A failure to approach returns the way you approach sales is causing you to lose customers. I don’t want to sugar coat that fact because, not only is this a serious hole in most business strategies, but this gap in customer service is fixable. When you consider the cost of attracting a new customer—which is five times greater than the cost of keeping an existing one—why wouldn’t you fix something that’s costing you so much money?
By training your staff to effectively manage customer returns, you can reduce incidences by up to 25 percent. Often this means sending the customer home with the very product they intended to return. We’ve developed four simple steps to help you train your employees to best handle returns and ensure customer satisfaction.
Originally published in Twice Magazine
You approach the service counter of a typical retailer, any retailer, armed only with a defective product and the extended service you purchased on it. You recall back one year ago when you purchased the product. The sales associate spun a glowing tale of being able to take care of you and your product for an additional three years beyond the manufacturer’s warranty. You were skeptical as it was explained to you about all the time, money and headaches that you would avoid if you bought their service contract. By the time they were done you were sold. You wanted the plan, you needed that plan. It was pricey, but the peace of mind it provided was well worth the investment. Besides, the sales associate was just so darn sincere.
Fast-forward one year. As you make the long walk to the customer service counter, it starts to resemble a scene right out of a Clint Eastwood western. You receive a steely look from the person working behind the customer service counter. You imagine yourself in the center of town on a lonely, empty street while tumbleweeds roll by.
Originally published in Twice Magazine
Ever notice how customer service and New Years resolutions seem to go hand in hand. Did you know that 2 of the most common New Year’s resolutions are 1.To get into better shape 2. Lose weight or to go on a diet. Both of those are exemplary goals but did you also know that of all the people who flood the health clubs in January only 25 % of them are still there on a regular basis in May. And the 90% of all people that were going on that New Year’s diet are off it by February! So have you deduced the connection to customer service?
Originally published in Twice Magazine
I find it amusing how some retailers talk about their extended warranty program. It seems to me that they think of it as this "thing", that generates a lot of money, but no one should talk in the open about. If you have a good program, that truly takes care of the customer, then why the apprehension? Good extended warranty sales should translate to greater customer loyalty. The more satisfied the customer is, the more likely it is they will be back to shop in your store.
The next logical question is, "What makes for a good extended warranty program?" Here are some of my ideas for an extended warranty program that can achieve profitability for the retailer while offering superior service for the customer.
Are you offering the customer a comprehensive plan?
What does your plan cover? Usually a salesperson will tell me it "covers full parts and labor." I ask them what that means. They usually tell me it means "we cover parts and labor...fully." If however I say we cover normal wear & tear, dust, or power surges, I have just offered the customer something tangible. If your coverage does not include these benefits and others like them, it should. It's an easier sell when I can explain, in detail, what the plan is going to cover on the product, instead of using vague terminology. The cost may increase to add this type of coverage, if you currently do not offer it, but the additional sales would make it worth it.
How often do you train?
Increase extended warranty sales by teaching new hires the program before they get on the floor. When a new hire receives proper training on what an extended warranty is and how to sell it, they almost always succeed. Training should occur during the orientation of your new hires. It could be a worksheet, CD ROM, or training video. When interviewing a potential sales person, you should let them know they are expected to offer these plans to the customer with an expected success rate. One manager told me that during the interview he had the person attempt to sell him a plan. He is not looking not for the ideal presentation, but eye contact and their ability to communicate.
Offer a Replacement Plan on less expensive items:
A replacement plan is a great way to increase revenue. Many retailers either do not offer extra coverage on smaller, less expensive electronics, or put little emphasis on this type of program. The plan is a great way to improve customer service and remember, today's small electronics customer is tomorrow's big screen and Appliance customer. The customer could replace it in the store, (getting them back in) or you could have them mail it to the administrator to process the claim (less work for the stores). Either way the customer is thrilled because they are getting a new product. A replacement plan does not guarantee huge profits by itself. Proper price ranges must be developed based upon product mix and customer acceptance. If you can make the price attractive, simplify the procedure, and offer superior customer service, the customer will buy it.
Are your plans priced properly:
Do you price solely on margin rate and/or rate of sale? A combination is best. If you price your plans as a value to the customer, you will make your margin goal by more units being sold. Once again, the more plans you get in the customer's hands, the more likely they are to repeat the purchase or renew their plan. Pricing must be reviewed by product line. Example: For every ten VCRs you are selling 6 plans. That's obvious to me the customer sees the value. Camcorders however, you discover for every ten sold, you are only selling two extended warranties. Are you properly priced both short term and long term when you consider renewals? If you drop the price can you increase sales enough to generate incremental margin? Is it worth it?
Become a partner with your third party administrator:
TPAs are becoming a commodity in the industry. How you interact with them can make a difference in the running of your program. Constantly challenge your TPA to develop new ideas to improve your business. You will not always use their recommendations but it should keep your program on the cutting edge. Set up regularly scheduled meetings with your administrator. Have them give you status reports. Communication between the retailer and the TPA is crucial to the success of an extended warranty program.
Selling extended warranties has become integral to the success of retailers in the marketplace today. What kind of program do you have? The best program offers your customers both value andthe outstanding customer service they have come to expect from your store. The best program that builds customer loyalty, reduces returns and keeps them coming back. To me this is what having long range success is all about. A well run, successful extended warranty program is something to be proud of.
Take an objective look at your existing program. Identify the strengths and weaknesses and discover solutions to improve it. This self-analysis will help you develop a profitable program that offers your customers superior customer service.
Originally published in Twice Magazine
What is good customer service? This is a question that many in the retail environment ask, and I've been giving it a great deal of thought.
What is the definition of good customer service? I'm not talking about return policies or ease of shopping. I'm talking about good old-fashioned customer courtesy. We spend so much time making the shopping environment high-tech and flashy that we forget what really gets us sales: If the customer likes the people in the store, they'll buy.
In training seminars, I teach one simple rule about customer service: Treat the customer like you're glad they're shopping in your store. If you can't do that, then maybe retail, or for that matter any business where you interact with customers, isn't for you.
Lately I've noticed that people don't seem to care that you're a customer in their establishment. Why do so many sales associates react like I'm bothering them when I have a question? Why does the person behind the car rental counter refuse to look up the entire time I'm at the counter? What the heck is going on?
I believe it's crucial to teach the art of being nice. A lot of companies have rules about greeting the customer within a certain time frame or space. What ends up occurring is that customers get greeted because the salesperson was told it's policy to do so. Why not teach the fact that customers like to be greeted? Or better still, why not make it policy to hire people who like to talk to people? If you need to spend a long time teaching someone how to greet the customer in a friendly manner, perhaps you've hired the wrong person.
Maybe it's a reflection on society that people aren't all that polite to each other in everyday life. I don't pretend to have the answers to society's problems. The point, sad but true, is that some people need training on the art of being nice to customers. Why? Here are some possible explanations:
Conversely, here's what you can do to change things:
Stop filling holes and start hiring the right people. Hire people you would D.I.E. to have on the sales floor, those with desire, interest and enthusiasm.
Spending millions on store design, technological advances and merchandise training is important, but you run the risk of diminishing your return on investment if you're not looking at your human resources and customer service training.
Who knows, maybe it will spill over to our everyday lives. One can only hope.
Originally published in Vision Consumer Electronics Magazine
“SORRY – OUR PRODUCTS ARE SOOOOOOO BAD WE ARE TOO BUSY TO HELP YOU NOW”
Is that the impression the consumer gets when they call your customer service number?
If it is, you need to review how much was budgeted for product returns. You did plan (remember You Gotta Have A Plan!) for the amount of product that will be returned and budget for the impact on sales, expense and cash flow didn’t you?
A recent survey of consumers showed that more than 70% of them regard a toll free Call Center to be very or extremely important when they have a question or a problem. Only 5% considered a web site as an important source that they would use to find answers to their questions.
Just like in sports, retail has many competitors but only a few great teams. Did you ever wonder why the Chicago Bulls are able to play to a sold out stadium night after night? It's because the fans know their team has an excellent chance of winning every game. Chicago works hard at putting a great product out on the court every night. That's what makes them such a great team, they have the talent and they have the desire to dominate!
Is your company one of those great teams? Here is an easy way to tell: How is your Attendance? Do the fans (customers) return to your store like the fans in Chicago or do you find your attendance (store traffic) somewhat lacking? The customers are telling you everyday what they think of your teams customer service, by the number of times they return to your store to buy something. They are telling you in the form of better sales.
Aren't you sick of hearing all the rhetoric from people who say they believe the customer is number one? I mean if they believed it and it's their business, why aren't they giving better than just average run of the mill service? Why don’t they have better sales? Here's what one retailer said:
Average you say! Why I'll have you know I bought BUTTONS for all my people to wear that say "WE CARE ABOUT YOU" and they all wear RIBBONS that are attached to the buttons that say " ASK ME I CARE!" Why we even put up a Banner that says
"THE CUSTOMER IS #1!!" We even put signs up in the employee break room that remind them to SMILE and to treat the customer like a guest in your house. And on top of that we put a customer service committee in place. Why we are the most customer oriented retailer in the U.S.A.!!
It's obvious that this person has convinced himself, but let me ask, if his service was really this good why doesn’t he have better sales?
It's not about putting BUTTONS and RIBBONS on your people, that tell how much they care, customers want people that show they care.
It's not about BANNERS that tell the customer they are #1, heck they already know that, they're just wondering why they never get treated like #1 from your people.
It's not about putting signs up in the employee lounge reminding your people to SMILE and treat the customer like a GUEST because 80% of all signs go unread.
By now you may have guessed that better customer service and better sales has something to do with your people but it's not just about your people. IT’S ABOUT YOU!
The next time you wonder why you don’t have better sales, take a minute to look in the mirror and ask yourself "What did I do today to help my people?".
Did I recognize yesterdays best performers?
or; did I focus my attention and get upset about the non performers?
Did I recognize associates in front of their peers?
or; did I just tell them when rushing by?
Did I take time with an associate that is struggling, to listen and offer some guidance.
or; did I just figure they were a waste and needed to go away? Is this why you hired them?
Did I ask my people for their specific input on how to achieve better sales?
or; Did I just figure they wouldn't come up with anything of value and do it myself? Two heads are better than one big one. Don't overlook the value and insight of your people, they spend more time on the floor with the merchandise and customers than you do.
Did I personally hand them their paycheck this week, shake their hand and thank them for a great week?
or; Did I let someone else hand it out to them over a counter like a hamburger at McDonalds?
Did I walk the sales floor with my people and review the merchandise in depth?
or; Did I just do it myself to save time today and waste my time and sacrifice better sales in the future because I'm the only one who knows what I want or expect.
Do I know what each of my people’s goals and personal aspirations in life are?
or; Do I just think I know? You don't prejudge or make assumptions about your customer, so why would you do it with your people?
Did I set an example for my people greeting and shaking customers hands and actually wait on customers?
or; Did I just tell my people to do it. Do as I say not as I do management.
How well do you really know your people and how involved with them are you on a daily basis? You may fool yourself by saying you're involved but you won't fool your customer, because you see:
If you treat your people well they will treat your customer well.
If you treat your people as if they were the most important thing to you then they will treat your customer as if they were the most important thing to them.
If you show your people you care about them and value them they in return will show the customer they care and value them. But treat them with indifference and they will treat the customer with the same. Think about what it is you do each day with your people and challenge yourself to become more involved in their growth and the attainment of their goals. Remember you will only get better sales when you first help someone else get what they want!
Things to remember when hiring a new associate:
The day of the interview is as good as it gets! If they are trying their best to make an impression what does that impression say? How well were they dressed? Were they open and easy to talk to or were they quiet? Can they carry on a conversation and hold your interest? What you see today is what you will see on your sales floor tomorrow.
Were they a good listener? Go back and ask questions about something you explained earlier. This should tell you something about how well they will listen to your customers.
Did they express an interest in working in a particular area? If the person has no real interest and says they can work anywhere then point them to the pizza place in the mall. How good can anybody be at selling anything if they have no real interest.
Do they have ENTHUSIASM? If they don't have this then you don't want them on your floor! By enthusiasm I don't mean they have to be a cheerleader. They should have and show a desire, a fascination for the product and for selling. You can teach product knowledge but you can't teach personality, and better sales is a personal thing!
Selling is a people business, it's more than just the interaction between the customer and the salesperson, Its the more meaningful interaction between you and your people and the example you set on the floor that will determine the quality of service your customer gets and the success your business will enjoy. So the next time you ask yourself why you don’t have better sales, take a look in the mirror and see if the reason isn't right there in front of you!