A Path to Pumped-Up Sales

I don’t actually care much for the term “customer service.” The reason is that when most people think of customer service, they only picture the face-to-face or phone-to-phone interaction with the customer (serving the customer). While that of course is a big piece of the service puzzle, it is by no means the only part – or even the majority – of what service encompasses. In reality, every single interaction anyone has with your business is part of the big service picture.

Whenever I ask a group of customer-facing employees why they think it is important to strive to provide good service, we typically hear what you might expect: “to keep the customers coming back,” “so customers will refer their friends,” “if it weren’t for the customer, we wouldn’t have a job,” are some of the responses we often receive. And of course these are all true and all great points. When we then ask the same employees to define good service though, we rarely hear about anything beyond the employee’s personal interaction with the customer.

As a retail business owner or manager, the concern you should have with this is that it isn’t enough to build your business to the level you desire. In today’s highly competitive retail environment, that focus simply will not be enough to differentiate your company from the competition. If you want to truly get the most out of your retail business and get all of your employees working with you toward your ultimate goal of maximizing your business’ potential, I suggest teaching the concept of service paths.

Service Paths
What is a service path? Simply put, a service path is the journey any given customer takes to purchase a product or service. A service path begins when the potential customer first learns of your business and ends with a decision to purchase or not purchase what you have to offer. Every interaction between your business and your potential customer is a milestone on the service path.

The ways a service path can be initiated are nearly infinite. A shopper might see your ad in the phonebook, drive by your store, get a referral from a friend or receive a flyer in the mail or on their door. If you advertise in the newspaper, the first time they see your ad is the start of their service path. From that point, the path might continue with a call or a visit to your store, and so on.

Opportunity Points
We call the milestones customers come upon along the service path opportunity points. Each encounter with your business or experience relating to your business, whether it involves a person from the company or not, helps to build an impression in the customer’s mind. When that encounter is positive, chalk one up for you! When the encounter is negative, it’s a nudge toward the customer choosing another option. Because there are so many opportunity points on every service path, the key to successfully managing your service paths is attention to detail – every detail.

Many years ago the airline industry commissioned a study to measure customers’ subconscious perceptions of several conscious events. One fascinating example that came out of the study was that when a passenger folds down the tray table, if he/she finds it to be dirty, the subconscious impression made is that the aircraft’s mechanical maintenance is not properly kept up. We all know that logically, one has nothing to do with the other. After all, the folks taking care of the mechanical maintenance aren’t the same people who clean the food trays. (Airlines have tried a lot of tricks to cut costs in recent years, but I don’t think that’s one of them – yet!) Remember though that we’re talking about the subconscious here, and logic has little to do with our subconscious mind.

So, how does this apply to your retail business? It is relevant in more ways than you might imagine. For example, when the customer steps out of his/her car, is there trash in the parking lot, or is it clean? When they reach the door, is the glass clean or full of finger prints? Upon stepping into the store, is the carpet old and stained or well taken care of? Are all inventory items stocked and neatly displayed? Again, it’s not that someone steps out of his/her car, sees a piece of trash on the ground and immediately decides not to use your business. At a subconscious level though, it does make an impression. So, if you treat each possible opportunity point as just that – an opportunity – you can make a huge difference in a person’s likelihood of choosing your company.

Walk Your Own Path
I encourage every store manager and owner to simulate the customers’ most likely service paths for themselves. Take a look at your Yellow Pages ad; call the store to ask the typical questions about product availability, pricing, location, etc. Then drive up to your store just as a customer would and park where your customers park. As silly as it may feel, go ahead and have someone show you a product or two. The more you can get into the role of your customer, the more you’ll get from this exercise. I think you’ll be surprised at what you learn when you put yourself in your customer’s shoes and go through the motions.

The one thing you will do differently from your customers is to change all of those subconscious opportunity points into conscious critiques. You want to look at every step of the service path with a critical eye. Don’t attempt to correct anything then and there, just make note of it to be addressed later. If you don’t end up with a list of areas for improvement, I would suggest you might not have been paying attention. I have never seen a “perfect” service path. And perfection isn’t necessary (or even possible) but if you strive for it, just think about the difference you could make in your business.

Next, have each of your employees perform a similar exercise. See if they caught areas for improvement that you missed or vise versa. When you go through this task, have your employees complete the task, and discuss it together openly, you are on the path to creating a service culture. And a true service culture within your business can differentiate your company from the competition in ways that plain old customer service can’t.

Let me know if I can be of assistance.

Competing with Wal-Mart in a Down Economy

Competing with Wal-Mart in a Down Economy

If you’re in any kind of retail business, you’ve likely felt some kind of pressure from Wal-Mart and the other big competitors for a long time. Let’s face it – they certainly aren’t new to the competitive landscape. Whether you sell electronics, clothing, food, tires or countless other categories of product, you can be sure that at least a piece of the pie has been going to the big guys. For many small to medium-sized merchants though, during the past few months the slice that remains has looked more and more like a sliver.

Who can blame consumers for being drawn to a low price when they’re worried about being able to afford gas to get to work or how to pay their mounting credit card bills every month? After all, even in good times people are in search of bargains. People looking for deals has been the driving force behind the massive success of Wal-Mart from the beginning. So how does the small to medium-sized retailer survive in this climate?

First, let’s recognize a very interesting, undeniable fact: Even though Wal-Mart has the lowest price on many items, not everyone shops there for all their household needs. If they wanted to, a family could buy just about everything they need for daily living from Wal-Mart, yet not everyone does. In fact, almost no one does all their shopping at Wal-Mart, and many never buy anything there. Why is that?

Within the answer to that question lies the salvation of the small businesses of this great nation. The bottom line is that even when times are tight, customers almost always choose based on more than price alone. You’ll never have the buying power of Wal-Mart, you won’t be able to even come close to matching the ad dollars they spend, and it’s not practical to go moving your business location every time a big-box retailer stakes a claim on a prime piece of real estate. So let’s focus on what you can do.

First and foremost, customers want to be treated well. Many customers have stopped frequenting retailers with lower prices because they were treated poorly or, more importantly, taken care of very well by a competitor. A recent study showed that 73% of customers who left a business for a competitor did so because of poor customer service or due to a perception that the first business did not care. Even more interesting is that 48% of retailers who participated in the study had the perception that price was the primary reason customers leave, whereas only 21% of customers said price was the deciding factor. Study after study shows that customers are willing to travel farther, sacrifice convenience and pay more for great service.

Satisfaction vs. Loyalty

What does it take for a customer to be satisfied? The truth is, it’s pretty easy to create satisfied customers. When I ask this question of groups I speak to, the responses consistently indicate that minimum levels of service are enough to cause people to feel satisfied. As a consumer myself, I know that’s true. If you greet or acknowledge me in a reasonable amount of time are pleasant at checkout and say thanks, I’m pretty much satisfied with the service. Here’s the problem with that scenario and the satisfied customer in general. If a competitor opens up next door and offers the same level of service and similar products at a lower price, I’m there! There is no reason for me to stay with competitor A when I can get the same exact experience at competitor B for a lower price. Customer retention does not operate on a “finders keepers” system. Just because they used you first by no means creates any sort of loyalty.

Many retailers would look at their customer service program and rate their success using a scale ranging from satisfied to dissatisfied. As we’ve already discussed though, a satisfied customer is no longer enough. Let’s take a look at the following diagram:

The left side of the scale represents loyal customers. At the very end on the left, these people wouldn’t use another company if you paid them. They are Promoters and will tell everyone they know about your company as if they were being paid a commission! We have satisfied customers in the middle, because that’s average, and average service is all it takes to create a satisfied customer. When someone is merely satisfied, they aren’t likely to say anything negative about your business, but they aren’t prone to referring people to you either. On the far right of the scale, if your customers are actually dissatisfied, they’ll tell everyone who will listen how awful your company is. They probably had a very bad experience and took it personally, and they are Detractors.

The survivors and thrivors of this economic period will be those retailers who look beyond satisfied and focus their efforts on creating loyal customers – Promoters. The best part about loyalty is that it lasts, so even though you might work harder to make a customer loyal to your business, the very definition of loyalty says that once he feels loyal it will be hard for competitors to woo him away. The other exponentially huge benefit of loyal customers is that they become promoters of your business, introducing you to even more potentially loyal customers.

So what does it take to create a loyal customer? Well, it’s not always easy, but it can be a lot of fun. Loyal customers enjoy coming to your store. While grocery shopping, buying new tires or getting a haircut aren’t necessarily associated with enjoyment, don’t we all like to go where we’re valued and taken care of? Of course we do. Devising and implementing programs that will cause customers to enjoy their visit to your establishment can be exciting. Put yourself in a customer’s shoes and let your mind go wild. What would make a visit to your business memorable or fun? What can you do that will have people looking forward to visiting you?

A great example of a company thinking in these terms is a small chain of oil change shops in the Northwest that I did some marketing work for several years ago. Now, who looks forward to getting their oil changed? It isn’t likely on the top of anyone’s “Yippee! I get to___,” list. When you bring a car to this chain though, you can be sure you will be greeted warmly with a smile, treated like the most important person in the room and dealt with honestly. While waiting for the oil to be changed in your car, you’ll be invited to snack on donuts or bagels in the morning or popcorn in the afternoon. Want some (good) coffee, bottled water, or a cold soda? It’s on the house. Enjoy it while sitting in a very comfortable chair watching TV. When the technician comes to say, “Mr./Ms. ___, your car is ready,” you’re likely reaction will be a disappointed, “Already?” By the way, when you get into your car, it will smell great, will have been thoroughly vacuumed and dusted, and you’ll find a rose on the seat. If you’re not into flowers, give it to someone you love and be a hero! Look forward to an oil change? Yes.

Wal-Mart charges about $20 for an oil change. This chain has people lined up from open to close at every location to happily pay $29.95. Additionally, while getting an oil change is something people commonly put off, the experience delivered at this chain encourages people to come in as recommended. The owner estimated that simply getting people to come in when their oil change is due rather than 500 miles later added $30,000 in annual revenue to each of his 21 locations.

So get to work creating Promoters! Think about what you can do in your business to cause your customers to look forward to visiting you and to tell others. A great way to start is to enter your store as a customer and imagine what would surprise you in a positive way. Start there, keep an eye on this blog for more ideas, and let me know if I can be of assistance.