Customer Service: Increase Profitability by Evaluating Your Customers

I'm a great fan of Penni Wells, our Leadership Quantified Expert specializing in customer service - both internal and external. No matter what industry or sector your organization is in - or how old or what size, for that matter - her insight is always on target and directly applies as much to customer contact through your call centers and front line staff as to your dealings with suppliers and all your internal relationships. 

I'm happy to announce that Penni will be contributing posts to the blog every other week - starting now. Enjoy!
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Have you ever wondered why your customers are visiting your place of business? It's safe to assume that you have something they need or your presentation - b2b or b2c - was so compelling that you garnered their interest enough to find out more.

The question then becomes: How do you turn that initial level of interest into a sale?

That's the secret of really good customer service. It's what makes customer service a profit generator rather than ill-defined, passive and reactionary.

It's all about evaluating and knowing your customers' needs - before they ever walk in the door - then training and deploying your staff to fulfill those needs in a way that fits your customers' needs and preferences.

The easiest way to explain is to use a retail example - but this works for any sales opportunity.

Case Study - Customer Demographics and the Christmas Gifts

Last Christmas, I was shopping for one last gift for each of my two adult sons in a clothing store they both particularly like that caters to men in their 20's. I hadn't shopped in the store before and although I had the basic parameters (i.e., their sizes and color preferences), past that I was clueless.

What really perplexed me was the merchandizing. I love to shop and am all about displays and presentation, but on entering the store, I was flying blind! The "looks" were displayed in ways I couldn't make any sense of.

I gave up trying to find something for one son and began searching for an item for the other. Finally - success! A baseball-sleeve type shirt to match his blue eyes! Perfect!!

Then I realized the "M" didn't look so "M."

Upon closer inspection I saw the tag read: "Medium - Women." I had stumbled into the Ladies Section - which was really strange because looking at the store as I walked in, I would have sworn there was no Ladies Section at all!

I hastily put the shirt back, looking around sheepishly as if someone might have seen my error. It was then I noticed a few other parent-types who looked as confused as I, wandering among the perfectly happy, younger shoppers the store was designed for.

By this time I was curious to see how long it would take for someone to offer to help me. A few moments later a woman, who seemed far more frustrated than I at that point, was noticed by a sales associate who came to help her. Within a few seconds I was approached by an extremely kind young man who offered to help me – which took me by surprise at first because he was dressed like the shoppers in the store and had no name tag or store identifier of any kind. Thankfully, he understood what I was looking for, was quick to help me and I was able to make my purchases and leave with a sense of success.

So what’s the point of all this? Is it that:
  • Stores should merchandize differently so that older relatives can find stuff?
  • Women's sections should be easily identified?
  • Sales folks should wear name tags?
No. It’s actually none of these. It’s about maximizing productivity and customer satisfaction by training and deploying sales staff to achieve the greatest, most profitable results.

So, to go back to our example, here’s how management could have evaluated the customer base along with the actions/deployment they could have assigned their staff:

The Primary Market: Men my sons’ ages. They know what they want or they’ve already bought it on-line and are there to pick it up.
  • Action/Deployment: None. They don’t want or need help.
The Secondary Market: Women in the same age group. They also know where they’re going because they’ve visited the store before or are there with a friend.
  • Action/Deployment: If they need help, they’ll ask. Otherwise, if they’re there simply to browse or hang out, leave them to it. No action necessary.
Anyone Not Within Those Groups:  Anyone who looks like a parent, comes in with a parent or has small kids in tow is part of this group. Trust me. We’re there to buy something, exchange something or return something. We can tell you what we need in 30 seconds and be out in 10 minutes - but we need your help. 
  • Action/Deployment: Train staff to acknowledge people as they come in the store. This DOES NOT mean saying the same rote greeting to everyone who enters. It DOES mean acknowledging each customer as they enter – because then staff can do that quick assessment and will know what to do next: i.e. smile and nod; say a friendly ‘Hello’; or immediately approach the customer and offer help.
Make sure staff who are re-stocking or otherwise on the floor are on the lookout for this group and that all employees have name tags - because otherwise, the staff look like customers and the real customers don’t know who to ask for help unless the employees are standing at the counter.

This kind of evaluation and management action results in:
  1. Customers served in ways that best suit their needs,
  2. Employees increasing and improving their own experience and skill-sets in serving different customer types, and
  3. Increased morale and motivation for employees based on job satisfaction and, where applicable, increased commission.
Simultaneously, the company gains:
  1. Happy customers relating their positive experiences to others
  2. Successful salespeople who get better at their jobs with each customer interaction
  3. Staff who have the skill and energy to repeat great service time after time...
...all of which leads to higher productivity, sales per employee and profitability.

After all, you’re using the same number of sales staff but ensuring their time is well-spent targeting those customers who will generate sales as a result of the interaction.

This store is part of a successful chain with over 20 stores. They carry quality merchandise, their prices match those of their competitors - and it was Christmas, when the competition is particularly fierce. Had the staff known how to evaluate those of us in the store and interacted with us accordingly, faster sales and more cheerful customers would have been the result.

I expect that a number of sales that they lost wouldn’t have walked out the door either.

It’s worth taking the time to do the kind of evaluation described here - and to train your staff to look at who your customer groups are, why they most likely came into your establishment and how best to fulfill their needs. That way, the minute they walk in the door, they’ll be met with a customer experience they won’t expect - and will never find from your competitors.
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