Monday, June 21, 2010

Listening ain't enough!

I was checking out of a hotel in Delhi recently and as I had a meeting at 4.30pm before my flight at 9 pm, I requested the hotel that I’d like to check-out only an hour before, at 3.30pm as I had no intentions of basking in the Delhi sun! The staff at the front-desk was tentative at first, and then tried to tell me that I’d have to pay extra if I decided to extend my stay by three hours! For God’s sake, I had stayed there for three nights and was happy with the facilities that I’d even requested their sales department to get in touch with my office for a potential corporate tie-up. I wondered if I’d made a mistake!
I objected to their intention to charge me extra as I believed it was not fair. I reasoned that most hotels world-over accommodate a few hours of additional stay, especially when the occupancy rates are low, as it was the case at this hotel and considering my situation, they should not charge me extra. The front-desk staff then tried to educate me that their systems would automatically charge half-day tariffs for all check-outs after 12 noon. Now, that was the stupidest reason they could’ve used to overcome my objection. I then wished to escalate the matter to their manager, who tried repeating the same reason for having to charge me more. While I sat the manager down and explained to him how he should be controlling his computers rather than them controlling his behavior” several questions kept cropping up in my mind to be answered…. “Why do businesses always feel the urge to hide behind policy to justify not acting in the interest of customers?”; “What makes managers insensitive to their customer’s needs”; “Do they in fact empathize with their customers at all?” etc.
Are businesses missing out on something very vital to their very existence – being ‘Customer Centric’?
In another incident, I was convincing the HR head of a popular retailer to make certain investments in training their staff and he said “I don’t want to spend more than a lakh of rupees training my new recruits” “They will be gone in a few months and then I’ll have to spend on the new bunch of guys again…” he reasoned. I was only reminded of what Harry Friedman says “What if you don’t train them and they stay?!
That added a new question to my list. “Are businesses, particularly those in customer facing industries such as retail and hospitality, investing in enabling their staff to act in the interest of their customes?”
For starters, they need to start viewing things from the customer’s perspective; listen to their customers closely and align their product or service offerings in such a way that causes minimum dissonance between what the customer wants and what the business can lawfully yet profitably offer. In short; put the customer in the ‘Centre’. Make their business ‘customer centered’. I found this really simple yet practical definition of ‘Customer centricity’ on the internet. “Being Customer Centric is about an ability for everyone in the company to continuously learn about customers and the market. It is also the responsibility of everyone in the company to respond appropriately to what they learn.”
Therefore, how can retailers be more customer centric?
Retail businesses I’ve known have been slow in adapting a holistic approach to ‘learning about customers’. The least (or the most) some retailers do is to launch a loyalty program. Now, the problem with loyalty programs is that rarely if ever, do they go beyond acquiring and redemption of points for transactions made at the retailer’s stores. At times, customer information is used to invite loyalty card members to special product launches or offer them privileges such as assured parking or assured discounts. Retailers have been assuming that throwing such practical privileges will win them a permanent place in the hearts of their customer’s and absolve them of the ‘crime’ of not serving the customer in ways that matter (having the right product or the right size of merchandise etc. and helping customers make the right choices)
Are businesses listening?
Beyond loyalty programs and CRM, retailers should ask themselves the question – are we listening to our customers? It is good to have customer feedback forms – that has now become a ritual at the end of every shopping experience at a high end store; or a restaurant or an airline. I’m yet to receive a feedback from any of these sources – either thanking me for the feedback or acting upon suggestions I’ve made! If businesses have no intention to act upon what their customers are saying to them, they have no business wasting their customers’ time.
What are the various listening posts? (touch-points)
Apart from the many inanimate ways of knowing about customers – either through information from loyalty cards or from feedback forms – retailers can tap into what their sales associates find out while serving customers. I’m not sure whether retailers have formal mechanisms of capturing what their associates know. I’d believe it will certainly be a wealth of information that can yield competitive advantage when acted upon appropriately – for example; I’m sure I was not the first one who’d objected to being charged extra for a late check-out; had the hotel management been tapping into experiences of the front-desk; they should’ve long done away with such an ‘un-welcome’ policy. Budget permitting, retailers can also invest in Business Intelligence (BI) tools – both manual and digital -to capture and stream information to decision makers within the organization.
Next comes the task of ‘responding appropriately’ to what they learn.
My colleagues and I mystery shop regularly at retail outlets. Many a time, when we encounter a situation when we don’t find the right size or color of a piece of apparel; rarely do we get appropriate responses from staff – seeking to take down our contact details to inform us when they receive shipment etc.,
Excuses such as ‘out of stock’ or ‘size not available’ or ‘price not updated in the system’; ‘goods not dispatched from warehouse’ etc. are common on shopping trips. ‘Out of stock’ or ‘size not available’ could mean that the merchandisers did not anticipate demand for the style or size; or the sourcing and buying department did not release purchase orders well in time for the stocks to reach the stores. ‘Price not updated in the system’ could mean that although the merchandisers and buyers have done their job; the IT or the supply chain guys have not updated the system and hence the product cannot be billed out. ‘Goods not dispatched from warehouse’ could mean that although stock is available at the warehouse; either indents were not made on time or the warehouse has not been able to pick and dispatch the stocks as required.

Therefore,’ responding appropriately’ means, aligning the entire value chain – Sourcing; Buying, Merchandising; Supply Chain; Operations; Finance; Marketing; Information Technology and Human Resources -to meet or exceed customer expectation.

In the case of the hotel’s excuse for having to charge me excess; it is a matter of making changes to the billing software (or to the company values to begin with)
When all these functions are well equipped to meet the business demands; now comes the supreme task of enabling people within the organization to optimize utilization of resources. And ‘enabling’ begins with ‘Training’.

Training is required at all levels of a retail organization – be it a product or a service retailer - to remain consistently ‘Customer Centric’. Training store staff; that represent the brand and reputation of the company is key to superior customer service. Customer Service Associates and all other front-end staff; that comprise more than half of any retail operations team; requires a focused training on selling and customer service skills. Team leaders, floor and store managers - that may not perform active selling but are customer-facing in nature – need to be trained in not just meeting sales targets; but also running store operations smoothly deploying people efficiently. Managers with responsibilities of managing a cluster of stores need to be trained on optimizing resources and building efficient and profitable retail operations.
While ‘customer centricity’ is a key differentiator; it can be brought about by making right investments in enabling the workforce to serve customers with a heart and not merely by a policy!