Ask almost any
independent retailer what his/her store's strategic competitive advantage is and
you will almost always hear the same answer: customer service. I only wish it
was true. Their customer experience might be better than their competition but
most are not and the retailers don't even know it. They have fallen victim to
the reality gap, the difference between the owner's perception of their
customers experience and the actual experience. That's not to say that chain
stores don't have a gap of their own but the impact of that gap is often more
visible and certainly more detrimental to an independent's existence than their
larger competition.
The customer experience reality gap continues to grow for many reasons. First is
the independent retailer's belief that service is getting worse at the chain
stores. True, service at many chain stores is less than stellar but I don't
believe it's gotten any worse over the last several years. Sadly, customers have
come to expect less from the chain stores, which makes it easier for them to
meet the customer's lowered expectations. In some chain stores customer service
has actually improved. In recent trips to two different Home Depot stores I've
encountered staff that seems more focused on the customer than in the past. I
recently bought a patio table and chairs and while the purchase process was
frustrating, the Home Depot staff couldn't have been more helpful. One young
woman went out of her way to assist me, including twice going out to a display
in the parking lot. She was a real delight.
Another reason for the
reality gap is the lack of focus, discipline, and training of the independent
retailer's staff. If customer service is a retailer's strategic competitive
advantage then the staff needs to exceed every customer's expectations. That's
right, every customer. And not just meet but exceed the customer expectations,
expectations that are higher than those customers have of the discount chain
stores. In my own shopping experiences I'm finding more and more independents
falling considerably short.
Recently my wife was
shopping for a new lamp shade. The old one was destroyed by those gremlins that
sneak into children's rooms and get up to mischief that gets blamed on the
children. Well, off to the light store went my wife, shadeless lamp in tow. She
told the man at the counter what she needed. His exact words were, "Well, we
don't have a lot but they are back there in the corner. See what you can find."
Back there. See what you can find. That is way short of expectations. Compare
that to the Home Depot employee who twice walked out to the parking lot. The
reality gap strikes again.
The owners of
independent stores also cause their own reality gap by focusing on the wrong
things. They put placing orders or merchandising products ahead of waiting on
customers. They measure sales but not customer satisfaction. They spend time on
the floor but don't use that time as an opportunity to observe and coach the
staff. They just assume they have better customer service than their larger
competition. Maybe they do, maybe they don't. Even if they do, it may not be
remarkable enough to the customer because the customer expects more in the first
place.
The reality is that most
of our store visits are unremarkable, and because of that, unmemorable. And if
it's not memorable, then it's not any different from the competitors, so is
therefore not a strategic competitive advantage. The result? A reality gap.
Challenging Your Reality Gap
So how does a retailer of any size challenge their reality gap and become an
experience leader? First taking these three steps.
1. Analyze the competition. If a customer is not going to buy from you then
where are they going to shop? What is that retailer's competitive advantage? It
is price? Selection? Location? Services? Customer experience? How does your
competitor's staff and level of service differ from yours?
Try to identify three strengths and three weaknesses for each of your key
competitors. Too many retailers ignore their competition but you can't beat what
you don't know. I strongly recommend that retailers shop their competition at
least once every three months. If for some reason you can't or you're not
comfortable doing it yourself then at least send a member of your staff or a
friend to do so.
2. Identify your experience differentiators. One of the reasons the reality gap
exists is that differences in customer service between stores are barely
discernible. It's easy to differentiate your store by its layout and
merchandising but the experience your customer has with the staff is what
ultimately makes one store more memorable than another.
Isn't it true that
almost every time a friend or family member tells you about a great experience
they've had at a store it's because of the connection they made with another
person? What can happen in your store to guarantee the experience is more
memorable than at other retailers?
There are various experience differentiators and the right one for your store
depends on the store itself. It could be the way the customer is welcomed and
engaged when they enter the store. It could also be the selling process or the
check-out process that's a differentiator. It could also be the way services are
delivered or the extras that are offered. Or maybe it's your technique and
process of educating the customer. Whichever method fits your business,
identifying the experience differentiator that's right for your store/s will
help eliminate any reality gap and deliver a customer experience that's second
to none.
3. Evaluate your current customer experience. This step can be as simple or
extensive as you'd like. While some might want to invest in doing exit surveys
or a focus group, I find an honest self- evaluation of your store's true
customer's experience often gives you the information you need. How well are you
delivering on your experience differentiators? What is physically happening in
the store to combat your competitor's strengths and weaknesses? What is
currently taking place in your store that makes your customer say WOW when they
leave?
Our experience shows
that once you've taken the time to evaluate your current experience, you will
discover some gap between your desired experience and your current experience.
More important, you will probably discover that your store's experience and your
competitor's experience aren't too different. Therein lies even a greater
challenge. If you don't create a more memorable experience than the one your
competitor is delivering, you will be forced to compete on perceived value. We
say "perceived" value since most consumers already have a perception that
smaller independent retailers have higher prices than larger chain stores.
Overcoming that perception is challenging and costly to the bottom line. The
profitable alternative is to deliver unique and memorable customer experiences.
Becoming an Experience Leader
Here's what you can do
to bridge the reality gap and dominate your competition.
1. Design and execute an
experience strategy. Very few retailers have identified their experience
differentiators and as a result they can't deliver consistent and repeatable
memorable experiences. High-performing employees will often deliver memorable
customer experiences but if every one of your employees can't exceed the
customer's expectations then you've got a reality gap.
To deliver experience
that sets a retailer apart it is necessary to create a systematic retail
approach that employees can execute, managers can train on and expect their
staff to accomplish, and owners and executives can measure and improve.
How is this approach
different from standard retail? To begin with, most retailers don't really have
a retail floor strategy. They confuse sales training with a retail floor
strategy. A retail floor strategy is the defined outcome that every customer who
comes into your store will experience. It makes sure that your employees
consistently engage customers and deliver your experience differentiators.
The most successful
floor strategies are internally branded and well communicated. It's easy to
learn, easy to remember, and easy to execute. Too many retailers are asking
their staffs to remember things like the "12 Steps of Customer Excellence" or
some equally long and involved set of instructions. Less is more when developing
your experience strategy.
A well-designed
experience strategy is a combination of a customer service approach and the
sales process. Employees know exactly what is expected of them to engage the
customer, create sales, and deliver a memorable customer experience that turns
that customer into a loyal and raving advocate. It makes sure that employees are
proactive with the customer, not reactive. It choreographs the customer
experience to ensure that every customer receives a consistent experience, no
matter which location the customer visits or which employee they interact with.
It also aligns a company's market position and its values and mission to its
retail floor strategy. Designing and executing a retail experience isn't easy
but the results are quite rewarding.
2. Teach, coach, repeat.
Change initiatives fail more often than they succeed. They don't fail because
it's a poor strategy or not a well-thought-out plan, but because not changing is
easier than changing. Anytime an organization changes there is discomfort, pain,
and resistance. Retailers too often launch new strategies with full fanfare and
then move on to the next thing, leaving the previous initiative to die a slow
death.
To execute a successful
experience strategy, a retailer must invest in both financial and human
resources required for training and coaching on the new floor strategy. A new
experience strategy requires employees to learn and to practice new skills. It
takes time and commitment by all levels of the organization to put these new
skills into place. The key is to not make this a short-term change but the new
way of retailing in your store. Don't quit before the vision is realized.
3. Implement the
appropriate mechanisms to measure and support the experience. Developing an
experience strategy is an evolution, not a one-time event. The benefit of having
a documented and articulated floor process is the ability to change it based on
the needs of the business, changing market conditions, and changes in customer
behaviors. It's important to measure the organization's ability to execute the
process as well as the customer's perception of it. We believe there are two key
mechanisms that every experience retailer must have.
a. Customer Experience
Measurement systems. Whether you're running one store or one hundred, you need
feedback from your customer. Through the use of incentives and technologies,
customers will give you feedback on their own experiences that you can measure
and benchmark. This can be used either with or in lieu of mystery shop
programs.
b. On-floor peer and
manager assessments. Practice makes perfect so it's important to practice the
right skills. Using peer and manager assessments on the floor makes sure that
the staff is receiving coaching and feedback and that they are developing
appropriately. This is not only critical at time of launch but it's a good
idea to review skills on a monthly or quarterly basis.
In this day and age it's
virtually impossible to have product exclusivity or the lowest price. Your
merchandising, your store design and all other physical elements of your store
can easily be duplicated by your competitors. What can't be duplicated, and what
can't be beat, are the memorable customer experiences that you can create on a
daily basis. You can guarantee there is no reality gap in your business when you
create and deliver the best possible experience, one customer at a time.
Remember, it's not what you sell that's important. What matters are the people
to whom you sell your products and how those people feel about your products.
After all, when all is said and done, it is all about the customer.
About the author:
Doug Fleener is founder of the Dynamic Experiences Group. He is a veteran
retailer with more than 25 years of hands-on retail experience with world-class
retailers including Bose Corporation and The Sharper Image. He has also owned
and operated his own specialty stores. His new book, The Profitable Retailer:
56 surprisingly simple and effective lessons to boost your sales and profits
published by Acanthus Publishing.
Doug is now president and
managing partner of Dynamic Experiences Group LLC, a Lexington based retail
consulting firm dedicated to helping retailers create unique customer
experiences that results in higher sales and profits. Learn more at
www.dynamicexperiencesgroup.com or call Doug at 866-535-6331.
Fleener also shares his
knowledge of experience based retailing in a series of custom key notes and
workshops designed for stores, businesses, corporations, non-profits, and trade
associations of all sizes. His casual style and quick wit make him not just a
crowd pleaser but also an incredible motivator, encouraging people to take
action and deliver extraordinary experiences to customers and employees alike.
Learn more at
www.dougfleener.com.
