’re missing a big point so far in this discussion and that’s the PAY rate for employees these days. Most retailers, due to low margins, simply can’t afford or refuse to offer a good wage. Therefore, they hire employees who really don’t care all that much. Couple that with the lack of training and there’s a bigger issue. You are either going to get a younger sales associate who has not been trained from birth how to respect individuals or older associates who look at the position as a dead end job. That’s what is really going on and it won’t change until more pay, better benefits, and training are offered to the employees.
The good news for retailers who feel technology will fulfill this void is that when the next generation gets older, they will relate more to computers than people, so customer service won’t be as big an issue.
The key to success for retailers is to clarify the customer service expectation. Do your stores run on a self-serve basis, one to one selling, or something in between? If you are a tweener, at what times during the week and what sections of the store can a shopper expect some personal services?
Most sections of the retail industry have managed to answer these basic question: hotels, restaurants, banking, insurance, personal care, health clubs. They all work on an scheduled appointment, or reservation, basis.
Why won’t appointments work on a broad scale in conventional retailing? The customers of most stores are online and walking around with cell phones in their ears. They are connected. Certainly appointment software is well vetted. Retailers for the most part have the necessary communications infrastructure. Major obstacles to making appoints could easily be resolved with a dispatcher function.
There are huge benefits on both sides. If a shopper makes an appointment with a knowledgeable store associate, there’ll be a straight forward discussion about needs the associate can professionally respond to. My guess is that conversion rates will soar as well as dollars per transaction. Stores will benefit by spreading out their labor resources. Perhaps the unreasonable shopping peaks during Christmas and on Saturday will flatten.
I’m always looking for one-to-one selling help. My first move is to catch the eye of a store associate. It is astounding, the limited peripheral vision of retailers. Most humans can see beyond 180 degrees. Yet when they take a retail job, their field of vision seems to suddenly diminish to a narrow sliver. It is because they’ve been asked to do an impossible job–provide service when the expectation is entirely in the eyes of the customer.
Brick and Mortar retailers can learn a lot from their online counterparts–or their own online stores–when it comes to providing a great customer experience. Customers want and expect information about products and services. A great online site will provide a comprehensive list of FAQs. A b&m retailer needs to figure out how to replicate this information source within the stores. Customers like being able to search an online site for the product that they want, find it immediately, and then purchase it and be on their way. In a retail store, a customer struggles to find the product that they want. They might ask numerous employees where a product is located, and each misdirection makes for a negative customer experience. Customers would like to be able to see their order history, and this should be available either in-store or online.
The technology exists today to take care of all of these issues, and make the shopping experience an easier, more pleasant endeavor. It is up to the retailers to put themselves in the consumer’s shoes, find the right solutions for today’s technologically advanced consumer, and continue to execute the new initiatives to create a point of difference.
All good comments above. Again, it’s situational, isn’t it? Good service from Hertz means no service: I don’t want to interact with a human at any point in the process of picking up or returning a car, and they provide that! On the other hand, I want full, knowledgeable service when shopping for a suit. So yes, it’s about fulfilling expectations, and I’m glad the importance of web sites was mentioned: they can do everything to shape expectations, and to drive traffic.
It is interesting that this topic comes up so frequently, in almost the same form: “What is wrong with customer service and how do you fix it?”
I believe we have proposed the same answers to this question many times–training is a common answer, as is looking at return on investment, cost of poor service, etc. In my 30 years in the business world, I have heard these answers literally hundreds of times.
Ninety-two percent of all business organizations in this country have a customer service rating of 70% or worse (data available on request). Why haven’t these answers made more of a difference? Because these answers, unfortunately, do not really address the root problem; if they did, customer service would be trending upward, instead of downward. The root problem is quite interesting, and obviously very little known.
Customer service means different things to different people and therein lies the first issue. Retailers need to decide what the profile is of their target customer and quit trying to be all things to all people. Just as mass media is dead so is mass retailing. The second issue is the expectations the customer brings with them when they enter the store. These two issues are what makes Southwest Airlines rank so high in customer service. They know the profile of the customer they’re going after and in turn this customer knows what they can expect and what not to expect.
Most retail executives say associates are their most important asset, but that is where it ends. Retailers hire just about anybody in an effort to get the work done. These people are rarely trained, not shown a growth path nor instilled with the idea that without customers there is no company or job. All management does is complain about the labor percent to sales being too high. Only a few companies motivate associates and in return have low turnover costs. It all starts with hiring the right people.
Customer service has always been the key differentiator. Unless a retailer offers one-of-a-kind products commodization of the shelves is the result.
So what pushes customer service to the next level? I believe it to be empowerment and respect. If executives want to lead their organizations effectively, then stop micro-managing people and hire staff that can be trusted to do the right thing. Then, let them do it. The happiest associates in any organization are those who feel they are making an individual contribution and doing all they can for their customers (internal and external).
There are examples of empowered retail staff across all industries. Unfortunately, in today’s fast-paced, nickel-and-dime retail world, it is the exception rather than the rule.
I agree wholeheartedly with the concept of using good workforce management and retaining good employees to drive higher customer satisfaction levels. Nothing makes me happier when I am shopping in physical stores than an employee who is helpful when I want them to be, and can tell when I do (and don’t) want assistance. The net result: I am more likely to come back and increase their sales.
Circuit City is a great example. I recently researched and ultimately purchased a flat-screen TV for my living room. CC employees were knowledgeable, and were able to instantly email me information they did not have at their fingertips. Net result: they got my business.
Technology can resolve customer service in a retail market, for exemple, reducing the waiting time on a cashier.
However, the attitude of the sales representative and the whole look of the store are the key variables to capturing the interest of a customer. Then, when the help to find a product is needed, the contact with a sales representative remains extremely important. The conversation with a representative, the impression a customer can have that he had been understood, a warm welcome in the entrance, are some variables that can influence positively his frequenting of the store. Of cause we can add other variables such as the way the store is organised, how clean it is, how the representatives are dressed, do they know their products?.. all these things can influence a customer to have a positive perception of that store and make him come back.
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Every retailer can measure customer service objectively on a periodic basis. Retailers use mystery shopper scores, sales capture percentages (transactions versus traffic counter data), cashier line cycle times, customer satisfaction surveys and focus groups, suggestion/feedback cards, etc. Different stores might use different measures, since some stores are largely self-service (convenience stores, supermarkets, mass merchants, The Gap) and others are meant to be high-service (tablecloth restaurants, Tiffany’s, H&R Block, Talbot’s). For most retailers, lower staff turnover drives higher customer satisfaction. Generally, people who know their job do it more skillfully. And since many retailers have staff turnover from 50% to 150% annually, that’s a major driving force.
Most Americans agree that “customer service” is lacking in the U.S. Why is that exactly? One might think that in the most productive economy in the world, merchants of every sort would be zealous about treating consumers with great care and respect. After all, these are the richest and most well off consumers in the world. While many theories are offered as to why we in most cases do not, complacency might just be the most probable cause.
I offer that this complacency is not committed in a flagrant manner. It has just become part of the fabric from which we operate. It’s sadly become “SOP” or standard operating procedure (albeit unknowingly). I suppose this is due to the amount of excess we have in our country. While everyone strives to get rich, we often overlook the fact that compared to most others on Planet Earth, many in America are indeed already rich. We have more of everything. We have many things we want and virtually everything available to us that we need. Not that this should be apologized for either…most Americans work very hard for what we have.
However, as it relates to outstanding service, perhaps we have so much that we don’t actually appreciate it when a consumer graces us with their presence and their hard earned money. Perhaps we sometimes treat that consumer as just another job or just another order as it were. Would it not be nice for more retailers to take the stand that every transaction is important and is to be valued? I don’t mean making a speech about the importance of every customer, I mean putting those words into real action! How great could service be if we honestly treated consumers with respect and provided experiences that truly exceed expectations? The argument can be made that doing so has value beyond what can easily be found on a line of the latest P&L.
I say the answer is yes, we can accomplish this. An illustration:
In my history, I was a senior executive at a rather large retail concern. I used to debate with my peers that I would earn a much greater living by taking a demotion from my officer position and becoming a district store manager. My rationale was simple; by exceeding all consumers’ expectations related to in-stock and service, I could garner loyalty from those consumers that would translate into increased financial productivity for the district. I believe that great service is so important that many consumers would gladly accept a great experience even at a slight higher price. Consider that theory as you have your next BAD service experience.
Something to think about….
Expectations for levels and types of customer service in retail are clearly situational but in all cases expected by the consumer.
All consumers have the expectation that they should receive the service they need to purchase products and services from a retailer. The nature of the service delivery can vary from situation to situation and should include web sites, self-service information kiosks, in-store merchandising and properly trained and motivated associates.
It is really not a question anymore if retailers should employ these types of customer service tools but more a question of how and where.
Interactive multi-media self-service tools are quickly becoming a standard in service delivery, providing information and services directly to the consumer and a strategic platform for educating associates.
Too big a topic with too much complexity to deliver comprehensive suggestions. Race’s comment is most telling, I think. If, and I agree, educated observers and analysts have been hearing and making this list of recommendations for several decades, and the concepts are not overwhelmingly complex…what’s the real problem? Perhaps the answer is in the range of responses we’ve provided. Given this list of inherently appropriate and well thought through recommendations, which to focus on? Where to start?
And that may be the answer in and of itself. Perhaps these are the wrong questions. Where to start and which to focus on precludes approaching this as if customer service was an holistic system. In holistic systems, no single element can be viewed without understanding its system context. My viewpoint is that customer service is indeed a complex system of interrelated processes, technologies and people. “Fixing” or changing one aspect of that system puts incredible pressure on related aspects, causing unanticipated breakdowns or previously obscured inefficiencies to flare up.
The first task in addressing this problem (assuming the executive will exists to undergo a profound alteration) is to painstakingly map out the system which defines customer service for you. Identify all of its inputs, outputs, interrelationships, dependencies, skill requirements, contradictions, and all other elements of a deep-dive system analysis. Second, step back and question if the system is designed to support, enhance and deliver on strategic competitive advantages and positionings, brand statements and consumer expectations. Third, develop a set of success metrics against which the new system can be evaluated. Fourth, build the “ideal” system within the context of your business, your brand, your economics and your market positioning. Fifth, determine which aspects of the existing system can be used, adapted or incorporated into the new one…and so on until a new holistic system of customer service has been defined, designed, built, and integrated into the larger complex of systems which are your company.
Various responses here state that customer service starts with the executive team. I would suggest that it starts with shareholders and flows downward.
Every shareholder expects…no, demands, a good return on their investment. Higher wage costs and increased operating costs place a tremendous strain on already slim profit margins. So, “unwise” retailers cut back on the number of staff on the floor to reduce their expenses and increase profit. However, as virtually everyone on this post knows, this ultimately results in lower sales due to poor service and/or missed sales opportunities.
There is no quick fix.
Smart retailers can improve their scheduling by tracking their hourly sales and utilizing technology. They can also combat declining sales by teaching their front-line how to effectively sell. Unfortunately, too many retailers see training as an expense rather than an investment, using high employee turnover as an excuse as to why they don’t provide customer service training.
Smart retailers get it. Case in point: When unexpected line-ups form at a local independently-owned grocery I frequent, management is quick to assist with bagging or to reallocate staff for a few minutes to prevent people from waiting too long. They get it!
However, I believe the issue of customer service will continue to be a hot topic of conversation…it always has been. The only thing that has changed is the intensity of the debate.
Customer service is whatever the customer perceives it to be.
As a company that helps retailers measure customer service, customer satisfaction and increase customer conversion rate; the first thing we tell clients is to listen to your customer and determine what are their expectations. The retailer must then decide which of their expectations they believe they can effectively meet.
Improving and then maintaining customer service levels means training, retraining and more training. Additionally, it means monitoring customer satisfaction (C-SAT) levels by use of customer surveys; it means monitoring and measuring employee satisfaction by use of employee surveys and it means measuring delivery of the service through the use of mystery shopping.
The biggest mistake that many retailers make is not offering enough training and retraining and then not conducting employee surveys. If the employees are not having a high level of satisfaction, how can they offer a high enough level of customer service to satisfy the consumer?
Customer service rubber meets the retail road at the lowest common denominator–the clerks in the aisles. These are folks with measurable responsibilities such as stocking, cleaning, building displays, etc.; and un-measurable responsibilities like helping customers. In their personal lists of job priorities, what do these clerks place at the top? Which would you place at the top? In spite of even the best customer service training and awareness, for clerks Job #1 remains taking care of the products, not the people.
Here are my measurements for great customer service:
1) knowing/calling me by name;
2) having a knowledgeable associate who graciously assists me;
3) not having to wait too long to check out or get the info I need;
4) having access to a manager if necessary;
5) the items I seek are in stock;
6) prompt accurate checkout;
7) an online feedback mechanism to use after the purchase.
Sounds easy–but I do not see this in a lot of retail outlets!
I have always found that one of the most important factors in delivering outstanding customer service is the attitude of the CEO. If he or she visits stores and interacts with customers and associates alike, it sends a clear message that customer service is a priority and interactions with customers make a difference in repeat sales.
Training is definitely lacking at many retailers, but customer service messages can be communicated regularly to associates in many ways. Store managers can conduct ten minute “stand up” huddles with staffers before a store opens for the day (or at other times) to focus on one or two key customer service topics. I observed one of these huddles at a local Bed, Bath and Beyond store I visited last week. And as I was walking around, I was greeted with a friendly hello by at least four associates and one of them went in the back to check on the location of an item that was out of stock. I have been repeatedly impressed by service at this store.
As for technology, I believe it can definitely assist with customer service, but it can’t replace a helpful employee who goes above and beyond to solve a customer’s problem or answer a question. I recently ordered two copies of the new Harry Potter book from Barnes and Noble on line. It never arrived on Saturday, July 21, as promised. I went to my local Barnes and Noble store, explained the situation and the store manager gave me two copies of the book because of our inconvenience with the assurance that I would return the two copies when I received them in the mail.
I then followed up with the online customer service representative at Barnes and Noble and spent fifteen minutes before anyone would even take my call. I spent over an hour on the phone, wrote their CEO a letter and was told I had made a mistake and there was nothing further they could do to make me a satisfied customer. As a result, I will no longer shop their online service, but I will frequent their local store–all because of the compassion of one store manager.
Training like that provided by the NRF is essential as most retail workers are just marking time. Retailers need to implement programs that provide a career and a roadmap for success to employees and this should all part of customer service training. I’m afraid that technology will only work if it is integrated with employee training programs or else there will be a whole bunch of disgruntled shoppers whose displeasure is caused by their interface with technology such as poorly conceived self check out counters. The other issue is convincing consumers that they should shop a retailer most often when they are required to basically provide their own customer service by interacting with a machine…in some formats this will work and in others it will fail…I don’t want to buy my next suit from a machine.
The customer leaves three things (pays) in the store:
1. Money;
2. Time;
3. Angst/frustration/confusion.
And they take two things away (rewards:)
1. Products;
2. Satisfaction/pleasure.
A single-minded focus on money and products, outcome variables at the checkout, virtually blinds management to the other issues: time, angst/satisfaction. Until the process is MEASURED and studied as assiduously as the outcome, retailers will continue to drive looking out the review mirror. That is, looking at what happened in their stores (checkout,) not the behavior that is driving it.
I believe the most successful retailers have senior management that spends time in their stores observing what their customers see. They see first hand what the shopping experience is. They talk to their employees and really listen to what they are saying. They encourage their employees to level with them and tell them the way it really is, not just what they want to hear. Too many retail executives spend the majority of their time in their offices, surrounded by “yes men,” and attending meetings where they plan things in a “perfect world.” Customer service issues are very apparent when observed in a store without advance notice and in a “mystery shopper” type visit. Most CEOs can visit their store without being recognized and learn everything important that they need to know. Why don’t more of them do it?
I firmly believe the biggest issue for customer service is respect, as well as merchandise that allows the customer to show their individuality. Mass customization, personal identity, and allowing me to show my inner self are all issues retailers will find become a greater demand in the years to come. This will be particularly true with the continued rationalization of retail stores, where too few options are available to the customer.
On the respect side, how often do you go shopping and you run into a sales person (let me change that, a person employed by the store, and walking the sales floor) and who could care less if you are there or not, and if you make a purchase or not? Too often. I really get bugged when I go to my local supermarket, and check out with a young girl or guy who has checked me out before, and I don’t even get an acknowledgment that I am there. Is that customer service?
If you need to pick one idea, try a simple “hello” and “how are you?” It varies by business–there are traditional in/out sites, i.e. food and drug where full stock and fast checkout are paramount; but most customers really want to be acknowledged in the store.
In this world of technology and demand for superior customer service, it may make sense to balance the non human part–technology–with the need for customer interaction. Issues like educating sales associates, then benchmarking, monitoring, and modifying the innovation program and its findings, need to have constant attention. These ongoing processes can build loyalty–if not brand loyalty–and therefore, gross profits based on organic growth.
Marketing the brand and supporting it with associate sales and other consumer communication contacts and education can lift shopper sales and repeat trips to the business outlets. No magic. But you need to ‘open the window’ for educating and getting sales associate respect. Then, nurture this innovative program, as you build the brand, through consumer marketing programs.
Again no magic. Just open your mind, be patient, and keep a constant commitment to this direction. Look at Nordstrom, Marriott, Ukrop’s, and Publix to name a few. Hmmmmmm, and a ‘Mad Marketing’ process and innovative program that can work for all.
In all my years of dealing with customer service training and policy issues, I find the biggest issue that causes bad customer service is ignorance. Sales associates just do not know what good customer service is and how to provide it.
There is a mad rush to get bodies trained and on the floor in the quickest way possible with the least amount of resources and that is doing the customer a disservice which, in the long run, will only hurt the business. Training and leadership are the keys to having top notch customer service. In retail, it is ‘monkey see, monkey do’ and when the managers and directors are trained to be sensitive to customer’s needs, that will create an environment where associates will also tend to customer’s needs.
Ongoing training is also critical to success. There are many ways to motivate individuals to become customer service professionals.
I firmly believe that Mr. Myers is wrong in his assumption that technology will replace people when it comes to customer service. People nowadays are complaining that there is no staff to help and replacing cashiers with self scan machines will only add insult to injury. Retailers need to accept the fact that customer service is what is going to increase sales and bring people back and they need to invest in training and retraining of their associates. If their customer service is not great, then they should seek outside help to determine what the problems are, and implement solutions to achieve their desired goals.
Many retailers are facing customer service issues, not because they don’t have staff but because the staff is not trained well. It’s okay not to know an answer, but one must go find out the answer. Many associates have not been educated about the impact of a lost sale. There seems to be a lot of “attitude”. A recent example of superior customer service that I experienced that retailers could take notice from is Holland Cruise Lines. Every person, from the cabin steward to the captain, knew who the customer was and knew they were there to serve.
There’s a lot of technology that could be deployed. For instance, a searchable database for inventory and back-stock. Order online from the store if the store is out-of-stock, to be picked up later. An accessorizing tool–I bought this–these are items that can complement that purchase and help find where are they located.
Technology and service are like wine and cheese. They go great together, but aren’t the same. Technology isn’t a substitute for service; it is a supplement or an amenity.
Service itself must become more sophisticated, because payment methods are morphing into digital self checkout (even by cell) in every channel. Therefore, the cashwrap staff will no longer be necessary for that function. Instead, savvy salespeople, product experts and atmospheric culture-bearers will prevail.
The biggest customer service issue for me is the respect for the customer. Respect for the customer can be expressed in various ways by:
a. Having enough sales associates available to help customers.
b. Having enough knowledgeable sales associates around. By knowledge I not only mean product knowledge but also the knowledge about merchandise status, i.e. when will new merchandise arrive, how long a given merchandise is on sale, when will there be next sale, etc.
c. By having enough cashiers open so the customer does not waste time checking out. Some times I spend more time waiting to pay than finding and picking up item(s) I want to buy.
And finally, keen awareness and appreciating the fact that I came to you rather than go to your competition to buy something.
Customer service focuses on promises and the customer experience from the moment they enter the store. Sam Walton recognized this when he put greeters at the front of the store. Others have copied this, but they now need to look at rest of the store. Go to any McDonald’s during lunch time and you will see what good (and bad) customer service is as hungry people have different expectations (from the company’s promises) and how McDonald’s either meets or fails in fulfilling these. This is the same for any very successful restaurant where people are either willing to wait for customer service or they go somewhere else. Retailers need to look at the restaurant service industry and learn what drives repeat business, how customers define good customer service and how they fail. Examining these failures is the first thing that any good retailer can do. Applying them to their company is the next. Looking at their competition and seeing how they address their customers, would be the third. Customer service is determined by the customer, based upon their perception of a company’s promise.
I think we’re missing a big point so far in this discussion and that’s the PAY rate for employees these days. Most retailers, due to low margins, simply can’t afford or refuse to offer a good wage. Therefore, they hire employees who really don’t care all that much. Couple that with the lack of training and there’s a bigger issue. You are either going to get a younger sales associate who has not been trained from birth how to respect individuals or older associates who look at the position as a dead end job. That’s what is really going on and it won’t change until more pay, better benefits, and training are offered to the employees.
The good news for retailers who feel technology will fulfill this void is that when the next generation gets older, they will relate more to computers than people, so customer service won’t be as big an issue.
The key to success for retailers is to clarify the customer service expectation. Do your stores run on a self-serve basis, one to one selling, or something in between? If you are a tweener, at what times during the week and what sections of the store can a shopper expect some personal services?
Most sections of the retail industry have managed to answer these basic question: hotels, restaurants, banking, insurance, personal care, health clubs. They all work on an scheduled appointment, or reservation, basis.
Why won’t appointments work on a broad scale in conventional retailing? The customers of most stores are online and walking around with cell phones in their ears. They are connected. Certainly appointment software is well vetted. Retailers for the most part have the necessary communications infrastructure. Major obstacles to making appoints could easily be resolved with a dispatcher function.
There are huge benefits on both sides. If a shopper makes an appointment with a knowledgeable store associate, there’ll be a straight forward discussion about needs the associate can professionally respond to. My guess is that conversion rates will soar as well as dollars per transaction. Stores will benefit by spreading out their labor resources. Perhaps the unreasonable shopping peaks during Christmas and on Saturday will flatten.
I’m always looking for one-to-one selling help. My first move is to catch the eye of a store associate. It is astounding, the limited peripheral vision of retailers. Most humans can see beyond 180 degrees. Yet when they take a retail job, their field of vision seems to suddenly diminish to a narrow sliver. It is because they’ve been asked to do an impossible job–provide service when the expectation is entirely in the eyes of the customer.
Brick and Mortar retailers can learn a lot from their online counterparts–or their own online stores–when it comes to providing a great customer experience. Customers want and expect information about products and services. A great online site will provide a comprehensive list of FAQs. A b&m retailer needs to figure out how to replicate this information source within the stores. Customers like being able to search an online site for the product that they want, find it immediately, and then purchase it and be on their way. In a retail store, a customer struggles to find the product that they want. They might ask numerous employees where a product is located, and each misdirection makes for a negative customer experience. Customers would like to be able to see their order history, and this should be available either in-store or online.
The technology exists today to take care of all of these issues, and make the shopping experience an easier, more pleasant endeavor. It is up to the retailers to put themselves in the consumer’s shoes, find the right solutions for today’s technologically advanced consumer, and continue to execute the new initiatives to create a point of difference.
All good comments above. Again, it’s situational, isn’t it? Good service from Hertz means no service: I don’t want to interact with a human at any point in the process of picking up or returning a car, and they provide that! On the other hand, I want full, knowledgeable service when shopping for a suit. So yes, it’s about fulfilling expectations, and I’m glad the importance of web sites was mentioned: they can do everything to shape expectations, and to drive traffic.
It is interesting that this topic comes up so frequently, in almost the same form: “What is wrong with customer service and how do you fix it?”
I believe we have proposed the same answers to this question many times–training is a common answer, as is looking at return on investment, cost of poor service, etc. In my 30 years in the business world, I have heard these answers literally hundreds of times.
Ninety-two percent of all business organizations in this country have a customer service rating of 70% or worse (data available on request). Why haven’t these answers made more of a difference? Because these answers, unfortunately, do not really address the root problem; if they did, customer service would be trending upward, instead of downward. The root problem is quite interesting, and obviously very little known.
Customer service means different things to different people and therein lies the first issue. Retailers need to decide what the profile is of their target customer and quit trying to be all things to all people. Just as mass media is dead so is mass retailing. The second issue is the expectations the customer brings with them when they enter the store. These two issues are what makes Southwest Airlines rank so high in customer service. They know the profile of the customer they’re going after and in turn this customer knows what they can expect and what not to expect.
Most retail executives say associates are their most important asset, but that is where it ends. Retailers hire just about anybody in an effort to get the work done. These people are rarely trained, not shown a growth path nor instilled with the idea that without customers there is no company or job. All management does is complain about the labor percent to sales being too high. Only a few companies motivate associates and in return have low turnover costs. It all starts with hiring the right people.
Customer service has always been the key differentiator. Unless a retailer offers one-of-a-kind products commodization of the shelves is the result.
So what pushes customer service to the next level? I believe it to be empowerment and respect. If executives want to lead their organizations effectively, then stop micro-managing people and hire staff that can be trusted to do the right thing. Then, let them do it. The happiest associates in any organization are those who feel they are making an individual contribution and doing all they can for their customers (internal and external).
There are examples of empowered retail staff across all industries. Unfortunately, in today’s fast-paced, nickel-and-dime retail world, it is the exception rather than the rule.
I agree wholeheartedly with the concept of using good workforce management and retaining good employees to drive higher customer satisfaction levels. Nothing makes me happier when I am shopping in physical stores than an employee who is helpful when I want them to be, and can tell when I do (and don’t) want assistance. The net result: I am more likely to come back and increase their sales.
Circuit City is a great example. I recently researched and ultimately purchased a flat-screen TV for my living room. CC employees were knowledgeable, and were able to instantly email me information they did not have at their fingertips. Net result: they got my business.
Technology can resolve customer service in a retail market, for exemple, reducing the waiting time on a cashier.
However, the attitude of the sales representative and the whole look of the store are the key variables to capturing the interest of a customer. Then, when the help to find a product is needed, the contact with a sales representative remains extremely important. The conversation with a representative, the impression a customer can have that he had been understood, a warm welcome in the entrance, are some variables that can influence positively his frequenting of the store. Of cause we can add other variables such as the way the store is organised, how clean it is, how the representatives are dressed, do they know their products?.. all these things can influence a customer to have a positive perception of that store and make him come back.