The only important thing is…..
“The only important thing is that we make the children happy”. It’s one of the most memorable lines from the 1947 classic, “Miracle on 34th Street”. Replace “children” with “customers”, it is also an idea that has unfortunately faded from the fabric of American retail. In the film, the Macy’s Store Santa makes that important point to an incredulous mom after telling her that she could get the fire engine her son wanted at a competitor. Mom couldn’t believe that Macy’s would send customers to another store.
Fast forward to today and imagine Macy’s or just about any other retailer helping a customer find the thing they are looking for by pointing to a competitor. It might occasionally happen, but it’s certainly not Standard Operating Procedure. To do so would reflect badly on the store’s merchants and send business to the enemy, right? The retail would much rather send a customer away unhappy than send them to a competitor. But perhaps the retailer’s perspective is different from the customer’s? Perhaps in the customer’s eyes, helping them find what they were looking for, at a competitor no less, was an unexpected “surprise and delight“. Might that not earn a few loyalty points?
A few years ago, a major consumer electronics retailer was testing various innovation ideas in the Boston area. One of those ideas was to place a “concierge” near the store entrance with the objective of improving close rate. The job had two roles:
- Greet people coming in and direct them to destinations in the store. This wasn’t just directing customer to “go to Aisle 5”. The concierge was trained to engage the customer to learn why they had come to the store. If “assisted selling” was involved (e.g. HDTVs, digital services), they would escort the customer to that part of the store and introduce them to a salesperson.
- Engage people on the way out. If they had made a purchase, thank them. If not, ask to assist in locating the item. The concierge desk had a couple of internet terminals and the concierge would help the customer find the product they wanted on the retailer’s website. They were also instructed to help the customer search for other retailers who might carry the product if they didn’t carry it!
The concierge idea was only tested for couple of months and in that time, the close rate improved, but not enough to offset the cost of the position. With that being the company’s determining success metric, the idea wass killed. The test also included a survey of customers to get their feedback on the experience and the results were impressive. Roughly 85% of the 1200 customers surveyed felt that the concierge improved their shopping experience and, more importantly, The same percentage said they were likely to recommend the retailer to friends based on their interaction with the concierge.
While the test did not generate the targeted close rate numbers during the 60 days it was operational, customers really liked it. If the company had run the test for 6 months or a year, would the close rate improved? Who knows, but I’d argue that the improved customer experience in those stores would have resulted in higher traffic over time and that’s every bit as important as close rate.
So why are retailers so focused on the transaction and not the experience? Because it’s the fastest thing they can measure. Unfortunately, a change in the experience may not lead to improved business in a 60 day time frame and most retailers don’t have the patience or the confidence to invest in an improved experience for the long haul. Paradoxically, failure to make customer experience improvements may prove to be the downfall of a many retailers in the next few years.