Customers are working harder, so retailers must too
Positive impact of the feedback huddle
It is no secret customer behaviour is changing and retailers need to react. But how do you track customer opinion? Annich McIntosh talks to Gary Topiol, of Empathica and Steve Marson of Halfords on how one particular system works in practice.
Analysing what makes a difference to customers
The figures speak for themselves. 30% of customer shopping research is now carried out online. Four out of five people know what they want to purchase before they enter a store. The majority of people are prepared to price check before making a purchase.
This is all now accepted behaviour. Not even the supermarkets, with their established loyalty schemes and their low price guarantees have proved immune. Tesco for example posted pre-Christmas trading figures that shocked the market and caused £5bn to be sliced from its stock value. Its sin? Tesco like for like turnover was down 2.3%, possibly because it backed off on offers and coupons. And making comparisons such as on www.mysupermarket.com, customers voted with their feet.
In a recession, customers work harder to buy carefully, and technology is making this easier to achieve, but there has to be more to retail success than just the lowest price. There is, after all, the customer experience.
While most people will be happy checking out the lowest price for an item that won’t vary, such as a book or the weekly groceries, other things then come into play, even when money is tight.
Talk air travel, for example. Ryanair has built a considerable business offering cheap flights, but Gary Topiol, MD of customer service management provider Empathica, posed the telling question: “How much more successful would they be if Ryanair staff loved their customers?”
Empathica is a Canadian company that opened a division in the UK five years ago. It provides an alternative to mystery shoppers, in that it provides feedback for retailers based on actual customer surveys of their experience. Topiol explained: “Mystery and exit surveys are anecdotal, and usually only provide monthly feedback. They are also slow and expensive and provide the opinions of just one person, the mystery shopper, rather than real customers with real experiences.”
Working with the retailer to ascertain what they would like to find out, Empathica usually tries to hone into the “one thing” that would make a difference in that particular store. In general terms, this usually means increasing staff knowledge and interaction with the customer to improve their buying experience.
The challenge recently, is that the customer has been interacting with the retailer through multiple channels. They may have researched online. They may still be doing this research via their mobile phone when they enter the store. They may have tried something instore, and then gone to order it online.
Customer experience, says Topiol, is predicated on understanding what the customer wants. So what Empathica does is to model out that experience, by collecting millions of experiences each year, and working out what the customers expect, what drives overall loyalty to that particular retailer, and to help provide some keys to understanding what are the touch points for the customer, and what are the weaknesses for the retailer.
“The brand today is very important,” said Topiol, “and there are multiple links in the chain. It has become even more important in the last couple of years. Mobile is blurring the line. People are seeking out the opinions of friends. The challenge for retailers is to use these multiple channels to gain feedback and to respond to customer opinion. Until now, call centres haven’t really focused enough on the joined up approach – the practice of click and collect.”
When people cross boundaries, it is not immediately obvious who is responsible for this sale.
“Why is it,” Topiol asks, “that if you order online, you can’t return the goods instore? Too many retailers are stuck inside different divisions. It needs an inside out view. It is critical that retailers take this approach.”
Topiol is keen to stress that conducting customer experience surveys is not just about the negatives. It is important, he says, to recognize and reward staff for what they do right and to pass on the positive messages. This, he says, means that they are then far readier to accept negative comments when they are received.
“To say, ‘you did a great job yesterday, thank you,’ is very empowering,” said Topiol, ”and if you have actual customer comments to underline that, it is a very strong message. We see the major impact the feedback huddle has over and over again. Learning what customers think about you can make a massive difference.”
Halfords Case study
Who needs mystery shoppers when you have customers?
Halfords had started on a planned road map towards achieving customer understanding. On the management table were a number of investment propositions, including mystery shoppers, staff training, and the employment of more colleagues [their word for employees].
Then after in informal chat with the operations director of Debenhams, another proposal was added to the list. That of using a consultancy to collect customer questionnaires, comments and appraisals and then analyse the results.
Steve Marson, retail operations director for Halfords, explained the scenario. “We hadn’t used mystery shoppers for eight years, but now it was a firm proposal to start using them again. But then we listened to what Empathica was suggesting and agreed to do a 17 store trial on the understanding that this was as much about finding out if we would get sufficient responses and painting a picture, as it was about taking the company on board to carry out the work.”
Marson explained his concerns: “The results from stores such as Debenhams and B&Q were impressive, but we were concerned that these had very big footfall, and we didn’t want a snapshot, we wanted the full picture.”
Marson would have been pleased with one response per store, per day. As it turned out, the level of response was far in excess of what the company expected, despite limited promotion. All they did was hand a simple slip of paper to customers with the receipt, offering them the chance to win a worthwhile prize if they answered an online questionnaire.
The unexpectedly high response to a simple marketing effort led to new questions for Marson. Now he was asking himself: ‘If they could get that response so easily, how far could they push it within two months if they really tried?’
The store managers were brought in to discuss the idea, and both they and staff were surprisingly positive. They preferred real comments, they said, from people who were actually buying goods instore, to the opinions of one mystery person, who may already have preconceived ideas and who may jump to conclusions. And it wasn’t long before the feedback was having extremely positive impact on staff.
Even part timers were logging in to the Halfords staff website with their mobile phones to see what customers had said about them, and how their store or team were doing in the ratings.
Of the five original propositions on the table, the Empathica customer analytics was the only one to be adopted by Halfords, and nearly three months from launch, an enthused Marson is still expanding his plans concerning what he wants the scheme to achieve next. Empathica has a three-year contract, and the project is to be rolled out to all 467 retail stores across the country. The debate is still taking place as to whether it will also be rolled into Halford’s 300 auto centres, but it would surprise no one if it were.
So what was the initial motivation for the scheme?
Marson wanted to track brands, find out customer feelings on an exit survey, and then carry out more detailed analytics, once the customer was sharing their thoughts online. With the customer management analytics system, he was able to determine levels of service, both throughout the week and throughout the year, and even impressively, on an hourly basis.
Halfords, rather predictably, found customers were less than happy to be served by less knowledgeable part timers at the weekend. Halfords responded to this by changing shifts about, so that more experienced full time staff were on the shop floor at the weekends. The customers liked the change and with between 35% and 40% of sales turnover taking place at the weekend, this change of view is extremely beneficial.
Explained Marson: “Halfords is positioning itself as the company that likes to help. We will change windscreen wiper blades and bulbs at a fraction of the price of car main dealers; we set up bikes for customers, we give tutorials on SatNavs and we provide information and advice. There is now a 50-50 split between full time and part time staff at weekends and we have had a very positive response to this. There was a direct correlation between customer satisfaction and our strongest and weakest times of the week. With the analytics, we could easily address this. As well as providing more experienced staff, we also postponed tasks during these busy times and moved them to other days.”
Empathica talks a lot about the importance of viewing a business from the outside in, and from the customer perspective, and the Halfords experience is a good example of this.
Said Marson: “We were able to give individual store managers feedback, and there were lots of ‘Wows!’. This won over colleagues, who were motivated by positive feedback from customers (the Wows!) and made it easier for us to introduce any critical comments. Our stores are very competitive with each other, so when effort and energy was rewarded immediately, this was very effective.”
Rewarding the Wows!
So are staff rewarded financially for their Wows!? Marson says this really isn’t necessary because the goal is recognition within the team.
As well as the Empathica internet survey, Halfords also kept its instore paper form for customers to fill in if they wished, but this is handled by the instore customer service team and not by Empathica. There is not currently any pooling of the data, although Marson says it is on his radar.
Feedback has proved especially important during the last couple of years of recession, when customer behaviour has changed quite dramatically. Said Marson: “Behaviour changed initially two years ago and if anything, customers have become even more demanding. They want value and the challenge for all of us is to provide it. So we are making the best of the situation, in order to provide services others don’t. The value in Halfords is about not only the product, but also about the service.”
Responding to changing practices
Halfords is a good example of a retailer that has had to respond to changing consumer practices. Gone are the days of the DIY motorist, who was able to fix most things themselves, but by adapting, it has carved out a niche as the DIFM (do it for me) retailer, who can fill an important gap in service.
So what about the criticism that questionnaires prompt certain answers, and that customers say what firms want them to?
Marson says the team constantly reviews all questions, and adapts those they feel are skewing the answers.
“There are quite valuable prizes to be won by those filling in the survey, so there is always the chance that customers respond positively because they think this will help their chance of winning. This is not the case,” said Marson, “but we allow for that.
“Empathica’s analytics results are slightly more positive than those received from our instore paper questionnaires, but not unduly so. The benefit of the analytics is that we can introduce specific questions when we want that help our product and development teams. If we have a new concept, we can add a new question. There are lots of opportunities for the future.”
To Marson’s surprise, there was not a preponderance of younger people filling in the surveys, and the demographics reflected that of the customer base, which is 60% to 70% men.
Said Marson: “We are clearer than ever before who our customers are and what they think about us. The challenge now is about using all of this.”