Steps the retail industry should take to improve the quality of customer service.
During a session at a recent retailing convention, a speaker was asked the following question: "You have criticized the level of customer service currently available; do you feel anyone is doing a good job of providing customer service?"
The answer to this question has been rather predictable during the last year or so. Nordstrom, a Seattle-based specialty department store, has captured the attention of the industry as retailers look for ways to regain market share and build sales.
The current fascination with Nordstrom is perplexing. Consultants talk about the culture at Nordstrom in much the same way management theorists discuss the culture of the Japanese factory. Speakers relate anecdotes about Nordstrom's service to illustrate how far the company goes to please the customer.
The fact is that most of the nation's leading department and specialty stores really do understand customer service. U.S. department stores can trace their beginnings to an era when customer service was king. "The Customer Is Always Right" is not a catch phrase coined by a modern marketing strategist but a business philosophy that originated with entrepreneurs like James Cash Penney.
The first Penney store opened in Kemmerer, Wyo. in 1902 and was called "The Golden Rule," because Penney believed business should live up to the Golden Rule philosophy. It would be hard to find a retail executive who does not feel that customer service is important. So why is the hottest topic in boardrooms how to offer a higher level of customer service? More important, why do companies that understand the concept of customer service not deliver where it counts--on the selling floor?
The level of customer service provided by retail stores today
is actually the result of forces that have evolved over a period of
years. The so-called carriage-trade department stores, locally owned and
operated by some of this country's finest entrepreneurs, understood
customer service and provided it so well they inspired intense customer
loyalty. One by one these entrepreneurial stores have been replaced by
impersonal corporate entities, and customer-oriented policies and
procedures have eroded in favor of tight expense control, a fixation on
bottom-line profitability, short-term growth and unrestrained expansion.
The department store of the '70s was quite different from the family-owned business it replaced, but there was still enough management expertise carrying over from the halcyon days to maintain some of the vestiges of good service. Also, there was relative stability in ownership, even though it was more impersonal and removed from day-to-day operations than previously. But the 1980s ushered in an era of merger, acquisition and geographic expansion, which has hardly been healthy for the industry and disastrous for customer service.
The character and personality of an organization reflects the character and personality of its top management. In the case of customer service, there are some real advantages to achieving consistency and continuity in management. Customer-service policies that change with every change in management or ownership are confusing to employees and customers alike. Not only have we observed frequent policy changes that affect customer service but these changes are often made for the wrong reasons. For example: * A new company must generate cash to retire debt resulting from a leveraged buyout. * An operations executive is told to slash expenses to improve profitability prior to a proposed merger or acquisition by another company. * A key executive leaves as a result of ownership change and the new manager feels compelled to remake the company in some other company's image. * Promising management trainees leave the industry because they get tired of being shuffled around as a company changes hands several times.
Unless retailers awaken to the damaging effects of structural change, an even further erosion in customer service will occur in the years to come. What can we do? Here are 18 steps to take:
1. Adopt the attitude that anything can changed. The better companies figure out a way to accomplish things that everyone says "can't be done." A department store vice president recently boasted of how customer-oriented his company was and provided several examples of how far the store would go to satisfy a customer. Yet 10 minutes later, a member of the audience said he couldn't find anywhere in the store to get change for a pay telephone because: "Sorry, we can't open the registers without a purchase."
2. Everyone contributes to the customer's perception of service. A complaint overheard recently described the treatment by the store's parking attendant. The customer stated that even the overworked "Have a nice day" would be a welcome change from the frowning, uncommunicative demeanor of the attendant. The store even used a flashing light to indicate the charge to make it easier for no interaction to take place. The customer left with a bad taste in her mouth, as she would have after getting a poor dessert at a restaurant.
3. Design ways to ensure some continuity in operations. Retailers should address the problems of consistency in policies and change longstanding policies only after carefully considering the consequences.
4. Define and customize criteria to be used in employee selection. At the same time, do not underestimate the importance of an outgoing personality and a passion for retailing. It's still a people business, with inherent stress and pressure that demands dedication.
5. Recognize the demands of family and leisure-time interests. Even in the best of companies, an employee in the 10th hour on the job is not going to be cheerful and helpful. When the store closes at 10 p.m. and opens against at 8:00 a.m. the next day, it is difficult to expect an employee to have a bubbling personality. Retailers have adopted ridiculous operating hours.
6. Managers should recognize that skills essential for managing people may be quite different from those associated with the buying function. Positions in store operations and buying have changed dramatically during the past 10 years. We now know a great deal about writing job descriptions and evaluating people in order to match skills with job, yet most companies still adhere to a career path that forces people to spend a specified time period in jobs they don|t like or that don|t challenge their creativity. Though this approach may have once been appropriate, it can hardly be justified today.
7. Professionalize the personnel function. In the late |70s, one Federated division always sent the vice president of personnel to conduct campus recruiting. His approach to the task was organized, professional and, when judged by the quality of students he hired each year, highly successful.
Ask yourself the following questions: Is your college recruiting handled by a professional or by an untrained interviewer pulled off the selling floor on a temporary basis? Does your personnel department participate in university-based internship programs, serve on college advisory boards, fund scholarships in marketing or merchandising, or provide speakers for college courses in retail management? Does your personnel department cultivate personal relationships with faculty at key institutions to solicit their help in identifying the best candidates? If the answer to most of the questions is no, you are ignoring an excellent source of management personnel.
8. Companies that abandon in-house training efforts get poor productivity, nonadherence to standards, inefficiency and confusion. One store manager remarked, "We practice OJT (on-the-job training) here--if the employees want structure, they should try another industry." Is this an enlightened philosophy that encourages independent thinking and personal creativity or something to hide behind, because no one has taken the time to write down what the company is about and then develop a training program that systematically passes this information along to successive generations of management? Remember, if you are dissatisfied with the performance of a subordinate, it often is because you have failed to give that person the information and instructions necessary to accomplish the task.
9. Shift emphasis in training programs from selling techniques to knowledge of merchandise. Suggestive selling techniques aimed at producing multiple-item sales will not work if the sales associate does not have the basic knowledge of the product to give credibility to suggestions. Which image is more attractive to the modern-day shopper? The overly gregarious, complimentary, artificial salesperson who can't answer the most basic questions about the product or the quiet, unassuming listener who is highly knowledgeable and can impart that knowledge without being patronizing?
10. Systematize employee actions that result in promotions or raises. We ask employees to give their best every hour of every day while implying good performance will lead to better compensation and a better position. Don't haphazardly schedule, casually evaluate and slowly act upon reviews with little recognition of the importance they hold for the employee.
11. Recognize that retailing is a people business from an employee, as well as customer, point of view. One manager noted that her supervisor produced "great figures" for the company yet had the highest buyer turnover of anyone in the company. Yet another related her boss's admonition that "you have to learn to cuss if you are going to deal with those New York vendors." If rude treatment of an employee carried the same penalty as rude treatment of a customer, we would all be better off.
12. Phase out the use of temporary, part-time employees commonly referred to as contingents, floaters or extras. Stores can never expect to provide knowledgeable customer service by continuing to hire associates, give them a half-day of training, then assign them to work four hours in cameras, followed by three hours in luggage with no prior exposure to either type of merchandise.
13. Hire an interior design firm experienced in office design
to create a comfortable office environment for first-line managers, even
if the location is in the stockroom. We know that top-level executives
feel better about themselves and their jobs if they have an
aesthetically pleasing place to hang their hat. Why do we feel the same
is not true of those in the trenches?
14. Expand training efforts to include development of middle and top management. Several universities have excellent management development programs dealing with specific topics, such as financial management, or comprehensive MBA courses that span several weeks over a year.
15. Teach managers at all levels the art of positive reinforcement. Have everyone in management read The One Minute Manager. Rule No. 2 applies here: "Help people reach their full potential; catch them doing something right."
16. Design and implement pay systems that reward productive sales associates. Commission pay schemes seem about to be rediscovered in spite of some very serious objections to their use. Companies should explore other alternatives to compensating sales associates and create ways to make incentive opportunities available to nonsales employees.
17. Design programs that develop an employee's "people skills." Retailers should be on the cutting edge of methods to improve individual interpersonal skills.
18. Recognize that there is no substitute for good people. This is true whether you are a multiple location, full-service department store or a mail order house. If good people are hard to find, then why do retailers spend so little time in the effort? Let's shift some of the copycat infatuation with marketing techniques to the personnel function. Attract good people, and innovative marketing techniques will follow.
Though there is some indication that the disruptive rash of mergers and acquisitions has abated, new threats to the future of traditional department stores are already beginning to take shape. Increased intertype competition from factory outlet stores, mail order, off-price outlets, specialty retailers and revamped general merchandise retailers will shrink the department store's market share.
No one ever said it would be easy. The key is finding ways to cope with change. The firms that do the best job of developing their human resources will survive because, fundamentally, it is people who formulate answers and implement strategies. Charles E. Cox, Ph.D., is associate professor of retail management at Washington State University in Pullman, Wash.
During a session at a recent retailing convention, a speaker was asked the following question: "You have criticized the level of customer service currently available; do you feel anyone is doing a good job of providing customer service?"
The answer to this question has been rather predictable during the last year or so. Nordstrom, a Seattle-based specialty department store, has captured the attention of the industry as retailers look for ways to regain market share and build sales.
The current fascination with Nordstrom is perplexing. Consultants talk about the culture at Nordstrom in much the same way management theorists discuss the culture of the Japanese factory. Speakers relate anecdotes about Nordstrom's service to illustrate how far the company goes to please the customer.
The fact is that most of the nation's leading department and specialty stores really do understand customer service. U.S. department stores can trace their beginnings to an era when customer service was king. "The Customer Is Always Right" is not a catch phrase coined by a modern marketing strategist but a business philosophy that originated with entrepreneurs like James Cash Penney.
The first Penney store opened in Kemmerer, Wyo. in 1902 and was called "The Golden Rule," because Penney believed business should live up to the Golden Rule philosophy. It would be hard to find a retail executive who does not feel that customer service is important. So why is the hottest topic in boardrooms how to offer a higher level of customer service? More important, why do companies that understand the concept of customer service not deliver where it counts--on the selling floor?
The department store of the '70s was quite different from the family-owned business it replaced, but there was still enough management expertise carrying over from the halcyon days to maintain some of the vestiges of good service. Also, there was relative stability in ownership, even though it was more impersonal and removed from day-to-day operations than previously. But the 1980s ushered in an era of merger, acquisition and geographic expansion, which has hardly been healthy for the industry and disastrous for customer service.
The character and personality of an organization reflects the character and personality of its top management. In the case of customer service, there are some real advantages to achieving consistency and continuity in management. Customer-service policies that change with every change in management or ownership are confusing to employees and customers alike. Not only have we observed frequent policy changes that affect customer service but these changes are often made for the wrong reasons. For example: * A new company must generate cash to retire debt resulting from a leveraged buyout. * An operations executive is told to slash expenses to improve profitability prior to a proposed merger or acquisition by another company. * A key executive leaves as a result of ownership change and the new manager feels compelled to remake the company in some other company's image. * Promising management trainees leave the industry because they get tired of being shuffled around as a company changes hands several times.
Unless retailers awaken to the damaging effects of structural change, an even further erosion in customer service will occur in the years to come. What can we do? Here are 18 steps to take:
1. Adopt the attitude that anything can changed. The better companies figure out a way to accomplish things that everyone says "can't be done." A department store vice president recently boasted of how customer-oriented his company was and provided several examples of how far the store would go to satisfy a customer. Yet 10 minutes later, a member of the audience said he couldn't find anywhere in the store to get change for a pay telephone because: "Sorry, we can't open the registers without a purchase."
2. Everyone contributes to the customer's perception of service. A complaint overheard recently described the treatment by the store's parking attendant. The customer stated that even the overworked "Have a nice day" would be a welcome change from the frowning, uncommunicative demeanor of the attendant. The store even used a flashing light to indicate the charge to make it easier for no interaction to take place. The customer left with a bad taste in her mouth, as she would have after getting a poor dessert at a restaurant.
3. Design ways to ensure some continuity in operations. Retailers should address the problems of consistency in policies and change longstanding policies only after carefully considering the consequences.
4. Define and customize criteria to be used in employee selection. At the same time, do not underestimate the importance of an outgoing personality and a passion for retailing. It's still a people business, with inherent stress and pressure that demands dedication.
5. Recognize the demands of family and leisure-time interests. Even in the best of companies, an employee in the 10th hour on the job is not going to be cheerful and helpful. When the store closes at 10 p.m. and opens against at 8:00 a.m. the next day, it is difficult to expect an employee to have a bubbling personality. Retailers have adopted ridiculous operating hours.
6. Managers should recognize that skills essential for managing people may be quite different from those associated with the buying function. Positions in store operations and buying have changed dramatically during the past 10 years. We now know a great deal about writing job descriptions and evaluating people in order to match skills with job, yet most companies still adhere to a career path that forces people to spend a specified time period in jobs they don|t like or that don|t challenge their creativity. Though this approach may have once been appropriate, it can hardly be justified today.
7. Professionalize the personnel function. In the late |70s, one Federated division always sent the vice president of personnel to conduct campus recruiting. His approach to the task was organized, professional and, when judged by the quality of students he hired each year, highly successful.
Ask yourself the following questions: Is your college recruiting handled by a professional or by an untrained interviewer pulled off the selling floor on a temporary basis? Does your personnel department participate in university-based internship programs, serve on college advisory boards, fund scholarships in marketing or merchandising, or provide speakers for college courses in retail management? Does your personnel department cultivate personal relationships with faculty at key institutions to solicit their help in identifying the best candidates? If the answer to most of the questions is no, you are ignoring an excellent source of management personnel.
8. Companies that abandon in-house training efforts get poor productivity, nonadherence to standards, inefficiency and confusion. One store manager remarked, "We practice OJT (on-the-job training) here--if the employees want structure, they should try another industry." Is this an enlightened philosophy that encourages independent thinking and personal creativity or something to hide behind, because no one has taken the time to write down what the company is about and then develop a training program that systematically passes this information along to successive generations of management? Remember, if you are dissatisfied with the performance of a subordinate, it often is because you have failed to give that person the information and instructions necessary to accomplish the task.
9. Shift emphasis in training programs from selling techniques to knowledge of merchandise. Suggestive selling techniques aimed at producing multiple-item sales will not work if the sales associate does not have the basic knowledge of the product to give credibility to suggestions. Which image is more attractive to the modern-day shopper? The overly gregarious, complimentary, artificial salesperson who can't answer the most basic questions about the product or the quiet, unassuming listener who is highly knowledgeable and can impart that knowledge without being patronizing?
10. Systematize employee actions that result in promotions or raises. We ask employees to give their best every hour of every day while implying good performance will lead to better compensation and a better position. Don't haphazardly schedule, casually evaluate and slowly act upon reviews with little recognition of the importance they hold for the employee.
11. Recognize that retailing is a people business from an employee, as well as customer, point of view. One manager noted that her supervisor produced "great figures" for the company yet had the highest buyer turnover of anyone in the company. Yet another related her boss's admonition that "you have to learn to cuss if you are going to deal with those New York vendors." If rude treatment of an employee carried the same penalty as rude treatment of a customer, we would all be better off.
12. Phase out the use of temporary, part-time employees commonly referred to as contingents, floaters or extras. Stores can never expect to provide knowledgeable customer service by continuing to hire associates, give them a half-day of training, then assign them to work four hours in cameras, followed by three hours in luggage with no prior exposure to either type of merchandise.
14. Expand training efforts to include development of middle and top management. Several universities have excellent management development programs dealing with specific topics, such as financial management, or comprehensive MBA courses that span several weeks over a year.
15. Teach managers at all levels the art of positive reinforcement. Have everyone in management read The One Minute Manager. Rule No. 2 applies here: "Help people reach their full potential; catch them doing something right."
16. Design and implement pay systems that reward productive sales associates. Commission pay schemes seem about to be rediscovered in spite of some very serious objections to their use. Companies should explore other alternatives to compensating sales associates and create ways to make incentive opportunities available to nonsales employees.
17. Design programs that develop an employee's "people skills." Retailers should be on the cutting edge of methods to improve individual interpersonal skills.
18. Recognize that there is no substitute for good people. This is true whether you are a multiple location, full-service department store or a mail order house. If good people are hard to find, then why do retailers spend so little time in the effort? Let's shift some of the copycat infatuation with marketing techniques to the personnel function. Attract good people, and innovative marketing techniques will follow.
Though there is some indication that the disruptive rash of mergers and acquisitions has abated, new threats to the future of traditional department stores are already beginning to take shape. Increased intertype competition from factory outlet stores, mail order, off-price outlets, specialty retailers and revamped general merchandise retailers will shrink the department store's market share.
No one ever said it would be easy. The key is finding ways to cope with change. The firms that do the best job of developing their human resources will survive because, fundamentally, it is people who formulate answers and implement strategies. Charles E. Cox, Ph.D., is associate professor of retail management at Washington State University in Pullman, Wash.
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