WWD SPECIALTY STORES
A SPECIAL REPORT
Byline: EDITOR’S NOTE: On this page and page 14 is a special report, reprinted from WWD a Business Newsletter for Specialty Stores, a new monthly newsletter from Fairchild Publications, publisher of WWD. It will act as your survuval guide for the ’90s, providing valuable and pertinent information for specialty retailers. It will help: Increase your sales Decrease your costs Find out why some specialty stores are thriving and others are closing their doors. The newsletter will examine key issues for specialty retailers, including customer service, merchandising, promotion and advertising, direct mail, hiring and turnover, fixturing, technology, inventory control and other topics. for further information, contact Karen Bernard at 212-630-4199.
Excellent Customer Service Means Exceeding Expectations
Talk about a cliche. To the consumer and merchant alike, the words customer service are the most overused and misused in all of retailing. It seems that any customer interaction beyond taking his or her money is considered service. For too long, most of us have viewed customer service as a series of policies and procedures that are expected, such as:
Validated parking with purchase.
A thank-you note for every sale over $50.
Free gift wrapping on regular-price merchandise.
Free sleeve and bottom alterations, except on sale merchandise.
Returns allowed within 10 days with receipt and tags intact; exchange only on gifts.
Consider the following services that are not expected:
A store that prices its most expensive lingerie to include extravagant gift wrap, black-tie messenger and limousine delivery.
A store that takes Polaroids so customers can decide at home on their purchases with their spouses.
A store that takes back any unwanted wedding gifts… regardless of where they came from.
A salesperson that bakes a cake every time a good customer has a birthday+and the store arranges delivery.
A store that sews numbered tags into every garment; if the customer is in doubt about what matches what, they check the tags.
A store that has a guest storyteller once a month and baby-sits the kids while the parents catch a movie or a quiet dinner.
A gallery that furnishes videotaped artist interviews with every major purchase.
A store that tracks important customer gift days and then suggests, via fax, timely appropriate purchases.
A shoe store that tracks ages and birthdays and sends cards directly to the kids.
A store that acknowledges customer referrals with a basket of soaps, lotions and a gift certificate for a manicure.
A store that does free alterations for the life of a garment.
When a new competitor enters our market, we surreptitiously determine their policies and make quick adjustments to ours. The net effect is that we all end up doing the same thing. The first time an athlete ran a four-minute mile, it was very special+a picture on the cover of Sports Illustrated, TV interviews, product endorsements and so on. Today, a four-minute mile won’t even get you in the local paper. Thank-you notes, free gift wrapping and parking validations are no different. This is not to say these are bad ideas, but to suggest that they offer little advantage. To most customers these ideas are no longer special and, worse yet, they’ve come to be expected. There is no turning back from most service ideas. Once in place, these policies are locked in for all time. What was yesterday’s great idea, quickly becomes “the state of the art” and very commonplace.
Most specialty retailers would say that good customer service is an essential part of their store strategy. Fine. But I’m suggesting that most of what we consider good customer service is little more than the normal way of doing business. To be an effective competitive tool, customer service needs to distinguish a store. The only way to achieve this significant advantage is to change your thinking. Today’s best retailers practice service as an attitude, and not as a series of policies and procedures. These stores are focused on the needs of individual consumers. One-of-a-kind service ideas don’t come from policies; they come from looking and listening. Today’s best retailers are constantly alert for unique opportunities. A little story before we go on+
Several years ago, my wife and I spent Christmas and New Year’s Eve in Europe. On our first stop we spent several nights in a hotel renowned for its luxurious service. We paid for and expected the best and they delivered. No disappointments. Our next hotel was nice, but considerably less extravagant. But we didn’t care. The Right Bank of Paris on New Year’s Eve — what could be better? Our hotel was small, the room was small, but the price was affordable. Well, the room was great, the staff was excellent and the little gift they gave us on New Year’s Eve was totally unexpected. My wife and I were blown away. We loved Paris all the more for the hotel and its staff and we can’t wait to return. In the first hotel we got what we paid for. We expected the best and that is exactly what they delivered — no surprises and no disappointments. It was superior but it wasn’t memorable. In the second hotel we got more than we paid for. We got the unexpected. And from my perspective, that’s where specialty store customer service has to go. Most of us already do most of what others do. Our service is good, maybe great, but it’s what our customers have come to expect.
With shrinking product demand and a flat population, the only way to expand and grow is at the expense of our competitors. We need to take more of their customers than they take of ours. We can do this if we’re better and different retailers, retailers who will offer services beyond our customers’ expectations.
When attitude-service replaces policy-service, every customer presents an opportunity to excel. Predictable can be replaced by adventure. Empower your employees with the freedom to make individual service decisions. Establish the ground rules and monitor the results, but give the authority to your staff. Everybody wins… the store, the staff and most importantly, the customer. Bill Pearson is a strategist, analyst and lecturer. His company performs merchandise management and general consulting for specialty apparel retailers. Retail Analysis & Planning is located at 1625 Knollwood Drive, Pasadena, CA 91103; voice: (818) 584-9734; fax: (818) 564-8473.
Shark Marketing On a Minnow Budget
You say you don’t have the marketing manpower or the annual advertising budget of your biggest competitors? Fear not.
Effective marketing, whether you’re a shark or a minnow, comes down to three basic elements: knowing who you are, who your customers are and how to reach them. If you’re not absolutely clear on these basics, the sharks will swim away with the catch of the day.
Shark marketing is not about big budgets, slick slogans or hiring a clever ad agency. It’s a continuing exercise of alertness, analytical and intuitive thinking, assessment and action. In essence, it’s what you do every day in every way to attract and retain customers.
Testing the Waters
The coastline is jammed with other fishermen. Potential customers have to sift through the teeming waters of over 6,000 marketing messages a day! It’s up to you to make it easy for them to identify with you and to buy from you. Here’s how the smart minnows do it…
Once a year, take a day to analyze your business from a marketing standpoint. I call this the “creative strategy session” — a creative and analytical process to generate strategies that will work for you. Bring your crystal ball, your calculator and key employees from each area of your business to a conference room, away from daily distractions. You’ll also need a flip chart, lots of pens and tape to put chart paper on the wall for everyone to see and lots of open, creative thinking. The First Step in Shark Marketing Is Knowing Exactly Who You Are
Write an issue on each page of a flip chart, such as: What is our identity and our market position? How do our customers see us? What comes to mind when other people think of us? How are we different? What are we really selling?
For example, under the heading, “What are we really selling?” write adjectives that describe your product and/or service. If you sell Rolex watches, could it be that you are really selling prestige? This is how you will differentiate your business from other stores that carry similar products.
Limit your brainstorming to one-to-two hours. Identify the top three-to-five responses in each category. Create a written Identity Statement of who you are and your market position. If you don’t understand your market position it will be very hard to be successful. Now, with your Identity Statement in hand, walk through your business as a new customer. Examine your marketing collateral, business forms and cards, attire, office decor, packaging, personnel and price. Do all aspects of your business reflect the image you have defined for your company? Remember, keep focused on your position, keep it consistent and keep it long-term. Finally, write a “30-second commercial.” This is a one-to-three sentence statement of who you are, what you do and the benefit you offer to your customers. It might go something like this: “Alicia’s Bridal is the oldest bridal boutique in the state. We carry the largest selection of bride and groom fashions because… It’s Your Day.” Absolutely every employee in your company should know it by heart. Put it on your signs, add it to your business cards and invoices or make a poster out of it and place it prominently in your office. Answer your phones with it: “Thank you for calling Alicia’s Bridal, It’s Your Day+how may we help you?” The 30-second commercial is your walking, talking, 24-hour calling card. Use it.
Next month we’ll turn the spotlight on your customers — who they are and why they buy from you — and create an Ideal Customer Profile. Elaine Kennedy, Sales & Marketing Strategies, has been helping both small and Fortune 500 companies create performance-based marketing and customer service strategies since 1986.
HIRING AND TURNOVER
The True Cost Of Turnover
Employee turnover in retailing is expensive, frustrating and time consuming. But retailers can’t seem to stop the revolving door. Turnover is actually a symptom of a more fundamental problem, which begins long before retailers notice employees coming and going at an alarming rate.
Turnover is the inevitable result of mismatching people to jobs, people to companies and people to people.
For people to be productive, they must believe in themselves and their contribution. They must feel their talents and personalities are compatible with their work and their co-workers. They must believe they can use their talents.
Turnover isn’t something to fix, it’s something to avoid. But turnover, and its financial consequences, are not the problem. They are the result of failing to draw clear profiles of the employer, the job and the prospective employee, and matching them for a better fit.
Hire Right For Good Business
Can we really expect customer satisfaction without employee satisfaction? Can we continue to demand productive employees without bothering to tell them what we expect? Can managers expect to have model employees when they’ve never taken the time to construct a model of the kind of company they run…or want to run? If you’re unclear about what you want, and you don’t know how to ask for it, you probably won’t get it.
Beliefs Determine Behavior
Are strong beliefs in the company’s core values necessary for productivity? Research indicates that, consciously or subconsciously, every decision we make or action we take is based on our beliefs. Core beliefs relevant to job requirements, such as the importance of service, are necessary to performing well. Beliefs provide the “why” behind actions.
An example from our survey: Debra, a sales associate, secretly believes customers do not want to be “bothered.” After all, she hates to be bothered by a salesperson when she shops. However, she knows she must approach customers to keep her job. Her manager reminds her of this almost daily. Therefore, she approaches customers when the manager is on the floor. When he’s not, she doesn’t. She believes she’s right. In Debra’s words: “If a customer needs me, she’ll let me know.”
Beliefs govern our thoughts and our thoughts govern our behavior. What you believe is what you think, and what you think is how you act.
Many retailers shrink from discussions about beliefs, values, talents and “human nature.” Afraid to open Pandora’s box, they retreat to the safety of training programs. Beliefs and values can be changed, but not through simple training. They are fundamental human issues, as individual, and difficult to change, as personalities.
Managers in high-turnover companies (more than 75 percent) believe many employees are short-term and therefore require a minimum of management time and effort. They hire “coverage.” Employees are not coverage; they are individuals with beliefs, values, passions, talents, convictions and styles. It is this mix that makes them good at some things, bad at others.
Managers in companies with healthy turnover (less than 40 percent) believe that every individual makes a difference. They look for people whose beliefs, values and behavior are right for the company and the job. They sell the personal benefits of working for their company to potential hires. They communicate the message that even though the job may be temporary, the candidate will have an opportunity to learn basic skills and lessons that will be useful. They teach and emphasize life and job skills.
When retailers hire the right person for a job, several things happen. First, the person instinctively focuses on completing the job. Second, he or she enjoys doing the job. When the behavior required by the job does not match the behavior of the individual, the person expends a great deal of energy trying to adjust his or her behavior. This stressful process can cause sickness, absenteeism and a decrease in the quality of service and in productivity.
Four definitions are critical for effective recruiting, hiring and retention:
1. Self — Who am I?
2. Job — What are the success requirements for the job?
3. Organization — What do we believe? What do we value? How do we behave?
4. Employee/Applicant — Who is this person? What does she value? What does he believe? How does she think? How does he act?
Terri Kabachneck, csp, Principal and founder of Terri Kabachnick & Co., Inc. is one of retailing’s most sought-after productivity specialists.
ADVERTISING AND PROMOTION
Let’s Talk Radio
Radio is one of retailers’ most popular advertising media for many reasons:
Radio commercials are relatively inexpensive to produce if you don’t use an agency or commission special music.
You can reach a tightly focused group of consumers on their favorite radio station, whether it’s all-news, country and western, jazz or hard rock.
Radio is flexible. You can respond quickly if merchandise is depleted or an event changes. Most smaller specialty stores advertise on local rather than national radio and the cost depends on the market and the size of the audience. Here are a few points to bear in mind when you’re shopping around:
Ask for each radio station’s demographics and compare them with your customer profile.
Rates vary according to the time slot you select. “Drive time” — 6-10 a.m. and 3-7 p.m. weekdays — traditionally has the biggest audience and is therefore more expensive.
Run-of-station (ROS) rates are lower because the station decides when your spot will air. Commercials that can be preempted — you give the station permission to pull your ad to suit its schedule — are less expensive.
On many stations a 30-second spot can cost almost as much as a full minute of air time; you get more value with the latter.
Ask about sales on air time. Yes, radio stations have sales too!
Tips For Success
Whenever possible, reinforce radio advertising with another medium. Print particularly enhances the impact.
Concentrate your radio spots over a short time; these “flights” are particularly efective for special events or sales.
The conventional wisdom is that you need to repeat a radio spot at least three times before the message gets through.
Track your radio response by featuring specific items and measuring sales. Write A Great Script
Try to mention your store’s name at least three times in a 30-second spot, four times in a 60-second one, unless it’s a humorous ad with a punchline.
If the spot is merchandise-related, describe the items in detail to make up for the fact that there is no visual.
Make the message urgent. Talk about the product and the benefits.
If there’s no music, a 60-second radio spot should contain no more than 150 words; a 30-second spot, no more than 75.
Have some fun. Radio really lends itself to humor and a witty script will help your commercial stand out in the broadcast clutter.
Talk directly to your listeners. Open with a question to get their attention. For example: “Do you like a bargain?” or “Are you a slave to fashion?”
When more than one person is speaking in a commercial, develop characters and an amusing story line. If it’s popular, develop the ad into a series.
Develop a slogan or jingle for your store and use it consistently in your radio spots to build audience recognition.
Identify Your Customers In today’s retail climate, information is power. Know your customer and translate that power into an improved bottom line.
If you can define exactly who your customers are, you can improve business drastically. You will be able to tailor your merchandise mix to better reflect their tastes and needs, customize your marketing efforts to target them more accurately and develop additional database lists of potential customers.
Don’t be frightened by the word database. It sounds high-tech, but is nothing more than vital information that can be compiled with a well-organized filing system. If it’s on a computer, fine. But as long as you have a record, you have database.
You’ll find a wealth of information on credit card receipts. A pattern of past purchases can tell you a great deal about someone, like her preferred price point or merchandise category. The amount of money she spends over the year indicates her discretionary income.
If a lot of your customers spend mostly on career clothing, you should plan frequent executive dressing seminars and fashion shows during the lunch hour or after work. If a large number are buying special occasion and eveningwear, they’re probably active socially and would respond to fashion benefit luncheons or dinners and designer trunk shows.
When does she shop? Find out the most convenient time for your customer, and extend retail hours at either end of the day to meet her needs.
Focus groups can be a gold mine of information. Ask a cross-section of customers to take part in carefully structured discussions about your store and learn about them, their lifestyles, their likes and dislikes. Reward participants with a gift certificate or refreshments, or acknowledge their contribution in the store’s newsletter.
Questionnaires provide rich data about customers. A gift certificate is a good incentive to participants. Don’t make the questions too personal; customers are reluctant to disclose how much they earn, but are more willing to tell you how much they spend on clothes and accessories each month.
Question them about their hobbies and interests. If they like sports, activewear and athletic footwear will be of interest. Get an address for future direct mailings and invitations. If possible, obtain phone numbers, their and their families’ birthdays.
Be subtle on the issue of career; simply request a job title. If it’s “homemaker,” find out how active the customer is in community events.