Consumers Fed Up With Lack of Service
What does it take to get some service around here? That’s a question that many, if not most, consumers have asked in exasperation while in shopping situations.
A new research report from Yankelovich, Consumers in Control: Customer Service in the Age of Consumer Empowerment, shows clearly that exasperation is what many are feeling with the lack of service they get. Twenty-seven percent say they are even willing to pay if they can just get someone to meet their needs.
“Consumers have moved beyond frustration. It’s gone from a simmer to a boiling point,” Lexi Hutto, a senior consultant at Yankelovich, told AdAge.com.
“[Consumers] feel they deserve what they want and will look for it wherever they can find it. If they don’t find it at Company A, they’ll go to Company B or C,” she added.
The problem, according to the research, is that consumers find the same unsatisfying experience at one company after another.
According to the Yankelovich research, 62 percent of consumers believe that the service people they interact with “don’t care much” about their needs. This number is up 10 points in two years.
Other findings from the study included 66 percent saying that companies are more interested in selling them existing products rather than coming up with items that actually address their lifestyle needs. This figure was up from 58 percent in 2004.
Discussion Questions: If polls consistently say consumers will walk from stores with poor customer service, then why are so many still in business? Have consumers, despite their complaints, become acclimated to being treated badly or, perhaps worse, ignored by brands and retailers?
On the whole, I think that consumers have become used to poor service (maybe we can thank the major air carriers for some advanced “conditioning!”). Poor service doesn’t always make me walk out; however, great service keeps me walking in. Therefore, the goal remains to provide excellent, not just tolerable, service if retailers want to drive repeat visits.
In Nordstrom just a couple of weeks ago, I had another great experience. Bought a high-end watch thanks to highly-personalized service. The friend who accompanied me had a watch by the same maker with a broken crystal so the salesman replaced the entire watch for her (it was over a year old), then polished mine, set the date and time to the proper zone, ran through the warranties and functions with a smile and said how great it was to meet us. Just doing his job or above and beyond? Thanks to other retailers’ sub-par service, looking pretty amazing.
Presumably, when it pays off financially to differentiate via more people to provide service, someone will discover the niche and it will pay off. Meantime, long since frustrated by lack of service, stockouts, etc., I do more and more of my buying online. One thought: how about more in-store computers you can key into (Borders has these, although they’re a bit primitive) to learn about products, in-stock positions, location in the store.
Perhaps the perceived problem emanates from the conditioning of shoppers by retailers that focuses on price to the exclusion of other shopping variables, including service. Low prices have become the drug of choice of today’s retailers. In recent years, especially during holiday periods, retailers have attempted to beat their competition by offering deeply discounted merchandise with the underlying assumption that the reduced margins have to be made up somewhere in the operation. Typically, the savings come in the labor equation–size of staff, scheduling, training, etc.
Now that the “ante” is everyday low price for most retailers, the challenge will be to identify a point of differentiation as well as source of funding for this differential advantage. As I often say, “Anyone can give away product, it takes brains to sell it.”
While the word service almost always conjures up the same immediate idea to most people I think it is a good idea to look at how retailers lack critical service points.
ORGANIZATION – Internal organization is key if a retailer wants to assure their place in a competitive market. Start from the top of the company and exude a calm, organized experience at all levels.
COMMUNICATION – Many retailers have great ideas in their “think tanks.” Unfortunately, many retailers also leave the step-by-step processes necessary to implement great ideas floating around in said think tanks. Having a special promotion does no good if your final sales staff and customer have no knowledge/education about an event. Spell out the exact details of the event–drop the exclusions and only communicate the inclusions. (Macy’s Day-After Thanksgiving Coupons which were barely usable are a perfect example of what not to do).
PAYROLL – Where has your payroll gone? Way too much these days consumers see the customer service associates stocking, merchandising and cleaning. Sure – this is sometimes necessary (during slow times) but if it’s negatively impacting service… consumers are going to head for the door and they won’t be back. Kmart has the same bad checkout experience everywhere. How many experts have to tell you to correct the problem? (I’m happy to say that my last 5 visits to Kmart were SPECTACULAR because checkout was efficient) Years ago stocking and merchandising in department stores was done overnight. Out of sight…out of mind…consumers didn’t know what interruptions they were missing and the customer service associates were then able to actually service guests.
PATIENCE – Implementing a new idea won’t prove immediate success overnight. Expecting quick results when remedying a bad practice/situation can sometimes take time. Better get started soon….
The old saying is as sales go you have a choice of price, quality, and service. You can pick any of the two that you want.
Those willing to pay the price, get the service.
All of the above panelists have made some great points; retailers need to continually ask themselves a couple of questions.
1. Can we do this job differently or can we do it without hiring another person? Many times the consumer will choose to do the job themselves because it gives them better service. Other time they are frustrated and walk away or visit that store or merchant less.
2. Yes, people continue to shop at stores but if you increase the quality of the service will the customer buy more. I know stores are losing sales because of the lack of sales help or the quality of salesperson. In the case of a C-store client, when the right person was behind the counter for a number of months, inside sales would increase better than 15%. When that person left or was moved to a different store, sales went down by about the same number.
What would and should retailers pay to sell more to their present customers?
The first comment is correct. Most customers have champagne tastes with beer pocketbooks. Unless you’re lucky to have a business in a high income area, price is all that matters which makes it virtually impossible to please the finicky consumer.
As an independent, we give much better service, along with low prices, but it doesn’t matter to most, because the big box stores are dominating sales. Value added premium products just do not sell, and it may take a year to sell a niche item the big stores don’t bother carrying.
This is not whining, its the truth from New York to LA, because as gas prices and home mortgages pinch the pocketbooks of the average American–forget about great service. If you’re willing to shell it out, there are a few upscale companies willing to let you part with your money, but in a “price” marketplace, I’ve pretty much given up expecting extraordinary service, unless I’m in Las Vegas on vacation.
The fact that consumers still need stuff is what keeps retailers in business. The ones that truly beat estimates and have double digit increases every year are the ones that provide outstanding service to their clientèle. Eventually, retailers who don’t provide service end up in trouble and some big names come to mind instantly.
Retailers who understand that customer service is important make sure that their front line staff are fully trained and on board. I’ve said this in many articles and interviews: “Customers are not a roadblock, they are the keys to success for any retailer.” Any chain that does not take customer service seriously (and some have) will endure the wrath of the consumer eventually. With the amount of competition, there is should be no reason that any customer should receive bad customer service.
Why is there bad customer service? The reasons and causes are numerous and can start from the top chain of command and work it’s way down to the person stocking the shelves. It’s all about culture and attitude.
Retailers, manufacturers, and consumers have conspired to create the appalling situation in retail customer service.
Here are contributions of each group.
Retailers.
1. Most stores, especially those with desirable locations, struggle to staff their stores with motivated employees.
2. Most retailers have not made the effort to demonstrate to young workers that retailing is a good career path.
3. Most retailers are challenged to keep the supply chain flowing and the systems up and running. That’s where their people are focused.
4. Most retailers don’t train their workers in basic customer service skills.
5. Most retailers have not motivated their shoppers to provide them with information about their preferences.
Shoppers
1. Shoppers want the lowest price possible. The retailers have responded with pervasive self service. Most stores are not designed to provide one to one personal selling.
2. Most shoppers shop at the most busy times. This exacerbates the service situation.
3. Most shoppers have little patience for retail mistakes. This fosters an atmosphere of mistrust and disloyalty.
Manufacturers
1. Most manufacturers don’t provide the necessary product information and training to store level people.
2. Most manufacturers are working to accelerate product life cycles. This compounds the learning problem.
The retail industry has been working feverishly to sort out its labor, technology, and supply chain issues to create a better shopping experience. We see successes everywhere. But for the most part, as the survey shows, consumers are disappointed. That’s why online sales keep increasing at double digits while conventional retail is flat.
Yes, shoppers want service. Some are willing to pay for it, but many aren’t. And the ones who are willing to pay might not be aware of just how much the service they’d like would actually cost. The best example: airlines. Most planes have very few first class seats. That seems to prove that 90% of the passengers won’t pay first class fares. Some planes are getting “economy plus” seats and some have business class. But the overwhelming majority of seats are the cheapest, most uncomfortable, with no food, blankets, pillows, etc. Retailers, like airlines, haven’t got the margins to afford first class service for coach prices.
So many stores with poor service are still in business because there are so many stores with poor service! But, as I’ve discussed before on RetailWire, a lot depends on the definition of “service” for any given store. It does not mean the same thing at Nordstrom, at Kohl’s or at Wal-Mart.
“Service” is one of those intangibles like store layout and signing that needs to be aligned strategically with the rest of a store’s brand positioning. A store with higher-end apparel, more visible expense on store fixtures and a generally non-promotional posture had better make sure that its staffing and training are aligned with the rest of its mission.
On the other hand, “service” in a middle-tier or mass retailer like JCPenney or Target could mean something completely different. For example: Does the store layout and signing make it easy to navigate? Is the checkout process efficient and convenient? Are other payroll hours being spent on replenishment so customers can find what they want? There’s more than one way to define “service,” and for many retailers these are the benchmarks they need to focus on.
It’s all too evident in some chains that not only does senior management think the front-line staff are monkeys–they think the customers are too.
At one company where I spent several years, the story became legend that, in the middle of a meeting about CUSTOMER SERVICE training at an amusement-park client, the president of the division referred to those customers as “butts through the turnstile.”
I can’t say who it was, but I’m relieved to report that the culprit was NOT the happiest place on earth.
Today’s shoppers not only don’t have the time they need to complete the tasks they have, but they also don’t have the time to make the complaints necessary to to correct the many offenses they encounter. It’s easier to go somewhere else annoyed and forget it.
Conversely, yes they are numb to bad service. After all, they’re bombarded by terror threats, bad news and doomsday predictions all the time. Today’s consumers are very much in sensory overload. Here too, it’s easier to shut off. We are over tired, over worked and over stretched because the American philosophy dictates more better faster. We have become so much involved in our human “doings,” we have forgotten that we are supposed to be human “Beings.”
When society feels the need for a change, so too will consumers. Until then, Happy Holiday’s!
For me, working in retail has become more and more crazy-making, even though (because?) I’ve got a coveted personal shopper position for a major retailer. For one thing, over time I’ve seen a big increase in the number of customers trying to pull credit card fraud, to return stolen and/or worn goods, to pass counterfeit bills, and to take advantage of just about any situation with a big smile because they know we’ll give in to whatever they want. It’s very disheartening and difficult to be tasked with providing the best service possible as you gracefully wait for the police to arrive–warmth, generosity of spirit and suspicion are an uneasy mix! I think it’s difficult to engage and retain many retail employees because they have self-preservation instincts. One has to continually cultivate a love of humanity and a wicked sense of humor to carry on in this business unscathed.
It always amazes me why stores spend so little time taking care of the customers that are already in their stores, yet spend millions of dollars trying to attract new shoppers!
Today I was in a Dick’s Sporting Goods Store that was very busy; when I approached the register, there was a long line with customers complaining. One looked at me and said, “obviously they didn’t know it is the Christmas season.” I went and found the manager and asked him if he knew he had only one register open, his response was “yes.” Incredible.
Customers always appreciate fast, friendly checkouts. Maybe we have become complacent or don’t know what customer service is anymore.
Customer service means many things to many people. It is surprising how many retailers receive countless complaints yet remain in business. And others, such as Nordstrom–long credited for service par excellence–don’t seem to grow significantly.
I believe that customers have lowered their expectations. And, the “do-it-yourself” phenomenon has extended to the retail experience where service is an unexpected extra if it occurs. For the most part, consumers have become willing (and able) to hunt and find their own product selections.
Rome wasn’t built in a day so it follows that it will take years for a poor retailer to go out of business. (Will the GAP just die already?) But with the growth of Internet shopping (with web sites that even provide real-time chat capabilities with a service representative to answer online shoppers’ questions), many bricks and mortar retailers are going to have to increase service to prove to shoppers that they are more than just distributors like Amazon (or Wal-Mart), or risk losing more sales. And in some parts of the country like Chicago, diminished service and quality will get you absolutely nowhere. And no, I am not just talking about Macy’s. I am talking about our “hometown” retailer Sears too.
The sheer number of retailers within in any category could be a benefit when it comes to the question posed–perhaps there’s a phenomenon of spreading the wealth of bad service. However, this is the very reason retailers should be doing everything possible to improve their experience; with the proliferation of stores, as well as the fact that it typically doesn’t bode well for the bottom line, it’s nearly impossible for retailers to compete on price or product quality…or selection.
Instead, customer experience is THE best competitive advantage for retailers. Sure, having difficulty finding a good experience at any store may create shopper inertia, but it won’t hold a good customer forever and it certainly won’t create the holy grail for retailers–a truly loyal customer.
As the shear size and scale of many retailers has grown, and their business models have become increasingly predicated on high volume and low margins, their people have evolved from representing a distinctive competitive advantage into an expense line to be reduced and controlled. Regardless of the strategic positioning of any given retailer, customer service continually fails to meet even minimal consumer expectations.
This represents a critical competitive advantage for smaller, independent and emerging retailers, for great customer service begins with great employees and great employee relations. Experienced, empowered, knowledgeable and motivated employees can be the driver in attracting higher-end, loyal customers, and creating meaningful differentiation from larger, well-established competition.
Richard makes a good point about good service being different depending on the retailer. But if you are looking for good old fashioned customer service, I do know where to find it.
It’s on Main Street USA…
– Yes, it does cost more there because these are mom and pop retailers who do not have the buying power of the big box stores.
– Yes, there selection is sometimes more limited, but then again, sometimes within a given category it is a better selection because they go out of their way to find unique items that you don’t find in the big box. If they don’t have it, they likely will personally try and get it for you.
– No, there won’t be a liberal return policy, but if you have a problem with something they will probably work it out with you.
On the plus side…
They probably know your name if you stop in once every month or two and when they are on a buying trip they might pick up an item just because they think you or one of your neighbors might like it.
They may give you a call when something comes in that you might be interested in.
Retail, as most things, is very cyclical. Things tend to get balanced out in the end. I don’t think that Main Street is going to take down Wal-Mart, but it sure may put a small ding in its top line growth.
Low unemployment and high turnover rates combined with a lack of staff training is going to result in low motivation and product/brand knowledge with store staff and customer dissatisfaction. Amazing, isn’t it? With customer service being tantamount to a clean well merchandised retail environment, most retailers do not take advantage of training and motivational techniques.
Certainly not a silver bullet but many retailers are using in-store digital signage as a staff-facing communications vehicle either off-hours or staff-only areas such as the lunch room. This allows for inexpensive and highly effective ways for HQ to deliver messages such as: “Monthly Message from the CEO,” the Message of the Day, training programs where the store manager gathers staff around the screen and facilitate a training session, or sponsored product content from suppliers. By the way, on the last point, suppliers will pay for that airtime which can off-set the cost of these programs.
Also, retention of good employees is important as well. Some retailers are running “success profiles” on employees that have chosen to make the company their career and the advancement and fulfillment they are achieving. That combined with HR communications about benefits, tuition reimbursement, etc, can be a powerful but often under utilized tool in development a retailer’s second most value asset: their employees–since it is them that watch over their first most valuable asset: shoppers.
Customer service is the riskiest area to try and make more efficient with technology. More so than any other aspect of retail, it’s the touch-intensive, hand-holding part of the customer interaction. It’s the place where a friendly face or voice truly listens to the customer’s issue and tries to make it right.
Sometimes, that’s helping find the appropriate product, but it’s more often fixing some kind of problem. Technology can help, but retailers are far too quick to jump to outsourcing or software to reduce their customer service cost. That only works if the customer feels they are getting taken care of as well. The vast majority of times, they feel the opposite.
Customer service isn’t designed to be a profit center. It’s a well to keep customers happy so they’ll buy more from you. Far too often, that message gets lost.
This is a great topic that has been addressed wonderfully by the experts on this panel. The bottom line is store-level execution. Every mid- to large-sized chain will tell you that they have wonderful training in place, and I’m sure they do. But the best plans at the corporate level still have to be executed by employees on the front lines making them the weakest link. One bad employee can alienate an entire group of customers and leave them with a bad impression of an entire chain. Those are some very high stakes. Small chains and mom-and-pops have been able to exploit this in the big-box era by focusing on customized service and retaining knowledgeable, attentive employees. It sounds so simple, yet it is so hard to do. But, in the end, customers have shown a propensity to reward alacrity.