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Over the years, we’ve worked with all types of retail organizations. And we’ve gotten to know them well.
We’ve met the individuals who embody the brand promise.
We’ve encountered the typical roadblocks to improvement (i.e., a culture or infrastructure that’s resistant to change).
And we’ve seen internal progress radiate outward and reenergize the brand-customer relationship.
Of course, every company is unique. Considerations and challenges vary widely from one category to the next. But all retailers have one thing in common: They’re bound by certain universal laws.
We consider these four to be among the most important.
Law #1: Playing Offense Is the Only Way to Win
The new Pokémon Go app is bringing a surge of foot traffic into malls, shopping districts, and retail stores. Although some retailers are looking to capitalize, most Pokémon creature hunters are likely to go unnoticed or ignored by live employees.
That’s what happens when retailers play defense. They make operational decisions based on pure visible numbers, leading them to cut head count or staffing hours. They see it as improving efficiency and stewarding budgets wisely.
In reality, they’re putting a gazillion tasks on the shoulders of fewer and fewer employees—making customer engagement, in effect, a lost cause.
Which leads to declining sales. Loss of revenue. And even tighter budgets.
Our advice: To break the cycle, think beyond quarterly sales. Start playing offensively. Mine your customer experience data for opportunities to innovate and evolve. Consider what retailers like Amazon don’t do so well, or focus on an area in which they’re not that competitive, and go after it (as long as it’s brand relevant).
Law #2: You Can’t Fix What Ain’t Broke
The other day, I had lunch with a client who oversees guest satisfaction. Previously, he was in charge of associate training. In those days, whenever there was a customer experience issue, the head of operations would come to him and say, “It’s a training issue. Go fix it.”
Many times, there was no training issue. Training was being executed to the letter. The issue, in fact, was accountability.
There’s a larger issue here as well, and it’s something many organizations struggle with. Teams aren’t aligned, leadership focuses on the wrong things, and problems don’t get solved.
Consider the failure of Target Canada. At the time, we were conducting CX research in their pharmacies (run by another company), and we saw the events unfold. Target Canada’s leadership team had the right goals in mind, and they knew their issues early on. They simply had no idea how to address them.
Our advice: Good to Great author Jim Collins articulated it best: “[S]tart by getting the right people on the bus, the wrong people off the bus, and the right people in the right seats.” If you build teams wisely and bring them into alignment, you’ll start accelerating toward your business goals.
Law #3: Policies Must Factor Both Sides of the Equation
One of our clients, a major seller of low-cost goods, had a fairly strict no-returns policy. The company didn’t want to deal with open merchandise and additional labor hours.
At the same time, the brand’s customer satisfaction scores were low. Reports of “unfriendly” associates were piling up, particularly when the return policy came into play.
At first glance, it appeared to be an attitude issue on the part of employees. But that wasn’t the case.
Associates were frustrated for two reasons. First, they weren’t empowered to help customers as they saw fit, because the no-returns policy stood in their way. Second, they kept having to answer the same questions repeatedly on the sales floor and could do nothing to placate angry customers.
Once company leaders understood the problem, they relaxed the returns policy. Not surprisingly, the brand’s customer satisfaction scores rose significantly.
Our advice: The best policies balance business interests and consumer demands. If a policy is skewed too heavily in one direction or the other, it will eat away at profits or alienate customers.
Law #4: The Less Red Tape There Is, the Faster You’ll Progress
One of our clients in particular is very nimble and no-nonsense. We love seeing this company’s leadership in action. When an issue arises, they sit in a room, figure it out, and get things done.
Unfortunately, this isn’t the industry norm. Retailers tend to move slowly. It’s “death by committee,” as every department weighs in and makes its own demands. There’s plenty of activity, but nothing ever gets done, and no one is truly accountable for results.
In our experience, this bureaucratic approach invariably leads to less than effective customer experience surveys and diluted data—data that’s shared and interpreted any number of ways to make and sell someone’s point.
Which leads to bad decision-making. Or no decision-making.
Our advice: Put your customer experience management provider in charge of the process. Have them outline steps, timelines, and accountabilities. An ongoing stream of solid data, and your provider’s expert analysis of it, can highlight strengths and weaknesses of the current strategy and point the way toward even bigger gains.
What Would You Add to the List?
When you read these “laws of retail,” did a certain success story or industry failure come to mind? Are there any caveats or exceptions you might add?
Which “law” is most important to you?
Is there a critical one we overlooked?
Don’t hold back. Let us know your thoughts in the comments below.
This article was originally posted to our blog where you can find more posts like this at ICC/Decision Services Blog.