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Lean Retailing: A Total Focus on the Customer

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Success in the retail marketplace depends on the quality of interactions that take place on the floor between sales associates and customers. We'll present examples of sales associate interactions and behaviors with customers that build sales as well as kill sales. Lean thinking and Lean work processes can dramatically improve the quality of these interactions.
Success in the retail marketplace depends, more than anything else, on the quality of interactions that take place on the floor between sales associates and customers. Lean thinking and Lean work processes can dramatically improve the quality of these interactions. This podcast provides examples of sales associate interactions with customers that build sales as well as example of interactions that kill sales. The sometimes very subtle differences between sales-building and sales-killing behaviors are noted. Two of the core beliefs that drive Lean thinking, as described by Henry Ford, are discussed in regard to their special relevance to retail sales. Finally, this podcast introduces two Lean performance improvement processes that will be addressed in detail in the next Lean podcast in this series on the relationship between Lean thinking and retail sales. Applying Lean techniques will transform the behavior of retail store employees and, as a result of this process, provide customers with indelible impressions, the kind of impressions that build sales and drive customer loyalty.
Duration: 17:11 Audio MP3
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Transcript

Last week, as I was checking out at a large drug store in my neighborhood I was, once again, treated like a non entity by the sales associate. You know. No eye contact. No "thank you." No nothing. I'm not sure what happened but I just couldn't take a pass on this opportunity to find out why I, a customer - the person paying this sales associate's salary - was being treated this way. I asked him, "Don't any of you folks say 'Thank you' anymore?" He replied, "It's printed on the receipt."

For some reason, this completely out-of-left-field comment, and, for that matter, this demonstration of amazing candor, made me think about customer service training I did some years ago, during which we discussed situations just like this one, situations in which the customer is treated like a non-entity. As I recall, I launched our discussion with a story like this one. "Remember me? I'm the person who goes into a restaurant, sits down and patiently waits while the waitresses do everything but take my order. I'm the person who goes into a hardware store and stands quietly while the sales clerks finish their chit-chat. You might say I'm a good guy. But do you know what else I am? I'm the person who never comes back and it amuses me to see you spending thousands of dollars every year to get me back into your store when I was there in the first place and all you had to do to keep me was give me a little service, show me a little courtesy."

And I thought about how incredibly obvious bad customer service is ... and how incredibly obvious great customer service is. I mean, really, "It's printed on the receipt."? C'mon, this kind of a slight can't be intentional, can it? It had to have come from someone whose mind was on auto pilot, didn't it? It had to have come from someone who was almost totally disengaged from their work, a person for whom this work at this moment had virtually no meaning, a person for whom this work at this moment was in no way connected to anything that he valued, to anything that he thought was important. It was work that was far on the periphery of his life. And that's where work is for a large percentage of the millions of individuals who are interacting with customers on retail sales floors and, as a result, effectively killing sales. The challenge is clear: How do we move the experience of work from being on the periphery of an individual's thinking to being in the core. More about that later in this podcast and the next podcast in this series.

Let's look at some more examples of the kind of treatment customers are subjected to by individuals who are presumably hired to sell products or services. I'd suggest that reflecting of these types of experiences is a very important first step for any manager or supervisor as they prepare to lead transformations of the performance of the retail sales associates they supervise.

Why is this so? I believe that you and I, being typical consumers, have become effectively desensitized to really bad customer service. Bad customer service is, frankly, so commonplace that we've come to accept it as virtually the norm. And, I'd suggest, that to the degree that this has happened to the managers and supervisors of retail sales associates, as it surely has, that their expectations regarding the behavior of the folks they're supervising has been significantly degraded. The experiences they've had as customers have shaped the expectations they have as supervisors.

These expectations, your expectations if you manage retail sales associates, have to be raised. A first step to take in raising expectations is to reflect on our own experiences as customers, both the good and the bad. And, in the process of doing this, we need to reflect on the impact these personal experiences have had on our individual buying behavior. We can be sure that our reactions to good and bad treatment when we are the customers are exactly the same as the reactions of our customers. When we encounter retail sales associates who are not totally focused on us, the customer, we need to really remember what the experience felt like, we need to remember the impact it had on our thinking, and we need to resolve to do what it takes to make sure that these types of experiences aren't replicated in sales encounters our customers have with our employees.

And they don't have to be. As I've suggested in earlier podcasts in this series, Lean thinking and Lean work processes can transform the behavior of retail sales associates, causing them to interact with customers in ways that are very powerful sales builders and drivers of customer loyalty.

But first, we need to sharpen our personal expectations. Here's a request to each of you listening to this podcast. Before you listen to next week's podcast, resolve to be especially observant of ways in which you've been treated as a customer and the impact these experiences would have on your future buying behavior. Jot down some notes about really bad experiences and really good ones. Think about what made the good feel so good and the bad feel so bad. And think about your employees interacting with your customers in exactly the same ways as you've just experienced. And, finally, think about the contribution these kinds of behaviors, the good and the bad, make to your bottom line.

Studies have shown that 96% of unhappy customers never complain about rude or discourteous service, but 90% will not visit or buy from that place again. How many of your customers are silent but unhappy with the treatment they've received? What's the cost of losing the business of 90% of these customers?

Let's looks at some more examples of sales-killing and sales-building encounters with customers; the kind I'm asking you to look for and make some notes about before next week's podcast.

A couple of weeks ago, my wife, Dolores, and I were in a large retail clothing company. Dolores asked a sales associate, "Could you help me in the shoe department or help me find someone who can help me?" He replied, 'Beats me, I don't know where they are'" as he sauntered off. More recently, we were going through checkout at a local supermarket. I asked the persons checking us out, "How's it going?" She replied, "I'm going to get as far away from here as I can get." If a person tried to script sales-killing comments, it'd be tough to beat these two. Are your sales associates saying things like this to your customers?

Extending beyond the retail sales floor, I thought about a call I'd made several years ago to a major computer hardware supplier from whom the company I was with was planning to make a significant purchase. I asked, "Could I speak to Jane Smith?" The person answering the phone replied, "I'm sorry, she's not here." I asked, "Would you take a message?" She said, "Yes." I said, "Ask her to call George Friesen at 314-303-0612." She said, "Okay." I asked, "Will she return my call on Monday?" The reply was "I don't know," My response was "Will she return my call next week?" She said "I don't know, sir. She just leaves and doesn't tell us where she's going or when she'll get back."

How's this kind of a response to a customer possible? What kind of thinking or lack of thinking makes it possible?

I contrasted this experience with one I had years ago when I was Director of Professional Development at a large Midwestern university. We were marketing a series of seminars nationwide and I recalled calling a hotel in Little Rock and asking a person in their sales office how many people had registered for our seminar. She replied, "Looks like we have 18 registrations for your program." I responded, "Thanks have a good day." She came back, quickly, "You know, your program really looks good. I put a brochure on the front desk and have told some of the business groups that meet here about it." I said, "I really appreciate your help." She responded, "Glad to do it. Wonder if you could send me 25 or so brochures. I'll mail them to people I know in Little Rock who might be interested in your program." Wow! What a totally customer-focused comment made by an employee who was fully engaged in the work of the moment.

I've also thought about customer loyalty programs, reward programs, you know the one's that require us to carry cards signifying, if not our allegiance to a particular place, at least our intention to spend a fair amount of money there. And I've thought about the rules that govern some of these loyalty programs such as one program that issues awards ... like a free bagel, for example ... and then, without notice, take the award away on expiration dates that are never clearly explained to the customer. What's the impact of this rule? A satisfied customer is transformed into an annoyed customer.

I also thought about an encounter Dolores and I had just several days ago at a large bookstore chain whose customer loyalty card we carry. We had made a mistake with a cook book we had purchased for a Christmas present for our daughter and wanted to return the book and exchange it for the one we should have bought. We approached a sales associate, with the book in their store's bag and told him we'd like to return it. He seemed hesitant in responding to our request so I took the book out of the bag and noted that it still had their store's barcode and price on it. He asked, "Do you have a receipt?" I said that we didn't but that that it was obvious that the book came from their store. His response was crisp and unsmiling, "No receipt. No return." Forget about the stupidity of this policy. Couldn't he at least have said "I wish I could take this back, but I can't?" Of course, he could have. And he would have if he was engaged in his work; if he was focused on us, the people paying his salary. But he wasn't.

Just what is it that distinguishes behaviors, or policies, that are conspicuously unfriendly to customers from those that create customer loyalty and, as a result, build sales? As I've suggested in earlier podcasts, it's all about focus. Focus on why the customer is important. Focus on how to please the customer. Focus on what it takes to provide customers with experiences that drive sales and drive customer loyalty. And, if you're a store manager, it takes a focus on those things that you need to do to ensure that your sales associates will interact with customers in ways that build sales rather than ways that destroy sales. It takes sales associates who interact with customers in exactly the same ways that you personally want to be interacted with when you're a customer.

Henry Ford, as I've noted in earlier podcasts, was in many ways the father of Lean thinking and Lean work processes. In his writings, Ford makes two comments that are especially relevant to the situations I've just been describing. They are:

"It's not the employer who pays the wages-the employer only handles the money. It is the customer who pays the wages."

and

"Quality means doing the right thing when no one is looking."

Ford never forgot that pleasing customers had to be the prime directive governing any company if it was to be successful. And this prime directive - pleasing the customer - had to be the yardstick against which the efficacy of all policies and procedures had to be measured. Ford also understood that the only way a manager or supervisor could be confident that the employees they supervised would exhibit behaviors consistent with this prime directive was to be confident that the beliefs driving these behaviors had become the individual beliefs of the employees. He had to know, just as you have to know, that the people you supervise are having high quality interactions with your customers. And the only way you can know this is if you know that they value quality and know what quality means.

In next week's podcast, I'll be sharing some thoughts about very specific actions you can take to begin the process of transforming the quality of sales encounters your employees have with your customers. We'll be considering the power of observation and reflection, on your part as well as the part of your employees. Specifically, I'll be referring to a "Standing in the Circle" process developed by Taiichi Ohno, the Toyota manager who built the Toyota Production System. Ohno built the Toyota Production System upon a foundation provided by the writings of Henry Ford, extending Ford's thinking through the application of this own great creative abilities into a performance improvement system that is now the standard for the world, across all types of work environments.

I'll also be referring to a book just written by Hubert Dreyfus of the University of California-Berkeley and Sean Kelly of Harvard University entitled "All Things Shining" and I'll be suggesting that Kelly and Dreyfus have made some observations about the behavior of human beings that have direct and powerful potential when applied to the topic you and I are focusing on in these podcasts: Transforming the behavior of retail store employees and, as a result, providing your customers with what I've described in earlier podcasts as indelible impressions, the kind of impressions that build sales and drive customer loyalty.

We at CBIL can partner with you in making this happen and I'd greatly appreciate having the opportunity to discuss the ways in which our consulting and training resources could go to work for you now in driving this kind of transformation. Call me, George Friesen, at 314-303-0612. Anytime. Let's talk.

And be on the lookout for those experiences that you and I have daily that either build sales or kill sales. If you have the time, send me an e-mail describing either of these types of experiences that you've had as a customer. And have a great week!