I recently worked for a multinational retailer whose internal customer satisfaction survey analysis revealed some interesting findings: When they encounter an employee on the sales floor, customers have an overall better experience as evidenced by their reported 18 percent increases in both Overall Satisfaction and Likelihood to Recommend.
In addition to double-digit increases in Overall Satisfaction and Likelihood to Recommend (a key indicator of customer loyalty), customers who encounter an employee on the sales floor spend an average of 28 percent more. And if they are highly satisfied with the employee’s friendliness, then average spending increases another three percentage points to 31 percent more.
While a 31 percent increase in customer spending is substantial, the data also reveals that nearly half of all customers (47 percent) don’t encounter an employee on the sales floor. And this begs the question: “If we know that customers who report encountering an employee on the sales floor are more satisfied overall, more likely to recommend our store/brand to others, and spend an average of 28-31 percent more, why doesn’t every customer encounter an employee on the sales floor?”
If I were a store manager for this company, I would assemble my staff right away, share these findings, and then brainstorm ways that our team can be intentional about initiating customer encounters without being intrusive or appearing to hover. Below are some top-of-mind ideas that may emerge:
- Initiate contact rather than waiting for customers to seek assistance
- Practice the 15 x 5 Rule: Within 15 feet, make eye contact, smile, and nod (while looking for cues from the customer that she may require assistance). And within 5 feet, make eye contact, smile, and offer an appropriate greeting and offer of assistance (e.g., “Good morning! Is there something I can help you find?”)
- Ask customers who have selected a clothing item if they would like assistance accessing a dressing room to try it on
- Offer to retrieve a shopping cart for a customer holding several items
- Anticipate needs: Scan for and approach customers who appear to be lost or looking for something (e.g., a public restroom, trash can, etc.)
The data is pretty clear: When customers (happen to) encounter employees, their overall satisfaction, likelihood to recommend, and spending increase. If this is true, then the corollary is true: When employees initiate encounters with customers, their overall satisfaction, likelihood to recommend, and spending (on average) will increase. Imagine the impact that employees can have on Overall Satisfaction, Likelihood to Recommend, and gross sales by increasing the total number of customer encounters (and thereby decreasing the percentage of customers who do not have an encounter with an employee) on the sales floor.
By encouraging employees to initiate customer encounters, these opportunities are not left to chance. Instead, these “chance encounters” occur by design. And when they do, the company fosters highly satisfied, if not delighted, customers who are 18 percent more likely to recommend the store/brand to others while spending 28-31 percent more, on average, than customers who do not encounter an employee on the sales floor.
What are you waiting for? Here comes a customer now…
Illustration by Aaron McKissen.
Steve Curtin always finds powerful and practical data to inform simple but success-building practices. While this is a retail establishment, I suspect the principle applies to B2B customers. It also applies to leaders getting out of their office to encounter employees. In the words of writer Tex Bender in his classic work, “Don’t Squat With your Spurs On,” “You can pretend to care, but you cannot pretend to be there.” Presence can make all the difference in how customers and employees feel. Thanks, Steve, for your usual profound wisdom in ways to delight your customers!
Sounds, simple, but effective, Contact by design. The question is why does it not happen?
Do managers think this is unnecessary (or avoidable expense) even when the sales go up? I assume profits increase, too.
Steve,
Great points about being proactive in improving the quality of the retail customer experience.
Per findings from our Voice of Customer research, this strategy should also include the following points of multichannel customer engagement;
1. Monitor online reviews to gain insights about issues that must be addressed to improve brand image and consumer experience.
2. Respond in a speedy manner to all consumer inquiries, questions, comments and complaints to demonstrate a high level of customer service.
3. Be available to consumers online, via mobile and at bricks and mortar locations to promote an easy and seamless purchasing journey.
Sephora is a good example of a company which has been innovating by integrating digital experiences as part of the retail experience.Their ColorIQ program lets consumers interact in store with sales reps with a facial digital wand that provides feedback about skin tone to ensure appropriate product recommendations. This information is also stored in a consumer’s Beauty Insider web account where it is available anytime for shopping online or in store.
Walking past the fact that increased satisfaction and recommendation scores have little proven connection to actual customer purchase behavior, there is definite wisdom in engineering more frequent direct contact between front-line staff and customers. Especially if employees are well-schooled in listening to, and emotionally connecting with, customers (i.e., functioning as ambassadors), this can go a long way in building trust.
Positive memories of experience with employees, in turn, drives positive downstream behavior (just as negative experiences drive negative behavior): http://customerthink.com/linking_employee_behavior_to_customer_loyalty_advocacy/ and
http://customerthink.com/do-you-really-wanna-work-here/
Hi Steve: by chance, has anyone at Home Depot read your blog? Some retailers I work with have figured out what you are recommending, and have splendidly deployed the tactics. Trader Joe’s comes to mind. I think there are three reasons that retailers have chosen not to adopt more employee-customer interactions on the sales floor:
1) retailers see hourly-employee costs as an expense that must be minimized, no matter what. For these companies, fewer employees translate to lower operating costs, and, by extension, greater profit.
2) managers assume that product packaging designed for customer self-service obviates any need for employees to help customers find items in the first place, let alone help them figure out which product works best.
3) retailers still don’t understand how to train employees for anything more comprehensive than basic stock-keeping functions.
There’s a lot of hype about ‘educated customers’, and how customers perform online research before buying. Some crow about how much of the buying decision is made before customers reach the point-of-purchase (some writers even offer precise percentages for this). Your findings suggest that this might not be completely correct. At the very least, I gather that retailers should assume that there’s revenue opportunity from improving how employees and customers interact on the selling floor, and that customers don’t always walk in armed with enough information to make the “best buying decision.”
Steve, I personally like this finding, because I’ve been arguing for years that companies shouldn’t be working so hard to remove employees from experiences for the sake of efficiency and “low effort.”
And yet, the correlation of satisfaction/recommendation with employee contact doesn’t really prove that employee contact is the driver.
Another possibility is that the more loyal shoppers take the time to reach out to employees. So increased employee interactions could be a *result* of already loyal shoppers, not the driver of loyalty.
Andrew, thanks for taking the time to read, analyze, and comment. Of course, I agree. If there was any doubt in my mind, it was disspelled years ago by Vashi, a top salesman at Nordstrom, who sold me four suits, three shirts, and two pairs of shoes when all I “needed” was a new suit. Buyer’s remorse? No way! The suits look great and the shoe shiners at the airport (the folks who really know shoes) reaffirm my shoe selection all the time.
Anyone who thinks Vashi represents an operating expense to be minimized is nuts.
Bob, I certainly agree with your premise. Without customer interviews, we have to draw inferences from the data. That said, besides Vashi in my earlier comment, I can think of dozens of times when I’ve increased spending as a result of an employee initiating contact with me and expressing genuine interest in my situation. Quick example: once, when I went into Home Depot, an employee approached me near the air filters to see if I had any questions. My initial response was, “No, I think I’m all set.” He asked a question or two because I appeared undecided about which filter size to buy (as I had just moved into a new home). As we talked about the square footage, number of furnaces, and existence of a humidifier, he and I ended up selecting multiple filters (air and humidifier) as well as an odd-sized replacement battery for the humidifier unit. By taking the initiative to approach me and, secondly, expressing genuine interest in my situation (as opposed to parroting a transactional: “Anything I can help you find? No? Okay then. Have a nice day.”), the Home Depot employee helped me to get everything I needed. His counsel saved me a second, unnecessary, trip to the store and tripled the amount of money I spent that day. Although I did not complete a customer satisfaction survey following that experience, I certainly would have given higher marks for overall satisfaction and intent to return based on the helpfulness of the employee I encountered on the sales floor.
Steve, I share your feelings about this, and have had similar experiences at Nordstrom, Home Depot, Ace Hardware, etc.
From your original post it wasn’t clear who initiated the contact: “When they encounter an employee on the sales floor…”
I think this is important. Did the employee initiate the contact, or did the customer?
In the first case, it supports the idea that employee interactions can drive loyalty. The other case is not as convincing, in my opinion.
Bob, another example came to mind from a restaurant setting (I think it’s important to share here, as “average check” increases are to restaurants what “average basket” increases are to retailers): a friend and I dined at SUSHISAMBA in NYC several years ago. This restaurant concept is a fusion of Japanese and Brazilian cuisines and the menu is quite unique as compared to a typical sushi restaurant. So, when Bret and I asked the server for guidance, she took control and presented us with a 2-hour steam of surprise food/sake pairings that created one of my more memorable dining experiences. If the server, instead, approached our table indifferently, rattled off the specials, and parroted a transactional: “I’ll give you a few minutes to look over the menu,” our check (and her tip) would have been much less and I would not be recalling the experience so fondly/vividly, as I am now.
Good question and an important
distinction. However, the data’s not stratified to that extent. The survey question reads: “Did you encounter an employee on the sales floor?” So, it’s not clear who initiated the contact. To your point, this presents an opportunity for further clarification in the survey’s design.
Bob, I liked your point about not cutting employees so that customer contact is improved, and customer effort decreased.
As a group we need to monetise reduced customer effort.
Steve, any thoughts?
Gautam, I support staffing models that balance customer service quality and productivity. Stereotypical operators staff myopically to a budgeted productivity metric. This is advisable to operate within a budget which, in turn, is fiscally responsible, makes stakeholders happy, and preserves jobs (including your own). As prudent as this approach is, prudence is not always a winning strategy. I recall working for a highly successful general manager in the 1990s (now running a US$100M hotel in Hong Kong) who was fond of saying, “Don’t count paperclips. Sell one more room!”
As to your point about monetizing reduced customer effort, I agree there is a relationship between reduced customer effort and increased customer satisfaction. And every major study (AMEX, J.D.Power & Assoc., ACSI, etc.) that examines the relationship between customer satisfaction scores and revenue growth/profitability, has found a positive correlation. The latest statistic I’ve read is by researcher Peter Kriss of Medallia: “Customers who had the best past experiences spend 140% more compared to those who had the poorest past experiences.”