What is the Significance of a Smile?
According to a new study, a smile and a friendly hello is the most common reason (59 percent) why consumers feel loyal towards small and independent retailers. However, the study found that only 54 percent of small and medium size enterprises (SME) businesses stated their business employed this practice.
The report, The Lost Art of Loyalty, from Barclays, in partnership with Kingston University Small Business Research Centre, examined the retail behavior of 2,006 U.K. consumers and the loyalty business practices of 1,216 decision makers in British SMEs.
Over a third (36 percent) of consumers said they were loyal to small and independent retailers due to "brilliant customer service" while 22 percent said they valued businesses remembering their usual order. Yet only around half (53 percent) of the SME respondents indicated they are remembering or recording customers’ previous orders.
The study concluded that independents aren’t taking advantage of their position to foster loyalty with shoppers.
"While the majority of decision makers recognize the importance of personal relations with customers, they are failing to develop their own customer loyalty strategies," said Kingston University Professor Robert Blackburn, in a statement. "SMEs are in a unique position to embrace these traditional values of loyalty and should consciously build on their natural competitive advantage of being a smaller business as this can make a real difference to business survival and growth."
Other findings:
- Less than a third of SME respondents listed retaining (19 percent) or growing (12 percent) their current customer base as their business’ main priority to achieve growth over the next 12 months;
- Only 50 percent SME respondents encourage word of mouth recommendations by regular customers;
- Sixty percent of consumers are willing to pay more for a similar product from a small independent retailer, compared to a cheaper product from a large, corporate retailer;
- Fifty-eight percent of consumers believe that small independent retailers are in a better or the same position to engender loyalty among their current customers than large, corporate brands.
This research comes as Barclays is launching a new Business Current Account with a loyalty reward, which reduces the bank charges of loyal customers.
Discussion Questions
Do smaller retailers have an advantage over larger chains when it comes to engendering loyalty with shoppers? What simple steps (such as a welcoming smile) should be a requirement for all retail associates without regard to the size of the business?
A smile is great and all retailers should train employees to be welcoming, courteous and helpful. But, in order for smaller businesses to capture loyalty from larger competitors, they need to employ more personal tactics. Smaller businesses have the hometown, local advantage and should use it to get to know customers on a more personal level (as appropriate). They also should look to partner with other local businesses, local government, schools and the community.
When business owners and employees are members of the community, they should promote that as a plus—and business owners and managers should try to encourage their employees to be good representatives of the business when they are not working.
In other breaking news, friendly sales people sell more than non-friendly sales people. While I certainly appreciate this study, and it made me smile, independent businesses that don’t realize that friendly, smiling staff are a key advantage they have over chains are either already out of business or going there fast. It’s a good reminder, though, that associates are the lifeblood of independents, and personalization is a good edge as well.
Independents have two distinct advantages over large chains in this regard. First, shoppers expect large chains to be less friendly and independents to be more so. Second, implementation is less complicated.
But, whether a large or small retailer, the clerk must have the right attitude to make this work. Phoniness and forced smiles are easy to spot. I view clerk attitude as the key indicator of how well a retailer is doing on all fronts.
Ultimately, this is common sense and civility—both of which are lost arts in many facets of our society. In any case, great user experience starts with human-to-human interaction, so before the interior design, traffic flow, digital signage, mobile app, etc. get all the focus, personal conduct needs real consideration.
People are going to be themselves no matter what training is offered, so for larger retailers, the HR process is a critical first step to attempt to get naturally gregarious people to fill customer facing roles. Smaller retailers where a manager or owner is on the floor with employees definitely has the advantage of observing and guiding employees that are less than cheerful, not personable, or not smiling.
Smaller local businesses have the ‘possibility’ of an advantage over larger chains but not because they’re smaller. It’s ALWAYS about the energy and it is much easier to align energy in a smaller place where the employees know each other’s names. It’s pretty hard to remember your customer’s ‘regular order’ when you don’t even know who your fellow employee is.
“…should be a requirement…” is a phrase that makes me groan in despair. Exactly how do you “require” a smile or caring attitude? Next thing you know there’ll be a “welcome smile” policy in the manual. I remember seeing exactly that, an official notice taped to the pillar next to the check out person that directed employees to “SMILE”—all in caps and of course signed by “The Management”—not even a manager’s name! Apparently they had to be ‘reminded’.
The power is not in the ‘behavior’—it’s in the ‘belief’.
It’s not about smiles. It’s about solving your customers’ problems better than anyone else. Certainly smiles are an added bonus but do not take the place of the failure to delight your customers. In order to delight the customer, two things need to happen: first, a pleasant, respectable interaction between the buyer and seller; second, an acceptable outcome or solution to the buyer’s request.
Having said this, smaller retailers should never lose the customer delight battle. No one should out-service/out-personalize the experience or out-local the customer. These are two advantages that the larger firms with their size tend to struggle.
Small can be better, but not by serendipity. Begin and end every interaction with a focus on the customer and develop systems and people to execute this customer focus and the little guys can win.
You wouldn’t expect an employee to dig a ditch when all they came to work with was a knife would you?
The issue isn’t what should be required by the employees—it is the lack of funding the retailer provides for training. The “soft skills” of building rapport have atrophied across the board for all generations and Millennial employees in particular.
You can’t expect employees to walk in the door with all the tools they need to make you successful. That’s why retail sales training is imperative. Requiring employees to do a job they are ill prepared for only leads to frustration for all concerned. Buy the shovel before you expect the ditch.
Smaller retailers definitely can empower themselves and their employees to engage with their customers on a more direct and personal level. This is not only a significant differentiator but also an advantage over larger chains which cannot implement and manage their large and geographically diversified employee base. Recognizing a consistent customer goes a long way to create a sense of community and belonging. Retailers should develop the same rapport as a local tavern has with its ‘regulars’. Trying to replicate the same sense of family as a local English pub has with its community would give a local retailer a major advantage.
Smaller retailers always have an edge if they can establish personal relationships with shoppers. Safeway, for instance, has had great luck in keeping the same clerks in the store for years. Everyone knows everyone. The company may be a huge and impersonal chain, but the local employees on the floor make all the difference.
“…sometimes it’s nice to go where everybody knows your name…”
You bet it is. Smaller retailers and restauranteurs (should) know this is the lifeblood of their business. It can’t make up for not having the selection of a superstore or the prices of a club if those things are relevant to the purchase occasion at hand. But in most other circumstances, going to the person I enjoy doing business with is the tie-breaker.
The cautions of “mother-in-law research” be damned, we each know from our personal and professional experiences that it feels good to be recognized and remembered. Small retailers can and should teach this as a skill.
It is not an innate reaction for every person employed in a small or medium sized establishment to react this way, even if the owner does. After learning which end of a grocery store the empty boxes go out of from Bob Ingle, I moved back to the local grocery store during the school year to get after school hours. Mr. Williams, the store’s owner, and his store manager started teaching us new baggers the customers’ names the day we started—and we were expected to remember! It wasn’t quite as bad as having to learn every brother’s full name, home town, model of car and girl friend’s name to pledge the fraternity, but it was close!
You can’t make people “personable” but you can teach them to remember. And you can teach them that it is important.
There is the implication is that a SME would have more active participation by its ownership in the day-to-day operations, including interacting with their customers. Assuming that’s true, then the employees have the opportunity to learn directly from the owner what constitutes good customer service.
I, like Ian, hate to hear that any retailer would require a smile. Customers are not dumb. They know when you are being genuine or not.
From an intangible POV, smaller retailers can have it all over larger ones. The recent comments by Sam Martin, CEO of A&P, about changing the company culture especially in the area of customer interaction shows how difficult it can be for a large retailer to reach all of their employees. Smaller retailers can control hiring and train for better customer interaction and appreciation much easier than a larger company. I am just surprised that more of them do not see this as a competitive advantage.
People like to do business with people they are friendly with and those who make them feel comfortable. Smaller businesses have an advantage because their employees seem to think it matters. I agree. Larger chains talk the talk but fail to walk the walk when it comes to training and employee expectations.
I am reminded of the Tom Hanks, Meg Ryan movie, “You’ve Got Mail.” Certainly the smaller bookstore, put out of business by the larger chain, had a more friendly and knowledgeable staff. Unfortunately, they lacked the volume and pizzazz of the larger chain.
I would like to take a slightly contrarian view here. It is NOT the smile that really matters at all. The smile is a Key Performance Indicator (but NOT the same as the goal or objective, which is to do one of the following: grow revenue, increase customer transaction size, improve loyalty, or similar pursuits.). The smile is a behavior that can be mandated, but is only a perceived contributor to someone providing better customer service, sales performance, or just plain “doing their job.”
We are focusing on forcing a mechanical action (smiling) as a proxy for doing what really counts: improved performance. The smile is CORRELATIONAL to the act of providing better customer service which in turn leads to higher loyalty (or at least that is the belief). The smile does not CAUSE the outcome—the set or collection of behaviors do.
Telling me with a smile that you are out of stock will not please me and lead me to consider other retail options. Telling me that not only are you in stock, but that you are offering a complementary product to better meet my needs in using the first item can be delivered smile-less—and be better appreciated and lead to more loyalty, higher transactions, etc. Smiling as you tell me of your “deal” and how you anticipated my needs from prior purchases as best (no denying that). However, I do not want to confuse causation with correlation or lose the need for the OBJECTIVE to be the focus, and not the KPI.
Totally agree with both Al and Ian.
First, is this news? Smiles beat surly?
Second, if you have to force people to smile you end up with … well … forced smiles … and nothing says “I really care about you” more than a phony smile.
These kinds of simplistic bromides are what make people feel good … as they slowly go out of business.
Small retailer or larger chain, the advantage to delivering a great customer service experience is the same. A “smile” or good service experience from big or small makes no difference to the customer. The way a customer is treated determines if the customer comes back—or not.
Initial engagement is what this topic speaks to. Several steps to consider:
In the end, this is all about engagement. This is everything but passive. It means having the right people in place who have been trained and are motivated to engage with the customer and create a strong customer experience.
Smiles definitely improve a customer experience, but by themselves they do not create long-term, sustainable customer loyalty. It takes a myriad of factors and as Professor Blackburn says, “…the majority of decision makers recognize the importance of personal relations with customers, [but] they are failing to develop their own customer loyalty strategies.”
That’s as true for SMEs as it is for larger-scale retailers. Customer centricity and loyalty have to be important enough to be part of the business and marketing strategies for long-term loyalty to exist.
I’m stilling trying to figure out what the other 46% of SMEs teach their staff to do when first engaging with a customer.
It really starts with how companies treat their employees. So many employees aren’t smiling because they don’t have anything to smile about it. In theory, the small business should have an advantage in how they engage their employees, but unfortunately this isn’t always the case.
It’s pretty simple.
1. Be a great place to work.
2. Train and empower them to deliver a great experience.
3. Give the staff something to smile about on a daily basis.
Okay, it’s not always simple to execute. And therein lies the challenge and the opportunity for companies of all sizes.
Absolutely small retailers have an advantage. I visited a client recently on the sales floor for an hour. During that hour he kissed or was kissed by 19 women. Try being a chain store manager and get away with that. The lady who does my dry cleaning always welcomes me with a hug and kiss. I have no clue what she is charging me to clean my shirts. All I know is I look forward to visiting her business. Oh yeah, they smiled too.
Consumers respond to good service whether it is large or small companies. For smaller retailers it can be perceived to be more genuine while for larger retailers it can seem forced. It comes down to employee training and reinforcement that it is important to deliver great service, whether it is the body language or actual delivery.
Employees are indeed the last true differentiator that competitors have the most difficult challenges duplicating.
Is there an advantage? No, I will not give big retailers that excuse. 😉 I think physical stores of any size and of any size company have equal opportunities to train and enforce employee behavior with shoppers.
Some great suggestions of specifics were made in the comments below.