dc lecture ten : customer service and retail selling

MKTG 1058:

DISTRIBUTION

CHANNELS

11

Distribution Channels MKTG 1058

LECTURE TEN

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(Dunne Chapter Twelve)

Customer Service and

Retail Selling

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Learning Objectives for Chapter 12 (Dunne)Learning Objectives for Chapter 12 (Dunne)

•Explain why customer service is so important in retailing.

•Describe the various customer services that a retailer can offer.

•Explain how a retailer should determine which services to offer.

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Learning Objectives for Chapter 12Learning Objectives for Chapter 12

•Describe the various management problems involved in retail selling, salesperson selection, training and evaluation.

•Describe the retail selling process.

•Understand the importance of a customer service audit.

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Customer Service Today…Customer Service Today…

The old rules about customer loyalty are obsolete. Today's customers define loyalty on their terms; no t the retailer's.

� The average firm loses half of their customers ever y five years.

� High-quality service is defined as delivering servi ce that meets or exceeds customers' expectations. In t his definition there is no absolute level of quality se rvice, but only service that is perceived as high quality because it meets and exceeds the expectations of customers

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A Shopper’s WishA Shopper’s Wish

Please…

� Let me find a parking place near the store

� Do not let me pay too much

� Have the sales staff pretend that they care

� Do not make me have to return anything

� Get me in and out as fast as possible

� Do note make me have to wait in line to make my pur chase

� Let this experience be somewhat enjoyable

� Do not make me have to deal with other obnoxious sh oppers

Exhibit 12.1

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Customer ServiceCustomer Service

•High-Quality Service is the type of service that meets or exceeds customer’s expectations.

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� Nordstrom, by providing high-quality customer service, has become a leader in relationship retailing and has many loyal long-term customers.

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A Shopper’s WishA Shopper’s Wish

Exhibit 12.1

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�Relationship retailing:

Comprises all the activities designed to attract, retain, and enhance long-term relationships with customers.

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Three Basic Tasks of RetailingThree Basic Tasks of Retailing

Exhibit 12.3

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Retailers are now engaging in relationship retailing programs…Retailers are now engaging in relationship retailing programs…

� These are designed to attract, retain, and enhance long-term relationships with the customers.

� High performance retailers can develop these relationships with their customers by offering two benefits:

a. financial benefits that increase the customer's satisfaction, such as the frequent purchaser discou nts or product upgrades already offered by some supermarkets, airlines, and hotels and

b. social benefits that increase the retailer's soci al experience with the customer

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Retailers can improve their competitive standing:Retailers can improve their competitive standing:

�the ease with which a potential customer can shop or learn about the store's offering

�the ease with which a transaction can be completed once the customer attempts to make a purchase

�the customer's satisfaction with the transaction

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� Customer service:

Consists of all those activities performed by the retailer that influence (1) the ease with which a potential customer can shop or learn about the stor e’s offering, (2) the ease with which a transaction can be completed once the customer attempts to make a purchase, and (3) the customer’s sati8sfaction with the transaction.

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� Transient customer:

Is an individual who is dissatisfied with the level of customer service offered at a store or stores and i s seeking an alternative store with the level of cust omer service that he or she thinks is appropriate.

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•Merchandise Management

•Building and Fixture Management

•Promotion Management

•Price Management

•Credit Management

•A Recap

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•Merchandise Management: Keep in stock the merchandise a customer wants.

•Building and Fixture Management: Heating and cooling; availability of parking spaces; ease of finding merchandise; layout and arrangement of fixtures; placement of restrooms and lounge areas; location of check-cashing, complaint, and returns desks; lighting; and width and length of aisles.

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•Promotion Management: Provides customers with information that can help make purchase decisions.

•Price Management: Clearly marked and visible; fair, honest, and straightforward; and true price of credit.

•Credit Management: Both in-house and bank card, should also be integrated into the customer service program.

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Questions to assess whether a retailer’s promotion is serving the customer:

• Is the advertising informative and helpful?

• Does the advertising provide all the information th e consumer needs?

• Are the salespeople helpful and informative?

• Are the salespeople friendly and courteous?

• Are the salespeople easy to find when needed?

• Are sufficient quantities available on sales promot ion items?

• Do salespeople know about the ad and what’s being p romoted and why?

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Common Customer ServicesCommon Customer Services

•Pre-transaction Services

•Transaction Services

•Post-transaction Services

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Pretransaction Services are services provided to the customer prior to entering the store.

� Convenient Hours - The more convenient the operating hours of a store are to the customer, the easier it is for the customer to visit the store. A store's hours of operation depend on customers' demand, profitabilit y, competitor's hours of operation, and legislation.

� Information Aids - Retailers may offer counseling lessons or booklets, to customers, on how to use, operate or care for a product; items such as these help customers to enter into intelligent transactions

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Transaction Services are services provided to customers when they are in the store shopping and transacting business.

•Credit

•Layaway

•Gift Wrapping and Packaging

•Check Cashing

•Personal Shopping

•Merchandise Availability

•Personal Selling

•Sales Transaction

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•Post-transaction Services are services provided to customers after they have purchased merchandise or services.

•Complaint Handling

•Merchandise Returns

•Servicing and Repair

•Delivery

Post-transaction ServicesPost-transaction Services

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Retailing TruismRetailing Truism

•A retailer’s job isn’t over when the cash register’ s bell rings.

Discuss the implications of this statement.

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Six Rules to Follow WhenHandling a Customer’s ComplaintSix Rules to Follow WhenHandling a Customer’s Complaint

� Acknowledge the importance of the customer. Before the customer even begins to explain his or her problem, acknowledge that the customer is important by telling him or he r that you are there to help. Try to ease the customer’s frustrat ion.

� Understand the customer’s problem. Ask all the que stions needed to completely understand the situation. Det ermine the responsibilities of each party and what went wrong. Do not assign any fault at this stage.

� Repeat the problem (as you understand it) to the cu stomer. Without interrupting the customer, paraphrase the p roblem as you understand it.

Exhibit 12.4

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Six Rules to Follow WhenHandling a Customer’s ComplaintSix Rules to Follow WhenHandling a Customer’s Complaint

� Think of all possible solutions. Using your creati ve powers, think of all possible, even wild, solutions that could re medy the problem.

� Agree on the solution. Determine the solution that is fair to both parties and then have both parties agree to it.

� Above all, make sure the customer leaves feeling as you would want to feel if you were the customer. If you woul d not be satisfied with the solution if you were the custome r, start over. Remember, it is better to lose a little now than to take a chance on losing a customer for life.

Exhibit 12.4

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Factors to Consider When Determining Customer Services to OfferFactors to Consider When Determining Customer Services to Offer

Exhibit 12.5

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Determining Customer Service LevelsDetermining Customer Service Levels

• Retailer’s Characteristics include store location, store size, and store type.

• Competition: Services offered by competitors will h ave a significant effect on the level and variety of cust omer servicesoffered.

• Type of Merchandise can be an indication of the typ es of services.

• Price Image: Expectation of more services from a hi gh-price image than a discounter.

• Target Market Income: Higher income of target marke t, higher theprice.

• Cost of Services: Know the cost to estimate additio nal sales to pay for the service.

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How the Retailer’s Sales Force Meets the Expectations of Both Vendors and CustomersHow the Retailer’s Sales Force Meets the Expectations of Both Vendors and Customers

Exhibit 12.6

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Question to PonderQuestion to Ponder

•How can e-tailers differentiate themselves from other e-tailers, brick & click retailers, and brick & mor tar retailers based on service assortment?

Think of how this is possible when there is no face-to-face service encounters.

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Retail Sales ManagementRetail Sales Management

•Types of Retail Selling

•Salesperson Selection

•Salesperson Training

•Evaluation of Salespeople

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Types of retail selling:Types of retail selling:

Types of Retail Selling

1. Order takers - Retail employees who do not actively sell but rather assist in completing a transaction after the customer decides what to purchase

2. Order getters - Retail employees who are involved in conversing with prospective purchasers for the purpose of making a sale; they inform, guide and persuade the customer. Retailers with high margins and high levels of customer service should emphasiz e this.

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Types of Retail Selling it is generally true that:

•Retailers with high margins and high levels of customer service place more emphasis on order getting.

•Those with low margins and a low customer service policy tend to emphasize order taking.

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Salesperson Selection:•What Criteria To Use?

•Predictors

•Demographics

•Personality

•Knowledge and intelligence

•Experience

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Salesperson Training: the most important skill the retailer can teach is common customer courtesy.

•Retailer’s Policies

•Merchandise: retailer may suggest becoming familiar with the competitor’s offerings and their strengths and weaknesses.

•Customer types

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Training:Training:

� Retailer's Policies - Salespeople should be knowledgeable about policies relating to the establishment's operation, as well as those that af fect their employment status.

� Merchandise - Salespeople should be familiar with th e strengths and weaknesses of a retailer's and its competitors' merchandise, warranty terms and the reputation of manufacturers of the merchandise

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Customer Choice Criteria

•No active product choice criteria

•Inadequate or vague choice criteria

•Choice criteria in conflict

•Explicit choice criteria

See Exhibit 12.7 on page 429

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Customer TypesCustomer Types

Exhibit 12.7 – 1 st 3 Types

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Customer TypesCustomer Types

Exhibit 12.7 – next 3 Types

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Evaluation of SalespeopleEvaluation of Salespeople

Performance Standards

�Conversion Rate is the percentage of shoppers that enter the store that are converted to purchasers.

�Sales per hour

�Use of time

�Data Requirements

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The Retail Sales ProcessThe Retail Sales Process

A. Prospecting is the process of locating or identifying potential customers that have the ability and willingness to purchase your product.

B. Approach

C.Sales Presentation

D.Closing the Sale is the action the salesperson takes to bring a potential sale to its natural conculsion.

E. Suggestion Selling

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Selling Process in the Retail EnvironmentSelling Process in the Retail Environment

Exhibit 12.8

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Exhibit 12.8

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Exhibit 12.8

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Exhibit 12.8

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Exhibit 12.8

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Some Closing Signals theSalesperson Should Be on the Lookout ForSome Closing Signals theSalesperson Should Be on the Lookout For

� The customer reexamines the product carefully.

� The customer tries on the product (i.e., trying on a sport coat or strapping on a wristwatch.

� The customer begins to read the warranty or brochur e.

� The customer makes the following statements:

� I always wanted a compact disc player.

� I never realized that these were so inexpensive.

� I bet my wife would love this.

Exhibit 12.9

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Some Closing Signals theSalesperson Should Be on the Lookout ForSome Closing Signals theSalesperson Should Be on the Lookout For

� The customer asks the following questions:

� Does this come in any other colors?

� Do you accept Discover cards?

� Can you deliver this tomorrow?

� Do you have a size 7 in this style?

� Do you accept trade-ins?

� Do you have any training sessions available?

� Do you have it in stock?

� What accessories are available?

� Where would I take it to get it serviced?

� Is it really that easy to operate?

Exhibit 12.9

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Characteristics of a Top Retail SalespersonCharacteristics of a Top Retail Salesperson

1. BELIEVE IN YOURSELF: A retail salesperson must have that self-confidence to keep going when everything is going wrong. After all, your custome rs will believe in you if you believe in yourself. If you don’t believe in yourself, why should they believe in you. There will be days when selling is easy, the customers will want everything you are selling. However, the key is handling those days when everything is going wrong.

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2. BE WILLING TO WORK HARD: Retail selling is really a job demanding hard work if you are going t o be good. Don’t waste time when customers aren’t in th e store. Learn about your merchandise, go over your sales records, and call your “key” customers on the phone to see if they need anything.

Remember the old saying, “The harder I work, the luckier I get.”

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3. HAVE PERSEVERANCE: The person that has the ability to persevere and take ups and downs of sell ing in stride will find an increasing number of opportunities. All too often salespeople may becom e frustrated due to the many things occurring that th ey can’t control.

A salesman used to call on my father’s store with m erchandise targeted too high for his target market. After a f ew years of this, my father asked him how long he was going to continue to call on him, since he consistently turned down h is merchandise line. “Well,” he said, “it depends on w hich one us dies first . . .”

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4. HAVE RESPECT FOR THE CUSTOMER’S GOOD SENSE: Don’t try to trick the customer. You might w in the battle by getting the sale, however, you will l ose not only the war but the customer as well. Find ou t what the customer needs and get it for him.

An example would be where after exhausting all sources of possible supply for the customer, the solution cant be found; the retailer then points hi m towards other retailers who could meet his requirements. Imagine the positive good will generated.

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5. BE FLEXIBLE: The ability to adjust to the ever-changing needs of the situation calls for flexibili ty. The salesperson must have the willingness and enthusias m to do whatever is necessary (although not planned t o make the sale. If one approach or sales presentati on doesn’t work, try a different one.

It is fine to live on high expectations. However, if the realities of the situation tell you otherwise, be f lexible enough to try something different.

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6. BE DECISIVE: No two selling situations are the same. The ability to make rapid decisions, and to render judgments, and take action until the sale is completed is decisiveness. Every salesperson could probably make better decisions if more time were available. However, more time is frequently unavailable because of the types of customers a salesperson must deal with.

Remember, a salesperson must be able make decisions quickly, confidently, and correctly in or der to be successful even if perfect information is not al ways available.

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7. BE ABLE TO HANDLE STRESS: The retail salesperson must be able to perform consistently under pressure and to thrive on constant change and challenge.

The failure to handle stress is a major reason peop le give up on retail selling as a career. They tend t o focus on the failures and not on the satisfaction to be g ained from helping a customer solve a problem.

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The Customer Service and Sales Enhancement AuditThe Customer Service and Sales Enhancement Audit

Customer Service and Sales Enhancement Auditprovides management with a detailed analysis of current sales activity by location and by selling a rea.

� Identify service, salesmanship, and sales enhancement methods to produce more sales.

� Target the methods by the store and selling area to produce most significant improvements.

� Determine added sales by improving service level, salesmanship, and sales enhancement programs.

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The Customer Service and Sales Enhancement AuditThe Customer Service and Sales Enhancement Audit

� Basic Service:

� Customer contact

� Salesperson-initiated contact

� Customer acknowledgement

� Salesmanship :

� Merchandise knowledge

� Needs clarification

� Active selling

� Suggestion selling

Sales Enhancement:

•Impulse purchasing

•Walkouts

Past Year Examination Questions

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Chapter Twelve: Customer

Service and Retail Selling

May 2006

April 2009

dc lecture ten : customer service and retail selling

Business

level of customer service

highquality customer

customer service audit

customer service program

customer loyalty

customer attempts

potential customer

various customer services