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Empowerment  - Shaping Customer Perceptions

From time to time we write stories -  almost always favorable - about a particular retail organization that we do a lot of business with and one which we often use as an example in The Retail Management Workshop.

All of us, here at DMSRetail (a group of retail management consultants and retail training instructors) frequent this particular chain because we like them. Honestly, when this group can agree that we all like a particular retailer it means that retailer is pretty darned good.


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The reasons why we like them are as follows:

  • ·         They are always well stocked

  • ·         They offer a good range of products

  • ·         Staff are competent and friendly

  • ·         Good quality merchandise is well priced

  • ·         The store is clean and well maintained

  • ·         The store is well laid out

  • ·         The signage is clear

  • ·         The check out process is very efficient

  • ·         They deliver the service you expect; the service they promise

I can find more reasons, but I think you get the picture.

Just so you know, this chain requires that all of their customers become members – and all of their customers pay an annual membership fee. All purchases are easily tracked, on their systems, by membership number. Any employee with the appropriate level of authority may punch in the membership number and view all purchases made by that member. And there are different membership levels. The story I am about to tell you involves a member who pays annual fees at the highest membership level.

This story is about an incident that knocked them off the pedestal, so to speak. I am very disappointed about that but, nevertheless, I have to tell you about this recent incident to serve as a reminder for you to check and make sure the people in your organization are not letting you down.

Also, in all of our Success Guides we talk about the fact that every interaction between the retailer and the customer is shaping the customers’ perception of the business, so it only makes sense for us to point this out. While this chain still has much weight on the positive side, this particular incident revealed something very interesting about their culture – something we do not like.

On with the story, one of our consultants purchases many, many pieces of electronic equipment, computers, printers and monitors, etc. from this retailer. Any authorized person at the store could easily find out that information, as mentioned above. Anyway, one day, when the consultant noticed that there had been a significant price reduction on something purchased very recently, he approached the Customer Service desk to inquire about a price adjustment.

The retailer does have a very favorable, customer friendly price adjustment and refund policy.

This is another one of the reasons we rank them so highly. The price adjustment policy is only valid as long as there is stock of the item on the sales floor and, in this particular case there was not a lot of stock left on the sales floor.

One other detail - the consultant did not have the receipt with him at the time. Uh, oh. That, right there, means he is in for a fight. So, here’s what happened….

The associate advised him that she could not give him the adjustment because the system takes 24 hours to update and if he had gone to other locations asking for the same price adjustment then he may just get that money back too many times. No, no, no - the original receipt absolutely must be presented.

The policy is absolutely clear and there is absolutely no way to make an exception. No way, nothing, absolutely!

Well, I guess one could say that’s fair enough. Retailers do need to protect themselves against abuses and producing the receipt is really not such a big deal for the customer. It’s a pretty reasonable expectation that a customer should produce a receipt. Not that we agree it is always absolutely necessary, with no room for exceptions, but we do find it reasonable.

But let’s look at what went wrong and how it could have gone so much better. In fact, it could have gone so much better that this story may have been written in praise.

Big Mistake Number One:  The associate should not have quoted the policy in order to explain the situation. No customer ever wants to hear that they cannot have what they want because a nameless, faceless policy says so. Associates who hide behind the dreaded policy quote clearly do not have the resources or training to use some other method. Time and time again, in our Success Guides and Training Sessions, we stress that associates should not quote company policy. It doesn’t help and usually makes a bad situation worse.

Big Mistake Number Two:  The associate might as well have been saying “You are probably lying. We cannot possibly trust you and you are probably one of those people who will try to get more money from us than you deserve.”

There was just no need for any of this. Instead of repeating no, no, no and listing all the reasons why nothing could be done, the associate should have immediately looked at the purchase history and seen that this customer spends over $1,000.00 monthly in that particular store.  Armed with the knowledge that this customer was not an average customer and, in fact, represented huge lifetime value to the organization (something we always speak about in our Success Guides and Training Sessions), the associate could have proceeded to do something ‘special’ or just a little ‘different’. It would have taken very little ingenuity to come up with a plan for this customer while still working (unbeknownst to the customer) within the rules or policy.

Here is just one very straight forward example…..

“Mr. So and So, I see that you are a very good customer of ours and it is certainly not my intention to inconvenience you. I’ll make a note and take care of this for you myself.  I can go ahead and process your price adjustment for you in just 24 hours from now, when our system has been updated.

You can either pick up your store credit the next time you are in the store or I can mail it to you. Which would you prefer, Mr. So and So?”

What a perceived difference in outcomes. In this example, there was absolutely no risk to the store. If, in fact, Mr. So and So had been on a mission to go to several other stores to get a price adjustment that would have shown up on their system in 24 hours and then the story would have had a different ending anyway.

Here is what we learned from this short interaction with the associate:

1) The store/chain does not have a culture of empowerment and/or

2) This associate was not properly trained.

Either way, it’s not good. Empower your people and teach them what to do with it.

DMSRetail’s Super Retail Success Bundle is made up of 9 excellent Success Guides and Tools that address all of these issues, and more. You can get your copy here: http://www.dmsretail.com/superbundle.htm

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