Is Australian retail too expensive or too slack to compete in the 21st Century?
If you have any suspicion that the answer could be yes the critical question becomes, what do your customers experience as a result?
Warning: here comes a grumpy old man story.
Recently we attended a parent group dinner at one of those “Local Taverns”, which is to say a thinly disguised pokies hole.
Having resigned myself to a substandard meal, accompanied by excessive noise, I really didn’t expect much. What I got was even less.
Having ordered a veal schnitzel at the counter (no chips, extra salad), announced on delivery was a “chicken schnitzel no chips?” When advised of the error the young plate-deliverer firmly retorted: “Well what’s the difference between a chicken schnitzel and schnitzel anyway?” One presumes she meant apart from one previously mooing while the other clucked.
When I insisted on receiving what was ordered the response was : “There’s no need to be rude, why can’t you just have what I brought?”
Mentioning legendary Soviet Union service levels came to mind but, given her infant years, I doubt she had ever heard of the place. One wonders at her reaction should the local Apple store deliver her a Chinese knock-off eyePhone.
You may well ask what do you expect of a place where the large screens are filled with a constant series of Keno numbers?
I understand it is hard, in this country, to get good hospitality staff. No one wants to do it, and many of those who do ably convey a commensurate level of enthusiasm. A recent trip to the United States brought the differences in service levels into sharp relief.
We don’t necessarily want the USA $7.25 per our minimum wage with up to 20% tip scenario here. However, one can’t help thinking that a greater focus on some sort of performance incentives would help create better customer experiences.
For the “tavern” in question there would seem little point to put in place any sort of customer service measures and incentives. Staff seldom stay longer than a few months and the whole place is focussed on just keeping gamblers in the building.
Is that the situation in your business? Can you afford to ignore customer experience?
Recent ICG mystery shopping exercises, across a number of industries, have exposed concerning service issues.
In a world of easy Internet shopping physical retail needs to exploit every opportunity and must offer an experience not possible online.
Obviously that is easier in the retail of large purchases that benefit from the customer physically trying the product, say, automotive. But even in such retail the opportunity for customers to cross-shop and undertake detailed research online creates challenges in maintaining both service and profit levels.
During such exercises the range of experience delivered to ICG researchers covers everything from walk-in customers being totally ignored, to poor standard-form email responses to internet enquires, to the classic never calling the customer back on a telephone enquiry.
Good operators (and they tend to be individuals not entire organisations) know their product, engage with the customer and follow up quickly. They get the sales. The others appear to aggressively (or even passively) staff their station or desk.
The only way to improve group performance is good old-fashioned training, incentives, measurement and accountability. ICG’s mystery shopping exercises are often accompanied by the development of management plans covering all these actions.
To extract the maximum value from your investment in people you need to know what level of customer experience your retail staff are delivering and to plan for continual measurement and improvement.
The alternative to providing positive customer experiences is the complete commoditisation of whatever you are selling. Today that means the lowest Internet price sets the market and the profit (or loss) level. There will always be price shoppers and there will always be shoppers who appreciate proper service. Which group is likely to deliver better margins?
The next time you read of some mega-retailer complaining that the Internet is stealing their business think of the level of service delivered at their barn (let alone any interest shown in the customer).
Finally, an example of how not to compete with online.
Recently a high-end clothing store in one of the fashionable (and dying) strips introduced a policy of charging browsers $5 (refundable on purchase) for “just looking”. They claim this is their counter strategy to “shopfronting”, the practice of trying something at retail outlet then buying it online at a lower price. What a wasted opportunity!
Perhaps if they focussed a little more on providing a customer experience that justified their premium they could convert more of the “shopfronters”, who are actually in the shop, into buyers. Another “For Lease” sign will not be far away.
John Kananghinis
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Too expensive or too slack?
Is Australian retail too expensive or too slack to compete in the 21st Century?
If you have any suspicion that the answer could be yes the critical question becomes, what do your customers experience as a result?
Warning: here comes a grumpy old man story.
Recently we attended a parent group dinner at one of those “Local Taverns”, which is to say a thinly disguised pokies hole.
Having resigned myself to a substandard meal, accompanied by excessive noise, I really didn’t expect much. What I got was even less.
Having ordered a veal schnitzel at the counter (no chips, extra salad), announced on delivery was a “chicken schnitzel no chips?” When advised of the error the young plate-deliverer firmly retorted: “Well what’s the difference between a chicken schnitzel and schnitzel anyway?” One presumes she meant apart from one previously mooing while the other clucked.
When I insisted on receiving what was ordered the response was : “There’s no need to be rude, why can’t you just have what I brought?”
Mentioning legendary Soviet Union service levels came to mind but, given her infant years, I doubt she had ever heard of the place. One wonders at her reaction should the local Apple store deliver her a Chinese knock-off eyePhone.
You may well ask what do you expect of a place where the large screens are filled with a constant series of Keno numbers?
I understand it is hard, in this country, to get good hospitality staff. No one wants to do it, and many of those who do ably convey a commensurate level of enthusiasm. A recent trip to the United States brought the differences in service levels into sharp relief.
We don’t necessarily want the USA $7.25 per our minimum wage with up to 20% tip scenario here. However, one can’t help thinking that a greater focus on some sort of performance incentives would help create better customer experiences.
For the “tavern” in question there would seem little point to put in place any sort of customer service measures and incentives. Staff seldom stay longer than a few months and the whole place is focussed on just keeping gamblers in the building.
Is that the situation in your business? Can you afford to ignore customer experience?
Recent ICG mystery shopping exercises, across a number of industries, have exposed concerning service issues.
In a world of easy Internet shopping physical retail needs to exploit every opportunity and must offer an experience not possible online.
Obviously that is easier in the retail of large purchases that benefit from the customer physically trying the product, say, automotive. But even in such retail the opportunity for customers to cross-shop and undertake detailed research online creates challenges in maintaining both service and profit levels.
During such exercises the range of experience delivered to ICG researchers covers everything from walk-in customers being totally ignored, to poor standard-form email responses to internet enquires, to the classic never calling the customer back on a telephone enquiry.
Good operators (and they tend to be individuals not entire organisations) know their product, engage with the customer and follow up quickly. They get the sales. The others appear to aggressively (or even passively) staff their station or desk.
The only way to improve group performance is good old-fashioned training, incentives, measurement and accountability. ICG’s mystery shopping exercises are often accompanied by the development of management plans covering all these actions.
To extract the maximum value from your investment in people you need to know what level of customer experience your retail staff are delivering and to plan for continual measurement and improvement.
The alternative to providing positive customer experiences is the complete commoditisation of whatever you are selling. Today that means the lowest Internet price sets the market and the profit (or loss) level. There will always be price shoppers and there will always be shoppers who appreciate proper service. Which group is likely to deliver better margins?
The next time you read of some mega-retailer complaining that the Internet is stealing their business think of the level of service delivered at their barn (let alone any interest shown in the customer).
Finally, an example of how not to compete with online.
Recently a high-end clothing store in one of the fashionable (and dying) strips introduced a policy of charging browsers $5 (refundable on purchase) for “just looking”. They claim this is their counter strategy to “shopfronting”, the practice of trying something at retail outlet then buying it online at a lower price. What a wasted opportunity!
Perhaps if they focussed a little more on providing a customer experience that justified their premium they could convert more of the “shopfronters”, who are actually in the shop, into buyers. Another “For Lease” sign will not be far away.
John Kananghinis
External Stakeholder Audits Hold the Key
RMKA has recently completed external stakeholder audits for two substantial community organisations.
In both cases, the studies turned up a rich lode of usable information.
External stakeholder audits involve finding out what the people you deal with think of you. It’s a gutsy initiative but an essential one in the interests of organisational improvement – particularly in meeting stakeholder expectations.
The audit begins with the consultancy and client organisation agreeing on information objectives: What do we need to know? The client then produces a list of potential interviewees whose opinions the organisation would like to plumb. Frequently, the consultancy will have input into the list, but most of that information needs to come from the client.
The consultancy then drafts a personalised letter that the client sends to the potential interviewees seeking their participation.
In our experience, it is rare for people to refuse to participate, even though we are typically dealing at very senior levels.
The consultancy then organises and conducts one-on-one interviews with the participants.
Once interviews have been completed, the consultancy prepares a report that summarises the findings of the interviews and provides a set of concrete recommendations for follow-up action by the client. The exercise normally takes two-three months to complete – largely because of the difficulty we have in pinning down senior people to commit to interview times. The interviews typically run for about 45 minutes.
We don’t filter or soften messages and interviewees are inevitably candid and expansive once they get into the swing of the interview. This means the report can be quite confronting.
The study is biased in that we are deliberately looking for problems because it is the problems that give an organisation a platform for improvement.
But despite being assailed by a flurry of negative messages, client organisations inevitably take the messages on board and follow through with actions to remedy the problems. The organisations are well prepared for negative comment: they made the hard decision when they commissioned the study.
ICG consultants are always invited to present the findings and recommendations to senior executive teams and often to Boards of Directors.
External stakeholder audits are a valuable tool for business improvement. They should be an essential planning device for all large organisations.
Garry Oliver
Now is The Time to Start Lobbying
While the Prime Minister set a new record for the length of an election campaign, she also opened a long innings for business and other organisations to influence the way political policies are being developed for the electorate.
Business now has the opportunity move within a defined timeframe bounded by dates, and the important one being 14 September.
If business and community organisations want to make the difference they will need to get into the political parties themselves and those behind the scenes who are now feverously developing policies to take to the electorate.
The Liberal Party has already provided a broad approach to what it is seeking to do in government. But there is a lot of detailed work yet to be developed before the voters get a clear picture on what they will be voting come election day.
The core to any lobbying strategy now must be one of ‘structured, election-focused engagement’.
Organisations must look at what they want and how this can be made appealing to the voter, or make a significant change to an industry, research, development etc. They also need to understand the difference between lobbying and influencing the parties, the cultural factors and the power of certain individuals exercising policy research.
They also must focus on how they are going to influence key backroom party members – those setting the policies – along with the politicians themselves, including new members, especially those in marginal seats. It is important to remember that at least 13 current members of parliament will not be standing for the next election.
To achieve a satisfactory outcome, industry must have a combination of well developed understand of party politics, top priorities that appeal to the broader public (i.e. catches a vote) and then drill this down to a communication campaign that embraces the ‘foot work’. This is were the real work is done, selling the importance of your initiative through face-to-face meetings, media exposure, champions to your cause (i.e. third parties) and letters of support from industry and community groups. In addition, their ‘story’ needs to have a impact at a local level as much as at a macro economic level.
The outcome of the selling is to seek letters of commitment on key issues at national, state and territory branch levels. Although arguments are often mounted that politicians go back on their word on certain issues when they are in government (e.g. Julia Gillard with carbon tax), there is sufficient historical evidence that holding politicians accountable to their commitments far outweighs the alternative.
Robert Masters
The Insights of Customer Data
By John Kananghinis, Director
One of the most regular B2C refrains is “how do I get to more customers?” Take that back a step and the question turns into “where are my potential customers?”
Quality data analysis combined with consumer insights will provide the answers to both of the above questions and, very often, the competitive advantage that will drive success.
The critical first step for any established B2C enterprise is to maintain customer data integrity. If that has not been done then you must clean the customer data to create the sound foundation for further analysis.
Following that, there are numerous research and social demographic tools that can profile the existing customer base and draw conclusions as to where more customers can be found. It is also possible to establish competitive market penetration and therefore target areas rich in prospects but low in market share.
However the raw information alone is often not enough to fully understand consumer behaviour. Specific experience in your industry and/or market sector may be necessary to add the overlay of customer and prospect purchase behaviour, product and service expectations, purchase cycles and social and business interactions.
What makes this a truly three-dimensional chessboard is the overlay of market segment expansion in terms of product or service offered and social mobility over the short to mid-term.
The propensity for niche exploitation in B2C will drive marketers to look for consumer profiles outside their existing customer base. Combine that with the social mobility of targeted customers and there may be implications for both product offering and physical retail location.
Depending on the product or service offered, further complexity can be added by the opportunity and cost of locating in the midst of a high value target area or choosing to position on identified customer transit routes.
ICG regularly assist clients with this task. Such work has resulted in greater ROI for the marketing and communication dollar and, most importantly, more customers for our customers.
Sourcing the information and demographic analysis is not especially difficult. Careful selection of a suitable supplier is, of course, essential. Similar care is required for the preparatory step of cleaning and analysing current customer data. What is then required is to draw on market and customer insights to ask the right questions in order to get the correct answers.
JK