Retail Contrarian

Michelli + Fleener = Shared Wisdom

Dr Joseph Michelli, bestselling author of The Starbucks Experience, recently posted a brief podcast on his site in which he talks about our own Doug Fleener's 50 Ways to Improve the Customer Experience. An insightful and outspoken proponent of the customer experience in his own right, Dr. Michelli offers some flattering words for Doug and Dynamic Experiences Group, and shares 12 of Doug's 50 tips with his listeners. It's definitely worth four minutes of your time.

Investing in Beyond Sorry

Last month I was in San Antonio to speak at the National Association of College Store's annual show. I was supposed to stay at a brand-new Hyatt hotel but due to construction delays it wasn't open yet.  I was moved to the Marriott hotel across the street and when I checked in I was given an envelope from the Hyatt.  In the envelope was a letter from the Hyatt general manager apologizing for any inconvenience - and a $100 American Express gift card. It was a wonderful gesture and a smart investment.

It's one thing to say you're sorry; it's another to ease the customer's inconvenience.

I sought out the Hyatt manager at the Convention Center and thanked him for Hyatt's generosity.  I have already told at least 10 people about this and with told thousands in my daily newsletter The Daily Retail Experience. And the next time I'm in San Antonio you can bet I'm staying at the Hyatt. Smart investment, that easing the inconvenience

Go beyond "sorry" and invest in easing your customer's inconvenience.  Remember, a customer is a terrible thing to waste!

How to Ruin Brand Loyalty

Recently, Doug and I had the opportunity to visit some stores throughout the area. Some were clients, some weren't. I was especially excited to visit one store in particular because I have been a loyal fan of their product and brand for many years, and had yet to visit their store.

Upon entering, I was struck by the awesome assortment of product, most at very reasonable prices relative to other brands in the industry. I felt like a kid in a candy store. My immediate thought upon entering was that if I had a larger house (and a more understanding wife) I could easily spend a few hundred dollars in the short time we would be there. I found things I didn't even know this company sold. I found great impulse items. I even found stuff I didn't know I wanted or needed until I saw it!

But what kept me from going on a crazy spending spree was the staff. The behaviors and attitudes of the three or four employees who stationed themselves behind the cash wrap completely turned me off. Here I was, picking up products, commenting on things, remarking on the great prices, and the staff remained completely aloof and uninterested in my desire to spend money. There was no attempt to build rapport, apart from a cursory and well-worn "How can we help you?" Instead they discussed lunch, talked among themselves, and sat on the back counter. If somebody were to erase the retail environment from around this group, it would be difficult to distinguish them from any other group of twenty-somethings hanging out at the mall, much less determine what brand they were representing. Remember, this was a manufacturer-owned and operated store. The employees work directly for the brand they're selling... or not selling, in this case. One would think that the talent on the sales floor would provide an experience that's representative of the quality and uniqueness of the brand's product. Instead of adding value and raising customers' perception of their product (and, not coincidentally, justifying the premium prices), the staff's lack of interest in their customers and product nearly ruined my appreciation and loyalty for their brand. Imagine what it would do for a customer who had yet to be enticed by the magic of these products.

Whether you're a manufacturer or retailer, brand loyalty is one of the most valuable assets you can build in your customers. The trust and advocacy that comes from a loyal customer is priceless. It's critical to empower employees with the skills and tools necessary to build brand loyalty in customers. Otherwise your brand simply becomes a name.

The Gifts That Keep On Giving... Back to You

The holiday season is fast approaching its inevitable conclusion for another year. Hopefully your sales have been better than last year and your staff has delivered exceptional experiences that will turn your customers into loyal advocates. And hopefully you've had the opportunity to complete your personal yuletide duties. In addition to meeting your responsibilities to your family and friends, you've hopefully remembered to include your peripheral business associates in your holiday cheer. Consider how many individuals impact and support your business without being your direct customer. Of course, you should already include your employees in your year-end thanks. How about the FedEx/UPS/DHL courier who picks-up/delivers to your site every day? The janitorial staff? The postal worker? The bank tellers? How about the staff of neighboring stores? The caffeine king or queen who provides you with your first jolt of bean juice in the morning? If you're on a first-name basis with any of these people, do yourself a favor and include them as recipients when it comes time to hand out small gifts or cards. Heck, even if you're not on a first-name basis (and goodness, you should be) these folks you interact with regularly can become great advocates for you and your business.

What's that you say? You're already paying some of these folks for the privilege of your business? Well, of course you are. But thanking somebody for helping you to run your business is different than paying an invoice. And we're talking a token gift here, not a college endowment. In fact, many companies forbid their employees from accepting gifts above a certain dollar value. A personal note of thanks, a $5 gift card to the coffee hut, or some tchotchke is sufficient.

When you remember those who helped you succeed throughout the year, they'll continue to do so throughout the new year and beyond.

Predictions for Retail in the New Year (Plus One)

The National Retail Federation's Stores.com website recently published a list of predictions for the upcoming year in retail. While there were no real surprises (consumers will continue to shop despite threats of recession, "green" practices will continue to pervade the way retailers appeal to customers, shopping excursions will become less of an event for more shoppers), there were a few interesting points of interest and one glaring omission.

First, the interesting bits. While social networking remains a dominant activity on computers, its infiltration into portable devices (cell phones, smartphones, media players) will drive a need for retailers to provide a more proactive approach to engaging customers. When a customer is able to get their questions answered by referencing a website or personal expert via their handheld device while they're standing in front of the product, retailers will need to be able to communicate a compelling reason to buy from them.

Another interesting, if not perplexing, conundrum facing retail in the next year is the growing rate of consumers' paradoxical desires. As Stores.com puts it:

You know this guy, right? Installed solar panels on the roof of his home; insists on cutting his grass with a push mower; recycles with vengeance. Yet, parked in his driveway is a Hummer. Having trouble putting the pieces together? That’s the challenge retailers and marketers face.

The real challenge will be to provide an experience on the retail floor that appeals to all sides of this consumer's psyche. Expect to see more and more customer segmentation and personality profiling studies over the next twelve to eighteen months.

Finally, it looks like one prediction was left off of the list. It speaks to a few different items on the list, but it deserves to stand out on its own because it's something retailers can have direct control over so that it doesn't adversely affect their business. We predict that over the next twelve months, customers will continue to grow increasingly intolerant of unengaging store personnel. As time and money start to reach parity in terms of value and scarcity, and more and more retail employees are brought on board with little-to-no customer engagement skills development, the result will be more consumers turning to the web or other avenues for their purchasing, eroding the loyalty that's so valuable to growing a business.

Well, just like Ebenezer Scrooge was able to prove the Ghost of Christmas Future wrong by changing his ways, retailers can thwart this course to destruction by investing the resources into making their sales talent engagement specialists. The retailers that succeed beyond the next year will be the ones that have customers singing the praises of their people.

Which is Worse...

We here at the Red Friday Coalition recently received a report from a casualty of a Big Box retailer's November-long tactics to get customers into their stores. It seems that this potential customer found the Big Box's offer of a new High-Definition DVD player too good to pass up. Imagine, a $300 next-generation movie machine for only $199, plus two free movies in the box, three more free movies (customer's choice) at check-out, and five more free movies by mail-in rebate! Even his wife was willing to let him spend the money.

Unfortunately, there was a higher price to be paid in the form of indifferent, poorly prepared and trained store employees. The first challenge was to find the product. Despite there being at least a dozen associates in the electronics department, they all looked, moved, and acted as if they were well-occupied with activities more important than selling. When the customer finally had the chance to inquire about the DVD player, one associate pointed him to a display that turned up empty. Another confidently stated that the store didn't carry that model. The third took the time to find the product and confirm the sale price, but then disappeared after handing the box to the customer and instructing him to pay at the register.

The second challenge was to confirm the offer of three free DVDs. Evidently nobody in the store was aware of the offer despite the ad appearing in that Sunday's circular. The cashier had no knowledge of it, so she called a supervisor. The supervisor was equally flummoxed, and called an associate from the electronics department. The associate called the department supervisor, who finally looked at the circular sitting next to cash register and confirmed the deal.

Nearly ninety minutes after entering the store, the intrepid customer walked out with his new high definition DVD player and free movies. He also left with a new understanding of the old line (often attributed to Jimmy Buffett): "Which is worse, ignorance or apathy? I don't know and I don't care."

Apple Goes Wal-Mart?

Gary over at infoAppleStore.com has an interesting tidbit today about a recent job posting on Apple's site. It seems the Apple Stores are looking to fill a newly-created position of Concierge, which at first glance looks like a greeter. From the description, however, it appears that this job is designed to go beyond the typical "Welcome to [insert store name here], have fun shopping, and don't forget we're watching you" approach of many big boxes. You can read the description here, but the nutshell version specifies an outgoing people-person to welcome customers, excite them, direct them, and, when the customer leaves, provide them with a "fond farewell". It sounds like Apple is taking a basic but oft-overlooked notion (that customer's first and last impressions of the store will define their experience) and making it the key responsibility of one staff member. Interestingly enough, these positions are currently only available in roughly half of Apple's stores.

Will it work? Will it erode the level of service provided by other store team members? Will Apple take a unique tact to ensure their Concierge doesn't turn into a generic greeter? Will they be able to find enough Apple-centric extroverts to fill the positions? Will it serve to improve customers' experiences in the store? And if it does work, how long until other retailers follow suit? We'll just have to wait and see.

Is That Customer Really Satisfied?

Since most retailers focus more on selling products and stocking shelves than on delighting their customers, they more often than not miss the fact that they have an unhappy customer.

Most unhappy customers don't bother to complain; they just leave the store and never come back. Meanwhile, store management and staff chugs along believing they are giving good customer experience when the opposite is true.

A study by Forrester Research's Marketing found that while 80% of companies reported providing a superior customer experience, only 8% of consumers who were asked the same question said they had received a superior experience. This is another example of the experience gap.

Another study, this one conducted by M/A/R/C Research and National In-Store, found over 16% of consumers said they would stop visiting a store all together as a result of a bad customer experience. Over 95% of consumers indicate sales associates are very/somewhat important, with two-thirds indicating they are very important.

When retailers focus on creating memorable experiences they're less likely to create unhappy customers but on those occasions they do fall short they're more likely to know it, even when the customer doesn't tell them outright.

These are just a few of the ways your staff can tell a customer is unhappy without the customer actually saying it.

1. They state their complaint in the form of a question. I was out to dinner with my children last week and it took an hour for us to be served in a restaurant that should have served us in 20 minutes at the most. When the waitress arrived with our food I asked, "So does it normally take an hour to be served here?" Without missing a beat she said, "Nope. We just had a few big parties place their order before yours" and off she went. It's clear she didn't hear my question as a comment or complaint. My ten-year old did, though. Her comment: "Boy, dad. She's clueless." Yes, Kate, she was. And unfortunately she's not alone.

2. They abruptly stop shopping and leave the store. This can happen for numerous reasons, but it's often the result of an unhappy or frustrated customer. I remember once a customer stormed out of the store and I said to the store manager, "Wonder what's wrong with her." He looked at me and said, "Well, I don't know, go find out." It had never occurred to me to go after a customer and ask if there was a problem. Sure enough, when I found her outside the store she was upset with one of the associates. I invited her back into the store and saved a $500 sale.

3. You overhear one customer telling another customer that they're not happy. If the customer said it loudly then you can easily walk up to him/her and offer to solve the problem. If it wasn't said in a "carrying" voice you may have to take a different tack since you don't want to appear to be eavesdropping. Either way, this one's a gift. . . and it's not polite to refuse a gift.

4. The "I changed my mind" product return. A lot of customers do simply change their mind about a purchase but that still doesn't mean they aren't disappointed or unhappy about it. There may be days you find this hard to believe, but most customers won't complain about a return. By politely asking one or two follow-up questions to the "changed my mind" comment you're likely to uncover either the real reason for the return, or at the very least how the customer really feels about the product.

Dealing with an unhappy customer is never the most pleasant part of our job but it sure beats losing a customer and their future purchases.

Steve Jobs' $100 "Apple-ogy"

As you probably know, Apple CEO Steve Jobs recently announced that the popular iPhone would experience a $200 price drop. While this news brought a collective cheer from many of those yet to purchase an iPhone, many of the early adopters who paid the original $600 for their iPhones hit the web voicing their frustration at seemingly being taken advantage of. A day after the price cut was announced, Mr. Jobs posted an open letter on the Apple website apologizing to the loyal customers, and stating that existing iPhone owners could qualify for a $100 Apple Store credit, on the condition they had paid full retail for their iPhone. Apart from being such a quick response to public outcry, what made this letter unique was its final paragraph:

We want to do the right thing for our valued iPhone customers. We apologize for disappointing some of you, and we are doing our best to live up to your high expectations of Apple.

That’s right. Steve Jobs apologized. Apple could easily have issued a press statement informing current customers of the $100 credit, but Apple knows its loyal customers (the bulk of iPhone’s early buyers) see Steve Jobs as the face and soul of Apple. They listen to him and trust him. His name on an apology speaks volumes to how the public perceives the integrity and values of the Apple brand.

It can be argued that a $100 store credit is simply a way for Apple to get customers into their stores, and a few have gone so far as to claim this was Apple’s marketing plan all along. Regardless of motive, Apple has made a positive step toward rectifying a mistake, and its CEO has taken ownership of that mistake. This is an unusual move in today’s business climate, especially in retail. Retailers might have a contingency plan for service recovery, but faceless marketing and indifferent front-line clerks typically execute it. For a top executive of Mr. Jobs’ persona and charisma to step up and take responsibility is virtually unheard of.

Some of you might recall that shortly after Steve Jobs returned to the company in the late 1990s, Apple launched a grammatically questionable advertising campaign encouraging potential customers to “Think Different”. It’s nearly ten years on, and while that slogan isn’t used externally anymore, it’s nice to see that it’s still a basis for Apple’s customer experience.

Alfred H. Peet 1920 - 2007

There are many ways a retailer or service provider can define success in their business: financial growth and independence, loyal and happy customers, loyal and happy employees, respect from the community, reverence within their industry.  It’s rare that an individual achieves all these things.  Alfred H. Peet was one such individual. 

Long before Seattle assumed the title of coffee capital of the world, Alfred Peet started roasting, grinding, and brewing coffee in a small shop in Berkeley, California. Mr. Peet grew up in the family's coffee and tea business in Alkmaar, Holland. After World War II, he worked in the Indonesian tea trade. At age thirty-five, he moved to the San Francisco Bay Area and opened his shop in 1966, roasting coffee in the distinctive style he learned from his family.

Throughout the 1970s and 1980s, Peet's Coffee & Tea was a pioneer among other food purveyors in Berkeley's "gourmet ghetto".  Today, Peet’s continues to maintain the traditional values that are essential to creating coffees of distinction: hard work and attention to detail.   Berkeley is still home to Peet’s, but they now have shops throughout the country. In addition, Peet’s coffees and teas are available at peets.com, through mail order, specialty food and grocery stores, offices, fine restaurants and hotels.  Chances are, if you’re a coffee drinker, at some point you’ve sipped a cup of Peet’s.

On August 29, 2007, Alfred Peet passed away, leaving behind a legacy that many can only dream of.  The man’s impact on the lives of those he touched is evident from a unique memorial his employees have constructed.  On the website for Peet’s Coffee & Tea you’ll find a memorial blog where customers and employees alike have shared their thoughts and memories of what Alfred Peet and his vision and values mean to them.  As one reads the kind words that have been written – some of them very moving – it reminds us that true success shines from within us, and is reflected back by the people we serve.