Thursday 07 November 2002
Rules For Retailers
I’ve spent the last three evenings at malls, trying to find some clothes and to get a few other things done. In the wake of this, it occurs to me that the people in the business of selling things have forgotten how to do it.
While the economy was booming, I was usually told by the managers of these incompetent retail establishments that the problem was that it was difficult to hire enough staff — everyone already had a job — and that it was difficult to keep anything in stock, so fast did it fly off the shelves. That’s plausible if unlikely, and I looked forward to an improvement in the experience of spending money as the economy soured. It hasn’t happened, and the excuse I hear most often now is that cost-cutting measures have resulted in the place being understaffed, understocked, and generally miserable.
Doing my bit to rescue the economy, I offer these tips to aid retailers. I don’t say these things because I hate retailers, or because I think that I, as a customer, am some sort of god. I say these things because, if you are in business, you are probably in business to make money. Customers give you money in exchange for goods and services. Treating your customers well will make it more likely that they will give you money.
There are probably hundreds of good points I could make here, but I’ll just offer what I can think of off the top of my head, the things that should be abundantly clear to anyone.
- Nobody is forcing you to do this. If dealing with the whims of customers is just too much bother, or not profitable, or boring: do something else. You are under no compulsion to remain at your current job or in your current line of business. These rules apply to you because you choose to put yourself in a situation where your profit depends on customers.
- Be prepared to deal with customers during the whole of the hours of business posted on your door. If you are a restaurant, you are not allowed to start stacking the chairs on the tables before your official hour of closing. You are not permitted to perform any regular mopping, vacuuming, or other periodic day-end cleaning until the customers are done and out of there. During your regular hours of business, the entire purpose of your enterprise is the direct sale of goods and services to customers. Housekeeping, bookkeeping, restocking, re-arranging, and ready-to-leave-getting should be done after the customers are done and you have their money. If business is so slow that it’s not worth actually being prepared for customers during the last hour you’re open, or worth paying your employees past closing time to take care of the housekeeping, maybe you’re staying open too late, or charging too much, or selling something that nobody wants. Or maybe your would-be customers just don’t feel like dodging the cleaning crews while trying to spend money.
- Don’t make customers work for the privilege of giving you money. If you do not have enough staff to handle your normal customer traffic, you do not have enough staff, full stop. If you cannot afford to hire enough people to handle the business you’re getting, you’re not charging enough for whatever it is you’re selling. Some customers are willing to do a lot of work in order to save money — witness the success of Wal-Mart — but if your premises have carpeted floors and non-fluorescent lighting, and if you don’t market yourself as a discount warehouse, you should be doing the work, not the customer.
- Let customers evaluate potential purchases. If you’re selling an electronic gadget, the unit on display must be operable. The customer is not considering purchasing that digital camera as an objet d’art. While its physical appearance and mass are one of the things the customer will consider in evaluating it, they are not the main things.
- Do not hound customers with ‘service’. If you are selling extremely complex and specific goods, or something that’s locked away, you may approach the customer immediately upon his entrance to your place of business. If, however, you are in the business of selling sweaters, shoes, trousers, hats, objets d’art ‘gifts’, or some other goods the selection of which depends largely on personal taste, back off. It’s a fine line between being available and helpful, and being obsequious and intrusive; but there definitely is a line, and with just a little attention it is possible to avoid crossing it.
- Help customers when customers need it. When customers do need assistance, it should be available, and it should be competent. On a very basic level: if you run a large department store with only one or two centralized cash desks per floor, they should constantly have enough staff to handle the customer traffic. Once a customer has carried his selections to the desk (see above about making customers do your work), he should not have to stand around waiting.
- You must know the price of things, and make this information available to your customer. It’s said that everything has its price, but this isn’t always true in the retail sector these days. Unless you intend for every transaction to involve some bargaining to arrive at a price, the prices of all your goods must be clearly marked for the customers. If a customer has to ask your the price of an item, you have failed. If, at the till, you can’t determine the price of an item, you have utterly failed. The only honorable way out of this situation is to ask the customer what he’d like to pay, and accept his offer without question. This may get expensive, but it’s easy to prevent: have enough respect for your customers to let them evaluate a product in light of its price.
- Your corporate structure, policies, and organization are of no concern to your customer. Your relationship with the customer consists of providing them with goods and services that they want, and with taking their money in return. The customer does not care that your store is understaffed due to bad management, or that the sweater he wants is not in stock because all the sweaters were moved out for the big hot pants sale, or that you can’t process credit card transactions because your computer system has failed. All the customer cares about is that you don’t have enough staff to run your business, that you don’t have the item he wants, and that you can’t take his money.
- Evaluate your business from the point of view of the customer. The customer’s point of view is really the only one that matters, if you’re interested in making money. If you don’t have any way for customers to let you know about their experiences, it’s almost certain that it’s costing you money. Isolated bad experiences are to be expected with even the best-run businesses — but it’s the businesses with no customer-feedback mechanisms that allow systemic problems to linger on and on, costing them customers and money.
- Answer the phone. Contrary to what appears to be popular belief, customers are not fooled into thinking that their call is important to you just because your on-hold message says as much. If the call is actually important to you, hire enough people to actually deal with customers. If you can’t afford to hire enough people, you’re probably not charging enough.
- Don’t answer the phone. When you are dealing with a customer in person and the phone rings — let it ring. Let a machine tell the person on the phone how important they are. Unless you sell penny candy and run a $5-per-minute 900 number out of the same location, you have no higher priority than to deal with the customer who’s standing in front of you.
- Don’t burn bridges. It’s cheaper and easier in the short run to let customers absorb the effects of your mistakes, but it will eventually destroy your business. As the saying goes, “if you don’t have a good time, you have a good story” is true in retail, too. Customers who are pleased with your business generally won’t tell other people about it unless they’re asked. If you make them sorry they ever heard of your company, they’ll tell the story to complete strangers if the opportunity arises.
- Don’t cheat your customers. This is related to the one directly above, but different. Unless you are a scam artist, know you’re a scam artist, and intend to be a scam artist, it just doesn’t pay to cheat your customers. You are exchanging something of value to the customer for money. Fooling the customer, through deceptive advertising, coercive contracts, ‘gotcha’ policies, and the like might make money, but it only works once. If you charge someone to ‘see the egress’, make sure you’ve already recouped all your customer-acquisition costs, because there’s little chance you’ll see any more of their money.
- The customer isn’t necessarily always right, but he’s always the customer. If you do a Google search for “the customer is not always right”, you’ll find a very large number of results. I’m amazed at these people; if the customers are such a pain in the ass, why not do something that doesn’t require dealing with customers directly? (See #1 above.) Most of the customer-is-not-always-right pages have all kinds of tips about getting rid of ‘undesirable’ customers, and how to set ‘rules’ for the people who are giving you money, and when to ‘fire’ customers you don’t want. If you do business in a mall and find yourself thinking along these lines even a little bit, you really need to consider whether retail is for you.
- Customer-profitability accounting is almost totally inaccurate. Especially in any kind of retail business. Most businesses who have ongoing relationships with their customers will treat some better than others. It’s just smart business, given limited resources, that the customers whose business is very lucrative will get better service and pricing than the customers whose business generates less profit. If you try to apply this to unknown or little-known customers, though, it can blow up in your face. You can’t serve only the 20% of customers who produce 80% of the profits, so stop trying. If you are thinking of classifying a customer as ‘unprofitable’ and not worth serving well, make sure that you know, truly, who that customer is and who it is he influences.
UPDATE: More customer service rules, 11 May 2003.
Posted by tino at 11:43 7.11.02