Serving Customers in Real Time
Customers want to get into and out of your store fast. They value their time and expect you to respect it.
When you think about servicing customers, you should consider that consumers shop fewer stores today. Because of increasing time constraints, by the year 2000, Americans making a major purchase will probably visit only 1.3 stores.
This is not the result of fewer stores and fewer choices. On the contrary, there are more choices than ever. What’s changing is the customer. Today a retailer who advertises a product but then doesn’t have it in stock catches more flak than he did 5 to 10 years ago. A consumer today considers that a retailer who runs out of inventory has committed a personal affront: “Look, I read your ad and I came to your store. I gave you my time and now you’ve abused it.”
What this tells us is that today’s customer wants to get in and out of that store as fast as possible. He values his time and he expects you to respect it. When it comes to buying furniture, for instance, he expects to spend about 23 minutes in a store looking. And although this is his ideal perception of time spent, he will tolerate spending as much as 45 minutes in a store when actually making a purchase. Our research also reveals that it takes at least 50 percent longer to sell to multiple decision-makers. So if it takes 45 minutes to sell a single buyer, you can add on another 22 1/2 minutes when you’re selling a couple. A furniture retailer who knows this can employ enough knowledgeable salespeople to provide quick answers to customers.
Retailers who devise more ways to respect the customer’s time are providing definite services. For instance, a store could reduce the wait for a salesperson, provide clear signage to direct the customer, have a more natural traffic pattern, and so on. This brand of service is just as important as fast checkout or a prompt delivery truck.
One of my clients, Ivan Steinberg, head of Steinberg’s, a chain of successful electronics and appliance stores in Cincinnati, understands the multiple meanings of service very well. When I first did a study for Steinberg’s, Ivan wanted us to find out why his stores were not getting the same amount of repeat business as in the past. Ivan’s father had founded the store in 1921, and for years it sold crystal sets and battery radios. Ivan entered the business in 1950, and shortly thereafter, the store began carrying televisions. Today, with 19 stores, it is the market leader in the Cincinnati area. However, when Ivan first contacted me, business was beginning to slip. Concerned, he asked me to find out what his customers and other stores’ customers thought about Steinberg’s.
I delivered the information our research confirmed concerning how the Steinberg’s service department was viewed. The company was using outside service agencies, which took three to four days to service customers. Ivan had been so close to his business he wasn’t aware that the competition was providing superior service. Based on my recommendations, Steinberg’s found ways to shorten the time to make service calls, and business picked up. Then Ivan asked, “With our improved service, Britt, we’re starting to get a lot of repeat business from our customers. But what can we do to perform even better?”
“Our study also revealed that your stores look stale,” I replied.
“Stale? But they look fine to me,” he answered.
“That’s because you see them every day and are used to them. Now, if you really want to generate repeat business, here’s what I suggest.” Then I explained what was needed to redo the physical appearance of his stores.
Following my advice, Steinberg’s began a campaign to either remodel or close every store in the chain. It made a huge difference. Then Ivan asked, “What else do you advise?”
I told him, “I think there’s a lot you can do with the appearance of your salespeople.”
With this recommendation, Steinberg’s inaugurated a dress code for its sales force. Today, when you walk into Steinberg’s, customers have no problem identifying the salespeople. Every male salesperson wears a dark blue blazer, gray pants, a tie, and a solid blue or white shirt. “They look like they just came out of Harvard,” Ivan says proudly. “Now when you see the appearance of our store and our sales force, it’s quite impressive. There’s really a difference between us and our competition.
“We finally looked through the customer’s eyes,” Ivan continues, “and we asked, ‘Where would you buy? Would you buy from our store or from the competition?’” While Steinberg’s always had the reputation of having the lowest price, price by itself is not enough today.
Ivan Steinberg is a fast learner. He recognizes what I tell every client: “Today’s biggest challenge with a customer-driven company is that competitors will sometimes add a new and improved service—or customers simply change. This means that the excellent service you provided yesterday may not meet your customer’s needs today.”
A recent survey we conducted shows that the American consumer measures service in a retail store by the following 10 standards, in order of priority:
• The employee shows that he or she wants to be at work. Customers can sense how your people feel about their jobs. Employees who are well treated reflect that in their performance.
• A salesperson is available to offer genuine suggestions. Customers don’t want a salesperson to “bother” them, but they do welcome good advice.
• The store is clean.
• Signage makes the store easier to shop. People don’t want to waste time looking for merchandise. Don’t confuse them with poor signage.
• The salesperson is knowledgeable and also knows the store’s policies and procedures. In addition to product knowledge, the salesperson should know what the store can and can’t do for customers.
• The store’s return policy makes the customer feel the retailer wants to satisfy him or her.
• The store guarantee has no exceptions. Customers don’t want to feel a guarantee has fine print that takes away what is provided in the big print.
• The store has wide aisles. This makes it easy and fast to shop the store.
• The salesperson is a well-dressed professional.
• The store has a 30-day, complete-satisfaction guarantee. Customers don’t really expect you to give them their money back on a product if they have waited an unreasonable length of time to express their dissatisfaction. But they do expect you to provide a broad guarantee for a 30-day period.
We conducted another study that focused on how companies measure another company’s service—for example, a manufacturer that buys machinery from another manufacturer, or a retailer that buys merchandise from a wholesaler. This study did not involve a consumer product. As a result, a different set of criteria is used. The reasons for satisfaction are, in order of priority:
• The orders are shipped complete and in full. When business owners order goods from a manufacturer or supplier, they place great importance on having the complete order shipped on time and in full. They don’t want goods coming in piecemeal.
• The company honors its commitments. If a company says it will do something, it follows through. For instance, if the company has agreed to rush an item or provide X amount of advertising dollars, it fulfills that promise.
• The company’s reps promptly return calls when notified of a problem. A rep must be more than the initial salesperson. He must be available later when things go wrong. The rep is expected to handle the problem.
• Goods are delivered on time and in good shape. Today’s companies won’t tolerate late shipments. If it’s supposed to be delivered on Monday, it had better arrive on Monday. Tuesday is too late. With more companies running on just-in-time delivery schedules, they will not tolerate late deliveries—or worse, damaged goods.
• Senior management is expected to make regular visits to a customer’s headquarters. Today’s business customers want the company’s top decision-makers to visit them at their plant sites. They want senior management to have first-hand exposure to their problems. Although this priority is listed as fifth, it’s being expressed more today than in the past. Our studies indicate that 70 percent of managers say they have difficulty getting the top-ranking executives with whom they do business to visit them.
Our survey of department store customers showed there were 147 ways they measured customer service. Here are the top 15 ways, in order of priority:
• The store is clean.
• The displays are impressive.
• Brand names are properly used and visible.
• Within eight seconds, the customer is made comfortable.
• Excellent sales event presentation is matched by low sales prices.
• The salesperson’s professionalism is reflected in his or her attire.
• Store management communicates, “We are the best,” and the customer can feel it.
• The store gives customers extraordinary treatment through the total retail experience with no breakdown.
• The customer hears “thank you” and feels it is sincere.
• The customer’s knowledge is respected during an exchange and sharing of information.
• Customers are asked questions about their personal needs—and feel the staff are involved with what they want.
• Customers see staff as empathetic—as putting themselves in their shoes.
• The retail experience involves a relationship, not just selling the merchandise.
• The salesperson makes quality suggestions, not phony ones.
• The salesperson assists the customer to buy quality.
If you can log only one number into your memory, it should be the 1.3 stores per major purchase that the American consumer will shop in the year 2000. Coupled with the fact that there will undoubtedly be more stores with more choices than ever, this alarming number substantiates that if you are not the first store shopped, your prospects are severely limited.
Not only is this 1.3 number a warning for America’s retailers, it is also a strong signal for every manufacturer, distributor, and service company. All customers are demanding more, and if you don’t give them what they want, it is certain that your competition will.
C. Britt Beemer is founder and chairman of America’s Research Group, a Charleston, South Carolina, firm specializing in studies of consumer behavior, and has managed political campaigns for members of Congress.