Retail TouchPoints: 3 Key Tenets for Retailers to Win the Customer Race
By John Gaffney
a special arrangement, presented here for discussion is an excerpt of a
current article from the Retail TouchPoints website.
As chairman and president
of automated feedback solution provider Mindshare, Rich Hanks simply wanted
to publish a book that contained usable information for executives struggling
with the practical applications of customer service and how that service
hits or misses with customers.
"Delivering and Measuring Customer Service" has hit its second
printing, and counts Stephen Covey, Harvard’s Clayton Christensen and CarMax
chairman Bill Tiefel among its fans, the former
EVP at Marriott is applying his simple approach to a complex set of economic
"Sometimes we want
to do the coolest stuff or try the latest marketing fad, but maybe we need
to stay with the basics right now," he said.
For retailers, he comes
back to three main customer strategy tenets that he firmly believes will
provide the best chance to compete and win.
The first is customer
retention. Regardless of the numbers consulting companies will apply to
this concept, such as Mr. McKinsey’s famous "customer acquisition
is ten times more expensive than retention," Mr. Hanks believes the
overarching importance of this argument involves loyalty. Even in the current
retail environment in which customers have most likely shopped outside
of their patterns to hit discounts, he stresses retention above all.
"Do everything in
your power to keep current customers," he said. "If retailers
are looking at spending money on TV for example to get new customers, I
would say you need to revisit that spending. Don’t be extreme about it,
but unless you’re a brand new company, that customers you have are going
to generate the stories and recommendations that become your best acquisition
His second principle
is the imperative of delivering customer service and measuring its effects.
Unless a retailer is at the low end of pricing (Walmart) it’s the only way to win. Surprisingly, Mr. Hanks
recommends a mix of qualitative and quantitative information to measure
customer satisfaction. The automated part of that data equation must be
accessible to everyone in the company, he said. The qualitative part can
be delivered by empathetic executives.
"At Marriott every
new hire worked in a hotel for two weeks," he said.
"Empathy means you have the ability to see something from the other
person’s perspective. It’s an essential skill."
Mr. Hanks’ third takeaway
is based on execution. Good strategy is fairly common when it comes to
customer service; good execution is not. The key is front line employees,
who make $10 per hour and are the face of your company, are the key to
that execution. "Hire friendly and teach the skills, as Bill Marriott
used to say," he said.
What do you think of Rich Hank’s three tenets for customer service? Of
the three – customer retention, measuring customer satisfaction and front-line
execution – which is most important during tougher economic times? If
different, which is most underemphasized?