Retail Contrarian

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.

Maybe The Customer Isn't Always Right

I'm sure you've heard the old saying "the customer is always right."  I remember hearing it in the training at my first retail job many moons ago.  I vividly remember thinking "that's impossible, not every customer can be right."  But I didn't dare say anything lest I be picked up by my brand new blue Turnstyle vest and shown the door.

Thirty-odd years later I'm ready to say it out loud: the customer is NOT always right.  But just because they're not right doesn't mean they're wrong.  More often than not the customer is mistaken.  And they're mistaken because they don't have the information or experience that someone like you has.  Let me show you two examples of a customer who is mistaken and what you can do about it.

A customer walks in with a competitor's advertisement for a product that you don't sell and tells you, "I need one of these."  If you assume the customer is always right then you will tell the customer you don't carry the product and send them on to your competitor. But if you believe that customers are not always right but are occasionally mistaken you will say, "That's a fine product but we carry some others that may fit your needs even better.  Let me ask you a few questions."

By exploring the customer's needs you'll discover which products you do sell that will best meets her needs.  It could turn out to be the one in the competitor's advertisement but you won't know unless you make the effort to learn more from the customer.  You're actually doing your customers a service by not assuming that they're always right.

Here's another example.  When a customer says "That's more than I wanted to pay," is he correct?  If you assume he is you will take him at his word and show him a less expensive product.  Which is a shame since you will be doing him a disservice if he is mistaken.  It may be more than he thought he wanted to pay but he might be willing to pay it - or perhaps more - if you tell him why it's worth the price.

If you've done a proper job interviewing your customer and learning his needs you should be able to explain why the product he is considering is still an excellent value even though it's more than he originally planned to pay.  If the customer still says that it's more than he wants to pay, then he was correct and you can show him a different product.  No harm, no foul.  The best part is that if the customer was mistaken he'll end up with a better product that meets his needs and you'll end up with a bigger sale.

So let me ask, do you take the time to discover if your customer is correct or perhaps mistaken?  If you don't, you're not doing your job and you're missing sales

Share with us some of other ways your customers are mistaken

The Core of Apple's Retail Success

Much has been written about the Apple Store experience and what can be learned from its successful retail execution.  From my perspective, what makes the Apple Store strategy work is that it only makes one assumption of its customers: they’re going to buy something in the store, and it will most likely be an Apple product, service, or philosophy.  Unlike the myriad retailers who label or “bucket-ize” potential customers, Apple’s approach seems to treat everyone as a blank slate.

Understanding that anyone can use, enjoy, and appreciate something they sell, Mac Specialists (as Apple’s front-line sales talent are known) are trained to take on individual clients, as opposed to moving among multiple customers.  This allows the Specialist to delve into the customer’s needs, build a comfortable rapport, and recommend a well-tailored solution of product and/or service.

It’s an uncomplicated and effective approach.  It doesn’t absolve the Specialist from the responsibility of selling, and it focuses their attention on the customer.  It encourages them to develop strong listening skills, and increase their knowledge of the store’s products, services, policies, and processes. It’s uncommon for a retailer’s sales approach to successfully serve both the customer experience and the employee’s professional development.  Most retailers have to choose one or the other, and the one not chosen usually suffers.  It’s nice to see Apple has made it work.

Ahoy, Retailers! – Permission to Welcome Your Customer

One of the most profitable words in retail is “Welcome.”  One of the most underused tools in retail is welcoming the customer.

The first 60 seconds in your store sets the stage for your customer’s overall experience. By welcoming the customers you demonstrate your appreciation for them and that they are your highest priority.

Skip the tired lines overused by every other retailer.  Stay far away from phrases like, “How’s it going?” or “How are you today?” or above all, “May I help you?”  The next time a retail salesperson asks me that, I just might give into my long-suppressed impulse and reply that I have a scratch VERY low on my back that I can’t reach and I’m wondering if he could scratch it for me.

Yesterday we took my mother, who is visiting from Illinois, to Rockport, Massachusetts. Rockport is a picturesque New England coastal town with a wonderful and unique shopping area. We visited many stores and got a couple of “hellos” but in one store we got a welcome that truly stood out.

My daughter Kate had visited a seashell shop in Rockport with friends earlier in the summer and was excited to take us there.  On entering Capt Steve's Seashell Shop Captain Steve himself said, “Welcome aboard!”  Now that’s a welcome. It was warm, friendly, and set the tone for the rest of the visit in his seashell shop. Even better, when Captain Steve heard Kate explaining the store to us he added, “And welcome back to you.”

Two simple words, welcome aboard……two words that defined our best retail experience in Rockport. Thanks, Captain Steve, for the wonderful welcome and for serving as an example of how two words can differentiate your store.

Learning From A Bad Stop & Shop Experience

It's easy to spot companies who are and are not customer-centric, especially when you're the customer. The other day I was at the deli counter at my local Stop & Shop when the employee who was helping me was asked by another employee to come down to the other end of the department.  My guy pointed to me and said, "In a minute."  The other guy insisted he come immediately.  Even though my guy was gone probably less than a minute, it really annoyed me.  When my guy returned I asked what his co-worker had wanted. He replied, "To tell me he was going on break."  How rude and self-serving is that? 

After I got my order I went off in search of the manager on duty to complain and who do I run in to but Mr. "My Break is More Important than the Customer."  As I was telling the manger how I felt Mr. Break stood right there saying it wasn't a big deal.  And he's right.  Taking 60 seconds away from my order isn't a big deal.  Interrupting an employee who is waiting on a customer so you can go on break is a HUGE deal. 

Compare that to Whole Foods, whose counter employees always give me their undivided attention.  You're either customer-centric or not.  It's not what we say in meetings or trainings that determine if we're customer-centric or not, it's what our employees do that determines it. 

It's important that your employees know:

1. The customer always comes first.
2. An employee who is with a customer should only be interrupted in case of an emergency.
3. Never carry on a conversation with a colleague who is helping a customer.
4. When in doubt, re-read rule number one.

It is vital that you be aware of how well your team does or does not in this area because trust me, your customers know.

Going Beyond Customer Service

Almost all customer service training includes the same instructions for dealing with unhappy customers. These steps usually include the importance of listening without interruption and the need to empathize, validate, apologize, take responsibility, and agree on a solution. I hope you do all of these - with a smile - when working with dissatisfied customers.

I got to thinking about why some stores are so much better than others at turning unhappy customers into happy loyal customers. Two different stores that seem to be following the same steps often show very different results. I've even seen different results in the same store with different sales associates who have been through the same exact customer service training.

I've come to understand that the best retailers and retail associates add an additional step that helps turn a negative experience into a positive one. Sometimes I'm not sure the people who do this even realize what they're doing; it just comes naturally. The extra step is easing the inconvenience. It's an important part of the solution but it's a step that most people overlook.

For years when I worked in a store I didn't always understand why customers were still mad after I agreed to fix their problem. "Sure I'll swap out that massage chair, sir. All I need you to do is box it back up in the original packaging and bring it back to the store." Why did my unhappy customer remain unhappy? I had listened, empathized, apologized, taken responsibility, and given him a solution! What's the big deal? Obviously the big deal was that I didn't ease the inconvenience. The problem remained a problem for the customer even when given a solution.

To successfully turn unhappy customers into happy loyal customers you need to assess what inconvenience the problem is causing the customer. Will the problem with the product cause the customer any inconvenience? Will the solution, or any part of the solution, cause the customer any inconvenience? Why would I not think that boxing up a defective chair and bringing it back to the store was asking a lot of a customer who was already not too happy about the situation? Obviously if I had asked myself those questions about my discontented massage chair customer I would have offered to swap the chair out in the customer's home.

Try to create a solution that will both WOW the customer and is fiscally responsible. If my car is the shop and the dealer offers to call me a cab, that's not much of a WOW. Giving me a ride somewhere is better, but the biggest WOW is to loan me a car since it does the most to ease the inconvenience. Of course offering me a loaner if I'm only getting my oil changed in my Yugo doesn't make financial sense regardless of how much it WOWs me.

Unfortunately many retailers now look at solutions that ease the inconvenience as a profit center, not the extremely important customer service and experience tool it is. Nothing is less productive than trying to squeeze money out of someone who is already unhappy. Not good. Retailers need to ask themselves if the short-term revenue is worth what the loss of a customer will cost in the long-run.

By the way, the best part about easing a customer's inconvenience is that it makes you a hero in the customer's eyes. And if you make "ease the inconvenience" a regular step in working with unhappy customers, you'll be a hero in mine as well.

This is from our weekly newsletter The Weekly Retail Experience.