Chapter Nine. We love shopping here!

Give customers the best possible experience when they visit your store—that’s how you’ll make more money. There—the most blindingly obvious sentence in the whole book! Yeah, of course such things as cost control, the basics of margin, and pricing have to be right too, but the starting point for everything we do in retail is the customer. How they feel about us, what they want from our stores, and how we meet those needs. Sending customers out of your stores with a big smile on their faces, a smile that lasts through getting their new stuff home and using it, is your absolute priority. So, how do we paste that smile on their happy chops? Read on, my friends, read on!

Great customer service

I often talk about how customer service isn’t an add-on activity—that great service quality comes from everything you do as a retailer. Some clients, understandably, feel that I’m hiding the secret to great service quality ... well, thing is, there isn’t one. What I can do here though is to point out more of the places in which you can work to create overall improvements in the customer experience.

That word “experience” is important: Great customer service is made up of lots of individual customer experiences and I much prefer using the word “experience” rather than “service.” It’s not a nod toward consultant blather—I reckon it’s easier to understand how to improve things if you think at the individual level: “What can I do for each individual customer? How can I make their specific experience of my store a great one?” But when you talk about service, it feels like a nebulous thing—it’s general and non-specific.

First and foremost, it’s worth talking about why most initiatives focused on service quality fail. Sometimes a marketing team will take a look at their list of “things to do” and one of the bullet points will read “make customers love us again” and they’ll commission an agency, or two, to come over and create some sort of “service event.” They’ll then have good fun taking this event around the store estate and they’ll say to people “we order you, albeit in a nice way, to smile at customers and be their friends and love them so they will love us.”

And these one-off initiatives often deliver big early uplifts in customer satisfaction—then those gains die off, usually quickly, and before long everything returns to normal. That’s because the focus always moves on—no matter how committed a retailer is to raising customer service quality, there is always another issue waiting in the wings to occupy the minds of management and teams.

Permanent improvements in standards of customer care have to be earned from the ground up—you can’t change things by layering initiatives onto unstable foundations. Building from the ground up is harder work but ultimately more satisfying because gains become self-sustaining and permanent. Dieting is a good analogy—crash dieting creates instant weight loss but almost always results in a net weight gain once the focus slips. Changing eating behaviors, seeking support, changing attitudes to food, and learning about nutrition means slower weight loss but, for the vast majority, permanent and self-sustaining success.

“Self-sustaining” is the key phrase—a successful assault on changing the behaviors and relationships that lead employees to want to deliver great customer care becomes a positive viral thing: Changes feel good, staff get more from their employment experience, and customers get more from shopping the store. Even better—these changes reinforce each other in a virtious circle:

Happier staff → better customer experience → happier customers → better interaction with staff → happier staff ... and round and round.

Better still, that loop delivers gains in revenue and profit and draws in improvements in employee retention and reductions in employment costs. It is an absolute win-win.

One team at a time

As a store manager, you might now be thinking that there’s nothing you can do to influence levels of service quality in your store, that it’s all down to centrally dictated policies. Well, you can influence service standards—your leadership is absolutely vital in creating a good place to work and in filling it with a motivated team. Doing that, following the advice in the “Team” section of the book will make a massive impact on how it feels to come and shop your store—with all the benefits that generates. You might have some weird service rules in the business, but you as a leader are making customer experiences into great ones.

Where things get tricky is in navigating your way through the negative stuff that sometimes you’re asked to implement. A great example of this was seen at electrical retailer Powerhouse before that business, funnily enough, got into serious financial trouble and went bust: at one point staff were forced to ask every customer if Powerhouse could please sell them their gas and electric. It was really pushy—staff felt uncomfortable and customers absolutely loathed being asked.

And then they went to Comet or Currys instead.

Faced with something like that, as a manager, what do you do? To be honest, the right thing when it gets that extreme is to read the writing on the wall and jump ship. For most of you though, any negatives impacting on the employment experience, and therefore the customer experience, will stem from good old-fashioned well-meaning but poorly informed policies—unforeseen results of otherwise sensible decisions. Your role as a manager is to try to make these work, at the same time as feeding back your experiences and explaining why such-and-such isn’t perhaps the world’s greatest idea. Get customer and team comments, show you have tried to make a policy work, and create a compelling case, with alternative solutions in it. Then talk to your bosses.

We need answers on this customer service thing

I know, I know, you’re still thinking I’m on a cop-out here. Right, here’s a bunch of stuff you can do to make sure that you and your team are delivering great customer experiences and that you send your customers away delighted.

Employee satisfaction

I’ve probably gone on a bit about this but it’s worth saying again: Put into practice the stuff in the “Team” section of this book—the most effective way to ensure your team is delivering more great experiences is to improve the satisfaction of your staff. Having a reward and bonus program based around customer satisfaction scores can be really effective too. It helps your team to make a direct link between how they look after customers and what goes into their own pockets.

Simplify

Be simple and straightforward for customers—make promotions easy to understand and simple to redeem. Use plain language in your advertising and communications: Be clear about what you can and can’t do.

Deliver on the promise of your Big Idea

Whatever that Big Idea is, it is also a promise to your customers that you will be what you say you are! If a customer is coming to your store expecting you to be this Big Idea, then make sure that you really are and keep looking out for all those things you could be doing that serve to support and emphasise that.

Meet the fundamental discovery need

All shopping is about discovery (see “Store” section): Help your customers to make those great discoveries. Surprise, delight, inspire, and wow them. Be proud of your stock, make heroes out of the amazing and brilliant, and, above all, make sure your people are knowledgable, that they have access themselves to your product and that they are open-minded enough to listen to customers” real needs and then to find great ways to meet those.

Be consistent

Make sure your team are on top every day—make sure you exceed company standards, stay on top of your game. And across the company ensure that the experience is great, in every store, every time.

Fix problems directly

See, the thing is—any one of us could end up on Watchdog one day with Anne Robinson’s curiously wonky face looming as she tells us that we are the devil incarnate. That’s just the way the world is, but we can reduce our chances of this happening by accepting that we will make mistakes sometimes and then by getting on and fixing those problems quickly, fairly, and with a smile.

Feedback

Making it easy for customers to give feedback to you is critical in improving service quality. If you haven’t got a customer complaint process, one that’s easy for customers to use, create one. Give customers quality surveys that they can fill in and send back to you. Give them prepaid envelopes to make it even easier for them to do that. Give out your email address and watch for Twitter mentions. Encourage complaints and think of them as free market research. Some customers will rant and rage but at the heart of almost every complaint is a truth that, once learned, will help you to make your business better. Oh, and it’s far better that customers complain to you, and that you resolve their complaints, than it is for them to complain about you to their friends instead.

Be honest and open

If you don’t know the answer to something—say so and then find out. Be ready to admit your mistakes and involve your team and your customers in fixing things and in improving the store. Have an open mind in all situations.

Don’t pay sales commission

Put your people on individual sales commissions and some of them will shark your customers. That’s simple, straightforward human nature. The best service organizations pay people bonuses based on customer satisfaction combined with something reflecting overall store-profit performance. Or just be a great employer and give your front-line people salaries. Some of the happiest, most satisfied customers in the U.S. are customers of The Container Store: “Our salespeople do not work on commission; instead, they’re either salaried or paid by the hour with wages far above the retail industry norm. Therefore, they often work together in teams to find that complete solution for the customer, which allows them to spend as much time as necessary to help customers find what they need.” That’s simple retail right there.

Smile and be nice, dammit!

Okay, I’m not talking the pained smile of the retail damned—but do try to put your troubles to one side when dealing with your team and your customers. Use the great opportunity you have as a retailer to talk to people, to enjoy their company, and appreciate the fact that you’re not stuck in an office staring at the same ten faces all day every day and fearing your turn on the coffee run. Retail is ace like that—for every mean-spirited or rude customer, you’ll work with a hundred who are good fun, who are loving being out and spending money. Shopping is fun—have fun yourself, you old misery.

Respect your people and they’ll respect your customers

Treat people how you yourself would like to be treated. Be nice, be respectful, give the benefit of the doubt, and remember that your people are grown-ups. Treat your team that way and they’ll do the same with your customers.

Living and breathing it

Every decision you make must be in the context of “will this be good for our customers?.” Every person you hire must be someone you think customers will enjoy being served by and every process, promotion, and event you choose must be for the benefit and delight of customers. Delivering great customer experiences is not a bolt-on activity—it is the only activity. Every word in this book is written in the context of great customer service.

If experiences are poor, business will suffer. Customers have less patience for poor service than ever before and have even learned how to complain. If there is one secret to delivering great customer experiences, it is the knowledge that great customer service begins with your people.

Great moments

What are those great customer experiences? What do they look like? I tend to feel that it’s mostly about empathy, common sense, turning on and off the cheek and the banter at the right time, delivering on your Big Idea, and making sure people leave your store with smiles on their faces. Here’s a bunch of examples of great customer experiences culled from our customer panel. Almost all of them are pretty ordinary but in each case the effect on the customer is huge: big enough for them to (a) remember it and (b) to bother to write about it on a forum. In each case, these are customers who will favor the stores involved again.

People make the difference to great customer experiences

Of course, what rapidly becomes apparent in a service business like ours is that you can only look after the customer by looking after your staff. So, the route to creating value for the customers is through management of your people. Good retailers always understand this instinctively and we, at Tesco, regard it as a major priority.

Sir Terry Leahy—CEO, Tesco.

Quote taken from the fantastic Uncommon Practice by Andy Milligan and Shaun Smith (Financial Times Prentice Hall, 2002).

This year, I pledge my loyalty

Customer loyalty is a myth, a consultant’s pipe dream. A nonsense. Trying to gain it, trying to buy it, trying to bribe customers is ridiculous, costly, and pointless. A customer is no more loyal to Top Shop than she is to New Look. She’ll happily shop both of a Saturday afternoon. Incidentally, Tesco Clubcard and Sainsbury’s Nectar are called “loyalty schemes” but they aren’t really, they’re customer data v. rewards programs. You let us understand how you shop and we’ll give you a few tokens as a thank you. Tesco, in particular, have been able to do great things with that data. It’s a worthwhile exchange.

So, some of us might be loyal to our brand of breakfast cereal or toothpaste but we are not loyal to the names above the door of the various places we can buy them from. But even that brand loyalty is moot in an age when choice is ubiquitous and consumption predicated on disposable living. Sure, personally, I’ve never forgiven Colgate for discontinuing my favorite sub-brand of toothpaste and actively seek out remainder stock of the green nectar from discount stores (I have 20 packs in reserve right now—thank you, Home Bargains in Liverpool) but if Macleans come up with a toothpaste that tastes and performs as well as the green one—it’s so long, Colgate, and not a second’s pang of regret will be felt.

This is the reality, my friends. Time to find a new reality—and here it is.

First-visit advantage

First-visit advantage is a move on from the blunt definition of customer loyalty. Traditional customer loyalty holds that customers will always come to you to satisfy their needs in your product areas. To the exclusion of all other stores. Nonsense. The world doesn’t spin like that.

But what if we can build formats so great and customer experiences so compelling that people are prepared to give us the first opportunity to sell to them on any given shopping trip? So compelling that they will come to you first before moving on to your competitor’s stores. There is loads of evidence, including really strong stuff from Paco Underhill’s Envirosell team that shows a massive percentage of customers will buy, or return to buy, the first item they really like on a shopping trip. And common sense says getting the first crack at satisfying customers” needs is a good thing.

The idea of first-visit advantage is that customers enjoy the experience in your store so much that whenever they plan a DIY project, or want to buy some clothes, or want to make something nice for lunch, that yours is the store they visit first. They may park their car nearest to your store rather than a rival’s, or visit your retail park before moving on. Being given first crack of the whip leads to a much greater probability that the customer will buy from you in preference to a competitor.

It is a very powerful concept.

First-visit advantage can be won in three ways: through promotion, through preference for your format, and through the human experience in your store. Remember especially that the human parts of that equation are always the most powerful.

Human interaction is bricks-and-mortar retail’s secret weapon.

As retail trainer Kate Phillips pointed out (I promised I’d credit Kate with this bit, so I have), there is one area of loyalty that does still mean something to customers: loyalty to people. And she is of course right—wherever you have the opportunity to build something personal, there’s a chance that people will respond very positively to that. It’s not about forced smiles and pretending—it’s about developing a store culture in which staff feel comfortable to chat with customers, to share honest opinions on product, and to banter and be themselves. Much of what the “Team” part of this book tries to do is to support exactly that type of culture—it’s very valuable if you can do it. It’s also one thing a traditional bricks-and-mortar store can do better than one online—never underestimate the power of eye contact and a genuine smile.

The four rules of performance improvement

There is no secret to performance improvement. The techniques can all be learned. But just as some racing drivers can make an identical piece of metal move consistently faster than that of a teammate, so it is that some retailers are able to improve performance better than anyone else. I’ve known a few racing drivers over the years and the best of them have one thing in common: consistency of line. They take the right line through more corners more times than anyone else. That’s it—nothing magic or secret or unknowable. The same thing holds true when it comes to performance improvement. There is no secret; it’s about getting the details right and paying attention to the fundamentals—checking you’re consistently hitting the right line.

The rules of performance improvement are so beautifully simple and there are only four of them.

To improve performance you can:

1. Sell to new customers.

2. Sell more in each transaction.

3. Persuade existing customers to return to your store more often.

4. Improve margin by cutting overheads and improving sales quality.

This is another of those “it’s not rocket science” moments. The challenge is of course in understanding how best to apply each rule. The chapters in this section of Smart Retail deal with those things you can do to produce direct results from applying these rules to your customers. People and store issues also have a part to play in the successful application of these rules, of course, but it is what you can do directly for the customer that has the most significant impact.

Priorities

If I was forced to choose just one of the four rules of performance improvement over all others, the one I would pick is number two, “Sell more in each transaction.” Driving up average transaction values is all about maximizing every opportunity. That in itself is a powerful business improvement philosophy. “Make the very best of every customer who walks in” is your first consideration.

Added value

Everyone wants a bit of something extra, something free, or on top—a bit of added value. Where we retailers sometimes misunderstand that is to think that added value needs to be made out of actual “stuff.” Customers place value on the less obviously, umm, valuable too—the convenience of a local corner shop is added value, for example, and in certain circumstances a customer will happily pay a little extra for that added-value convenience.

In black and white here the list below feels very ordinary—it is pretty ordinary as it goes. Where the magic happens is in the way in which you and your teams put this stuff into practice. A “tip sheet” sounds a bit dull—but written with passion, fun, energy, and a bit of wit, it can be a really welcome part of the customer experience. Do these things consistently and have them support your Big Idea and they carry significant power.

Here’s that list:

• Recommendations

• Product demonstrations

• Masterclass technique demonstrations

• Product training for customers

• Tip sheets

• After-sales service

• Trade-in

• Expert staff

• Credit facilities

• Loan product availability

• Pre-order facilities

• Services such as tailoring

• Specialist product ordering

• Delivery services

• Free samples

• Try-before-you-buy

• Convenience

• Design services

What I need—what I want

We’ve talked a lot about understanding customers and that’s because it’s fundamentally important—they have needs and we have to understand those needs and steer our businesses and the customer experiences within them toward those needs. So here’s a neat thought exercise that will help you to get a clearer picture of what those needs are.

It’s a tough exercise, this one—I always ask my clients to brainstorm those needs and to write down as many of the possible needs they believe their customers might possibly have. Instinctively most retailers kind of know what these are—but articulating them is a struggle.

So why bother? At its most basic, understanding the most likely of your customers’ needs makes it easier for you to sell stuff to those people through the addressing of those needs.

The first bit of this exercise seems a bit silly at first but try it before reading the “answers.” Try to do this in a group if possible—better ideas tend to emerge that way.