Have Retail Customer Service Problems? Look to Your Staffing and Training Investment!
Today I am facilitating two training sessions on “Improving the Retail Customer Experience” in support of a 200-plus store retailer. When I deliver retail training for these types of sessions, I usually begin by asking the students: “Who's had a bad experience in a store?” The response is typically that every hand goes up. When I ask “What action did you take?” most respond that instead of complaining or getting angry, they simply move on and start shopping in other locations or competitors.
Participants in these trainings almost always share stories about how they walked into a retail store with the intention of making a purchase but did not. The reasons vary but often include simple things like
- They could not find the product
- They could not find a store associate to help them
- Sales associates with indifferent attitudes or poor product knowledge
- Long check-out lines
- Poorly trained retail representatives who could not operate POS systems
The surprising thing that often is not on the list is that the retail sales representatives are rude or display aggressive behavior. The moral of the story is that, your retail customers are no different than you are. More often than not, it is the little things that get customers angry and encourage them to shop elsewhere…They vote with their feet.
The Problem…Being Overly Focused on Cost Containment
There is no doubt that poor customer experience is endemic to the retail industry. It is perennially rated low amongst surveys by leading companies and the Federal Consumer Protection Agency. The question is why is this happening and how can retailers fix it?
According to Marshall Fisher, a professor at the Wharton School, the issue may lie with the fact that retailers focus too much on manage the wrong numbers and not enough on the right ones. In effect, it is easy to see a direct correlation between cutting payroll spending and the overall cost of doing business; but it is not as easy to see the correlation between investing in additional staffing and top-line revenue.
Retail managers may periodically see some sales associates “standing around” and not serving customers. So they can convince themselves that if they cut payroll by 5% it really won't impact customer service. But over time, it leads to the problems listed above.
The Remedy is Retail Staffing and Training
According to Fisher, the cure is not to give up managing by the numbers, but to manage by the right numbers. He studied store-level data for monthly sales, staffing levels, and customer-satisfaction-survey responses to measure the impact of store-staffing levels on sales and customer satisfaction. He found that the impact on revenue of increased store staffing was incredibly high.
On average, revenue increased by $10 for every additional dollar of payroll added to a store, and for some stores that were particularly understaffed, the revenue lift was as high as $28. At the 40% gross margins this retailer was earning on revenue, adding payroll was highly profitable, and fully supported by the numbers.
Of course, simply putting staff on the floor is an incomplete solution. Retailers need to make an investment in training retail sales associatesto become effective at handling customer issues and in selling their products.
- David Goodwin is the Principal of the Retail Advocacy Group. As a 30 year veteran of the retail industry he has hired, trained, and performance managed thousands of retail sales representatives and retail managers. You can learn more about instructor-led, e-learning, and other training solutions for retailers at www.retailertrainingservices.com.