Most retailers toy with the idea of starting a loyalty/membership club at some stage. Some start the process; some even keep going for a while. FlyBuys seems to have been around forever, even though the program reminds me a bit of the dog that chased the bus… and caught it.

A loyalty club is a concept that very quickly deteriorates from being a good idea to “it seemed such a good idea at the time.”There are two reasons for this:

1. The culture of instant gratification seems to be growing stronger, mitigating, nay, nullifying the idea of loyalty that is earned over time
2. The cost of doing/running such a program quickly escalates, especially in terms of time, to the point where the returns do not justify the investment.

Whether such a scheme is a good idea for YOUR business or not, is for you to decide. The good news is that the job of creating such a club/program is now a very simple exercise; thanks to Web 2.0.

(If you know what Web 2.0 means – skip to the next paragraph.) The internet is now commonly seen to be in the second stage of its evolution; the 1^st stage having been one that was dominated by static content that was pushed out to the internet surfing community. The 2^nd stage is one whereby the community (of internet surfers) actually create the content in a dynamic way. I use radio as the analogy. The ordinary music station is the Stage 1 model – where ‘someone’ is pushing out content. The Stage 2 model is Talkback Radio – where the listeners (community) actually create the content – and in a way make or break the station. The station owners still have a role to play, but it must govern with a soft touch. Web 2.0 is like talkback: users create the content and build the community. Examples are EBay, Wikipedia, Facebook, MySpace etc.

Web 2.0 provides several, easy to use platforms that make a perfect, FREE platform to run a Special Interest Group. One of the easiest is Facebook. Using this platform, you simply sign-up; it is free and you don’t need to download or configure anything. Then you create a ‘group’ – a few easy clicks and you can then invite your customers to join – however you do that. On Facebook you now have access to over 14,000 ‘widgets’ that allow you to:

• run quizzes,
• remember birthdays,
• upload photos,
• run classifieds,
• advertise events,

-          and pretty much anything else you could think of.

It has no printing costs and it is instantaneous. It does not need special planning, technology or anything else really – BECAUSE it is Web 2.0, but there is one very important caveat:

Many, many (most) corporates don’t 'get' Web 2.0. By that I don’t mean the technology of the opportunity; but I mean as philosophy. You may start the club (say Paddy Pallin wants to start one around outdoor adventure, or Uncle Pete’s Toys start one around a Model Cars) but you don’t “own” the club. As the administrator you can technically shut down the ‘club’, but there may be a fearsome backlash. You don’t control the conversations, and you don’t control the connections. You will be empowering your community of customers and you will be a catalyst for their conversations and their activities – and you will earn their loyalty in an unprecedented way. The reality is that such loyalty (in today’s world) is such a precarious thing that you must really think long hard before you embrace it.

This is the world where the customer/community are in charge, and they like the power that comes with it. Go carefully...

Have fun,

Dennis
An extended version of this blog can be found here.

At one level retailing is a very simple business, and in other ways it is complex. Either way, retailing is a tough business: it is a science and it is art. Sometimes the number of things to do can be overwhelming. By this I mean the operational workload, as well as the range of strategic variables that I business owner/manager can tweak to make the business better. (Perversely of course, that also means there are so many things that can go wrong too!)

Poor customer service is one of those challenges that most retailers attempt to address – usually a few times because everyone knows intuitively it is important. Just to validate that intuition, consider this extract from an article by Tom Ryan based on 2007 research by the Verde Group in the US.

Customers receiving an especially positive experience are likely to tell seven other people on average about the experience while those receiving a negative experience told 1.5 people.

But it also showed that such experiences are fairly rare - only 51 percent of women admitted to having a "WOW" experience in their entire shopping history, and only 39 percent of men did.

In summary: Good customer service (a WOW Experience) is so rare, and has such exponential impact on the business, it remains the holy grail of retailing.

You may also deduce from these observations that few retailers are succeeding at delivering WOW service.

Where to start?

If its longevity is any indication of its efficacy, one successful behaviour change program in the world is the 12-step program of Alcoholics Anonymous. Learning from the alcoholics seems contrarian but it makes a lot of sense. The first step in the program is an ADMISSION. Alcoholics must admit their addiction before progressing to the next step.

Business people generally and retailers specifically may want to consider this approach because:

• Admitting inadequacy precedes innovation
• Admitting failure precedes remediation
• You can only find solutions to problems you have recognised and identified.

Accepting that things are not as good as they could be is a prerequisite to improving things. Unless you admit and accept the diagnosis and actually emotionally embrace its consequences, your response will lack authenticity.

• It isn’t fun to admit you are wrong.
• Mistakes have many parents (and success only one)
• It sucks to think that your business stinks at customer service.

It is easier to blame customers, the environment, the government, the staff or the socio-economic climate. It is easy to assign blame or look for excuses. It is also easy to proclaim a few rules and announce that to the staff. It is easy to proclaim the importance of good customer service at a staff meeting. But implementing WOW customer service is not easy and all this comes to nought, unless you as owner/manager/ responsible person accept that the service is poor and that you are responsible, nothing will change.

“My name is Joe/John/Julie/Jane – and I am responsible for the poor customer service in my store.”

After the admission, the action steps to remedy it can be tackled. The difference this time will be an emotional engagement wit h the problem and a willingness to DO WHATEVER IT TAKES to get rid of that problem.

• It is clever psychology and it works.
• Because it works it is a good idea.
• If it is a good idea, it is worth trying.

So altogether now:

“ My name is …”

Have fun

Dennis

Cold-calling is probably the least favourite activity of most sales people – an unpleasant chore to get through. The same can be said of approaching customers in a retail store; it is not a favourite activity of sales staff, hence the customer complaints about being ignored or sales people being ‘rude’ and talking amongst themselves. They are just human – trying to avoid an unpleasant task. Customers have conditioned them to the view that they don’t want to be approached because 9 times out of 10 they respond with a ‘no thanks’ to an offer of assistance.

But if you could master the lessons from cold calling you will find many applications to customer approaches on the sales floor. Let’s consider the basic rules of cold-call mastery:

Attitude: If you start with the attitude that that a cold call is an interrupt someone and try and sell something to a prospect (suspect) you will have difficultly getting started. And rightly so.  You are not meant to interrupt someone in order to sell something to them; people know that instinctively and they know how they feel when they are on the receiving end. The right attitude is to put yourself in the ‘frame’ of being in a position to help someone, and that you are going to do just that. After all, your product or service does fulfil a need, doesn’t it?

The cold call is an opportunity for you to potentially help a client/ customer – so there is no need to be apologetic about the ‘interruption’.

The sales assistant must adopt a similar attitude. Don’t offer assistance – that is simply getting off on the wrong foot. (More about that in another blog some other time.) Be positive in your approach. The customer has already identified a need by wondering into your store.  Be positive and engage with the customer.

The pitch: Your pitch on the phone is not about selling your product as ‘quickly’ as you can before the customer can put the phone down. Your pitch is about securing the opportunity to help your prospect. You simply need to briefly explain the type of needs that you can solve (without selling your solution) and ask the client for an opportunity to consider their needs very carefully in a face-to-face interaction. The retail sales assistant does not start the conversation by selling, but by identifying a need. No comment about the suitability for a product is needed! (In fact, it is silly to make a ‘casual’ comment that the dress the customer is holding up would suit them nicely. Experienced customers would easily turn that into an opportunity to rebuff the sales assistant by claiming the purchase is not for them but someone else. The sales assistant’s credibility is immediately in tatters.)

Instead, engage with the customer by establishing instant rapport, and start to assess the need/want that brought them into the store. That is the first job – not selling product.

The process: Until you have mastered the art of cold calling/ approaching customers, it will still be experienced as a chore, and it therefore requires some discipline to commit to doing a certain amount of cold calling. If you eat a frog for breakfast, the day couldn’t possibly get any worse – or so they sayJ. From our perspective, it is good to get the cold-calling out of the way and over with as soon as possible. (That is until you learn to love it.) Making the calls before 9am is a good idea because:

• Decision-makers are usually in the office before then anyway,
• But the gatekeepers are not.

Your chances of getting through to the person you want to speak with is dramatically increased. Once you learn to love cold calling, stay disciplined. You could speak to more than 1500 potential customers a year if you make one phone call per hour for each working day.  Each call only takes 20 seconds – any longer and you are making the mistake of trying to sell.

In the retail environment, if every sales assistant approaches one additional customer per hour – and converts 10% of those into the average sale… boy oh boy… how good would that be!

Much has been said (maybe too much) about the importance of ‘customer service’ in the retail environment. It has now become more than a cliché – in fact some retailers actively zone out when those two words are mentioned. 

I have blogged elsewhere on retail$mart about the importance of managing the customer experience. There are literally 100s of organisations (Ganador is no exception) who offer Customer Service Training (CST). There is a lot of talk, but...

Quick Quiz #1:

How much your average customer worth to your business?

Don’t skip over the question; consider it for a moment and put a $ value on your customer.

$500? $5,000? $50,000? $500,000?

Superior customer service increases the Lifetime Value of every customer. The debate about whether the customer is ‘always right’ is simply irrelevant. The whole point about customer service is that, because you appreciate the LTV of your customer, you are willing to make short term ‘sacrifices’ in the effort to retain a customer.

Customer Service is the essence of retailing; check out this story and this one (Scroll down to Retail Experiences1 – which is the shoe-shopping story) to see what I mean.

Quick Quiz #2:

How would you rate your level of Customer Service – say in percentage terms? 70% 80% 100%?

Now ask yourself how your average customer would rate your service – and be honest.

Is there a gap? If there is, that should be the #1 highest priority resolution for the New Year, and every year thereafter.

Customer Service is not an add-on initiative; it is not a ‘strategy’ or a project. It is what retailers do. Period! It is not about smiles, it is not about tolerating rude customers or solving customer complaints. It is something altogether different, and that is the challenge that a retailer faces: to create and deliver profitable customer experiences. It is not even about buying or merchandising or pricing. It is about how buying or merchandising or pricing COULD create a positive customer experience...

Good luck for 08 and my the best of 07 be the worst of 08

Dennis

Postcript for readers who are really interested...
Senior managers forget that they may have gone through a few 'customer service improvement projects' and are throughly sick of it and they 'know' it does not work; but forget that the frontline people are in all likelihood quite different from the frontline people of 1,2 or 3 years ago. Just because you are tired of it, does not mean it is irrelevant.

I wonder if any of these 100s of companies make money from CST? We certainly don’t and we decline the opportunity to offer CST more than we actually accept it. CST only works if it is part of an integrated effort to change systems, structure, culture etc – if you are interested, write a comment and I will address this in a future blog.]

Source: http://www.flickr.com/photos/weasello/337754185/