Sometimes, the way customers treat employees is just a reflection of their own bad days. Other times, they’re extreme reactions for justified reasons. For example, said Walmart cashier said that customers often get upset at her when a sale item doesn’t ring through on sale. When they mention it and act like the cashier should have caught the mistake, she thinks to herself “well how would I know that?”

In fairness, a retailer like Walmart sells thousands of products. But they do put out a weekly flyer with  all of their markdowns. It may be too much to ask that cashiers memorize the prices of all of their markdowns, but it’s clear that customers would appreciate them taking note. According to Yankelovich, Consumers in Control: Customer Service, consumers are generally displeased with customer service and this is just one example.

• 62% of consumers believe that most retail employees just don’t care about their needs. It could be interpreted that this example falls into this category. After all, an employee looking out for their customers may try and look out for pricing errors on sale items…so says the consumers.
• 66% of consumers believe companies are about sales, and don’t care what the customer thinks provided they’re seeing profits.

What these statistics indicate is that customers have no brand loyalty – if they don’t feel a business is looking out for them, they’ll go anywhere. When a competitive market often means offering competitive pricing, strong customer service is what can help a retailer stand apart and get the repeat business.

Companies that want to prove to their customers that they do care about customer service can consider mystery shopping as an option, because a program can identify the areas that need improvement.

It may not be realistic for every CEO to go undercover within their own company, fun as it may be,  but mystery shoppers can provide many of the same benefits that are seen on the show, including:

1. Insight on employee satisfaction – this seems to be the main focus of Undercover Boss as the executives take the time to sit down and discuss job satisfaction. Secret shoppers can gauge this through the actions and job commitment of employees that they encounter during a visit. From there, businesses can run with the feedback and try to improve in areas that staff feel are lacking for even better morale!
2. Customer response to company policies - all retail establishments have practices in place that employees are expected to uphold when dealing with customers. Some might be better in theory than in practice, as the Undercover Bosses learn when working on the front lines. Certain sales tactics, for example, might not get the desired response from customers. Mystery shop reporting may help understand the unintended consequences of these policies.

These are just a couple of the links to mystery shopping that appear on Undercover Boss. You might be tempted to tune in just to see executives embarrassing themselves, but you’ll find your interest piqued about secret shopping.

According to AdWeek, a new six-country survey from DDB reveals that Facebook users who like a brand’s page on the social networking site use its products regularly or occasionally and, after following the brand on Facebook, more than a third of the respondents “want to buy this brand’s product more”.

Turns out Facebook fans are active and involved brand advocates. Most people start following brands they are already familiar with or have been recommended to them, specifically so they so they can get promotional offers.  They graduate to becoming a brand advocate and often go a level deeper, wanting to know about new products, have access to exclusive and breaking information as well as the ability to share and express opinions on the brand.

Corporate leaders dramatically overestimate how much the customer wants to talk to a customer service representative. They believe customers value live service twice as much as self-service. HBR’s data shows customers are significantly indifferent to that claim, and they value self-service just as much as they value using the phone. More interestingly, that indifference doesn’t change across their demographic, issue type or urgency.

It’s an interesting predicament: what should your company do to improve its customer service when the customer prefers self-service? And what’s compelling the customer to repel real-life interaction? It could be argued that with the rise in social networks, people don’t like to engage in as many face-to-face conversations with others. Maybe fascination with technology has won out and the lure of fancy, powerful machines are more attractive than the sales associates. Or, now, everyone considers themselves a control freak and dislikes relying on other people to get something done.

Or maybe, customers haven’t wanted the relationships companies have been pushing all along and this rise in self-service finally gives them the easy way out. That’s not a comforting thought for retailers who build their company on the promises of quality customer service. So, what should those retailers do?

It’s a simple task in the world of automated customer service recordings, information computer stations and high tech self-service cash registers: have customer service reps be real people. Too often, customers blow off the sales associates because they sound like robots reading from a script. If customer service practices create authentic experiences by individualizing how each customer gets served, it’s a good bet that customers will again appreciate that friendly face that greets them right when they walk through the door.

That doesn’t mean retailers shouldn’t welcome changes to their stores. Around the same time of the release of that report came another study that revealed people are happier if they spend their money on experiences and not material goods. So what’s a store that makes and sells material goods to do? Create an experience around shopping, like B. Joseph Pine II and James H. Gilmore suggested in their 1999 book The Experience Economy. In short, Pine and Gilmore state companies must create memorable events for their customers so the memory becomes the product instead of the tangible good they purchase. It’s why you see more roller coasters springing up in shopping malls and more cafés attached to bookstores and even home goods stores.

Online shopping contributes to retail sales, but offline shopping offers an opportunity to create a lasting memory that turns a consumer into a loyal customer for your brand. How do you transform your store into an experience? PSFK, a trends research and innovation company, proposes that successful stores are the ones that leverage technology and push the boundaries of storytelling, product testing and education, two ideas that will be explored in upcoming posts.

TheStreet points out that the survey echoes a 2006 Journal of Marketing study regarding the American Customer Satisfaction Index (ACSI). That study revealed the top 20 percent of companies in the ACSI combined outperformed the Dow by 93 percent, doubled the S&P 500 and nearly tripled the Nasdaq.

This year, Nordstrom saw increases in its ACSI as well as its net earnings, and it currently leads all department store retailers. It boasts an ACSI score of 83 out of 100, up 6 points from 2009, and saw a 44 percent boost in net earnings, a 17 percent jump in net sales and a 12 percent increase in same-store sales in the first quarter that ended May 1.

Jim Bush, American Express Executive Vice President for World Service, thinks some companies should rethink how they view customer service. “It’s important to see [it] as an investment, not a cost.”

It’s an investment with an infinite payoff. According to the survey, 75 percent of consumers claim good customer service will make them spread the word about a company that treated them well. Today’s digital age makes that easy for them to do. Reward your customers, and they will reward your company.

A Wall Street Journal story documented a survey of airline managers world-wide. In the survey, the managers listed, “customer loyalty and retention,” as third behind fuel costs and competition as top challenges for the industry. This was a big jump for consumer mindedness over a similar survey two years ago.

Digging deeper into the story, we find an even more important epiphany. In the search for the elusive loyalty and retention, about half of the respondents identified the customer experience and communication with customer as even more important then the airlines celebrated loyalty programs.

Of this same group of managers, 86% picked customer loyalty and retention as having a positive impact on an airline’s business, more than any other issue.

Only time will tell how this industry will apply this wake-up call, but it’s a positive sign. At a time when winning customer loyalty is more difficult than ever, delighting the customer should at all times be the focus and the reason for our being.

The study used seven factors that contribute to customer satisfaction at retail: non-pharmacist staff, store convenience, medication availability and information, store layout and design, cost competitiveness, remote ordering convenience, and pharmacist.

Beyond the retailer rankings, perhaps the additional findings of the study are more interesting. The study found that high satisfaction scores are financially beneficial to pharmacies in three ways:

1. Higher rates of loyalty. A highly satisfied customer is three times more likely to return to the store/pharmacy.

2. Higher rates of advocacy. That same customer is seven times more likely to recommend their pharmacy to others. With the power of social media, that positive review can be increased exponentially.

3. Increased revenue per visit. On average, a highly satisfied customer generates $30 more in pharmacy revenue per visit than those who are less satisfied. To extrapolate, a pharmacy with 1,000 customers each month can gain an additional $360,000 in revenue annually.

It is probably true that you can’t please everybody, but most of the factors that lead to deep customer satisfaction are well within grasp. This study shows proof that measuring and managing those factors produces great returns.

In the article, “What Service Customers Really Want,” authors Dave Dougherty and Ajay Murthy build a compelling case for placing the customer experience at the top of your list of concerns.

According to the authors’ research, when customers are seeking service, they want knowledgeable employees and immediate problem resolution. But when it comes to metrics, most companies follow outdated practices like tracking time spent on hold and minutes per call. Techniques that encourage rushed calls and solutions that further inconvenience the consumer.

The impact of a bad customer experience is dramatic and immediate. Dougherty and Murthy say that 40% of those who have a bad experience stop doing business with the company. The remedy is an integrated approach taking information from a variety of customer/employee touch points such as satisfaction surveys, behavioral data and recorded conversations. Using this information, companies can revise processes to provide front-line employees the latitude to provide a satisfying experience upon first contact. This data, gathered from all channels, can then be applied upstream to the root problem, be it manufacturing, distribution, packaging, etc.

The new consumer reality is that customers will no longer tolerate dissatisfaction in exchange for long-held loyalty to a brand. They will simply and without warning go elsewhere. Compared to this harsh result, a little service goes a long way..

Fostering Brand Loyalty
In a dream world, brands would love an abundance of loyal customers. Unfortunately we are in the real world which requires brands to foster loyalty with consumers. One of ICC/ Decision Services experts, Terry Vavra, has coauthored “Loyalty Myths: Hyped Strategies That Will Put You Out of Business and Proven Tactics That Really Work“. The authors found consumers who had high involvement levels with their brand where more loyal. So how does a brand engage consumers?

Taken from “Loyalty Myths” , customer involvement can be fostered by:

1.Increase the purchase’s importance for the customer
2. Adding emotional significant to the purchase
3. Associating the purchase with an ongoing interest
4. Associating the purchase with a relevant reference group.

All of these considerations are directly related to the customer’s experience. Significance can be added by brand’s promoting their top benefits. For example, take laundry detergent. Military members are a niche market whose uniforms require laundry detergent with no certain additives. There are very few brand which fill this need. These brand should ensure availability in every grocery store which surround military installations. This takes the importance of purchasing the right brand within the reach of the customer.

The only way for brands to foster involvement is to know your consumer. Proactive consumer and industry research provides important insight to consumer needs, interests, and emotional attachments. Brands should know which benefits they offer their customers. Whether it’s being gluten free, organic, or offer an advantage over the competition, this is the information consumers are looking for. This is information that needs to be visible at the retail shelves.

The point of purchase is the last place and the most important place brands can reach a customer. How is your brand using point of purchase to foster customer involvement? Do you offer coupons? Free samples? There is not one right answer for all brands. Brands who research and ask customer’s for feedback, will know what are the most effective ways to foster customer involvement.

What are the techniques brands get you, as a consumer, involved? Does it help foster brand loyalty?

This is what Starbucks new marketing campaign is focusing on – loyal customers. The past year, Starbucks has been the target of media claiming the brand is too expensive. Providing an opening for competing brands to market as the cheaper coffee choice. Starbucks is aiming to change that assumption.

Starbucks new strategy is to focus on it’s existing customer experience. The company opened a store in Seattle with a new look that resembles the golden era of a “coffee house.” The brand is not touting frozen drinks but putting the good old Starbucks coffee blends in the spotlight. Coffee promotions and store layouts will be focused on what attracted Starbucks first customers: the coffee.

In an article by the Wall Street Journal, Howard Schultz, CEO is quoted ” The issue at hand … is the cost of losing your core customer…It’s very hard to get them back.”

Loyal customers will be the ones to carry you through tough times and be your evangelists in good times. It’s always important to listen to your customer’s voice, they will be the ones who will tell if your headed off track.

What happens when the majority of department stores sell similar brands at competitive prices? Retailers then need to start focusing on customer experience and customer satisfaction as differentiating factors.

For instance, retail electronics giant Best Buy offers in home tech support with Geek Squad.

Can you think of any other examples?

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I think that for some who have allergies, improved labeling would provide better service. Also, in general, people are now eating healthier and are more interested in what they are putting into their bodies. However, most labels are hard to understand and read. If a company can make the effort to make labels easier to understand, then they will have a competitive advantage.

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Currently, the customer experience at most banks cater to the Silent Generation and Boomers who more frequently bank in-person. To reach the younger generation who are much more mobile and rely on more heavily on online interactions, banks will need to focus on the online customer experience.

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Bob Fish, the East Lansing-based chain’s chief executive officer and one its co-founders said,

“We are a franchise company and Starbucks is not. Most of our operators are people from the community…There’s a big difference between an owner running the store and any other restaurant chain with many, many units. They’re not just an employee; they own the business. It adds energy, excitement and enthusiasm.”

Because each store has local connections, this contributes to more meaningful customer engagement and greater customer service.

So far Biggby’s business model has been working. They expect to grow to 250 stores by 2010.

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Across many industries, we’ve seen that the retailers that grow customer-service ratings the fastest have greater sales growth,” says Chris Denove of J.D. Power and Associates. “Prices have come down dramatically on electronics items, and at the same time, the complexity of the products has increased. Expert advice is more important than ever.”

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Mr. Burke says, “Our Honors members tend to be the group that buoys us through a downturn. They are the core audience and tend to stay loyal and sustain the business especially through those downturns.”

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Small- and medium-sized business customers who use the Online Mall can get discounts from more than 350 retailers, including Best Buy, Dell Computers, Office Depot, Expedia, eBay and Target

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