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Sunday, August 19, 2012

Retailers: 7 hard truths about customers

Submitted by Dottie DeHart, DeHart & Company Public Relations, DeHartandcompany.com/

Every retailer spends a good portion of his day trying to figure out how best to serve his customers. But frankly, customers and their motivations can throw even the best retailers for a loop. Retail expert Chip Averwater lays out a few customer truths that retailers don’t want to admit. —“The customer is always right” is a mantra that business owners hear over and over again. Of course, anyone who has ever worked in retail knows this way of thinking doesn’t always hold water. In fact, sometimes customers are just plain wrong. They misunderstand products, what a store can do, how business is done, what pricing is realistic, and so on. But, says retail expert and author Chip Averwater, if you don’t want your retail store to join the estimated 95 percent of failed ventures, you’d better figure out quickly that even when the customer is wrong, he’s right.

1. Retail doesn’t get rave reviews. Sometimes the truth hurts. Take this one, for example: Most shoppers agree that the typical retail experience isn’t good. Many say they hate to shop—stores are crowded, parking is distant, help is rarely available, lines are long, salespeople don’t know the products…the list goes on. So considering the army of talented businesspeople focused on it, why can’t retail rate better satisfaction? “One theory is that consumers experience retailing almost daily and become highly discriminating in their standards,” shares Averwater.
2. Be-backs don’t come back. “I’ll be back later to purchase this!” When a rookie hears these words, he congratulates himself on a future sale. But a more experienced retailer knows that a sale has just walked out the door, probably for good. According to Averwater, “I’ll be back” is something customers say to extricate themselves from the situation without disappointing the salesperson. Even those customers who believe they’ll come back seldom do; they get distracted, lose their motivation, find other options, or simply procrastinate.“When a customer says she’ll be back or asks for a card, you should ask if you’ve shown her the correct product, answered her questions, and provided enough information,” Averwater recommends. “If she answers yes, she’ll typically say she just needs to think about it, which translates as, ‘I’m not convinced that this is the right product or best price.’ If the customer is receptive to further discussion, keep asking questions and providing information. And if she is finished with the conversation, offer to send her some literature, collect some additional information for her, or call her if the product goes on sale. With persistence, maybe you’ll convince your be-back to come back.”
3. Happy customers come and go; unhappy customers accumulate. Except for the (possible) small percentage of loyal die-hard customers you might have, your happy customers aren’t necessarily customers for life. The truth is, satisfied customers might do business with you again since you’ve proven yourself to be a trustworthy source, but you’re still only one of many. However, dissatisfied customers have longer memories and look for opportunities to warn others away. They’re expensive enemies to have “I’ve learned that it’s usually worthwhile to actively look for unhappy customers, open a dialog, and try to make up with them,” Averwater shares. “Often, a little attention turns them into equally vocal advocates. And wouldn’t you rather have one of those instead of a critic?”
4. Complaints are signs our customers want us to do better. No retailer likes to receive complaints, so it’s tempting to write them off as flukes or as feedback from people who are just determined to be unhappy. But here’s the cold, hard truth: When a customer complains, it often means many others feel the same way but don’t bother to tell us—instead they take their business elsewhere. Consequently, one complaint represents an opportunity to improve service to all of your customers.“You should welcome those few customers who take the initiative to tell you what needs improvement,” Averwater urges.
5. Low prices won’t excuse poor service. Whether consciously or subconsciously, most shoppers recognize the realities of price/service trade-offs—they can have low prices or they can have good service, but not both. After all, great service in retailing isn’t a secret formula—it’s mostly a matter of the quantity and quality of a retailer’s employees.“I think we can all agree that every retailer would improve service by hiring more and better people…if price competition didn’t constrain expenses,” points out Averwater. “But since we don’t live in a perfect world, retailers must find a balance between service and price that appeals to customers. Sometimes a cheaper price with lower service works out, but often it leads to disappointment and dissatisfaction. So here’s the bottom line: Never believe the rationalization that poor service doesn’t matter if your prices are low enough.”
6. “Take it back where you bought it” alienates customers. Occasionally, you’ll encounter a customer who asks for help with a product he purchased elsewhere. Especially if “elsewhere” happens to be a troublesome competitor, it’s tempting to rub the customer’s “mistake” in: “Why don’t you take it back to them?” “Don’t they know how to operate it?” “Can’t they fix it?” “Now you see why their price is lower.” “In this situation, accept that the previous deal is done,” advises Averwater. “At issue now is who gets the next one. Realize that the customer is coming to you because he is unhappy with the competitor’s transaction. Do we really want to send him—as well as his money and possible future patronage—back?”
7. You don’t see your competitors’ happy customers. Inevitably, you’ll encounter a customer who comes to you because she is dissatisfied with the competition. At this point, you’ll be tempted to assume that this customer is representative of everyone who does business with your competitor. However, Averwater reminds us that the complaints we hear about our competition aren’t a balanced picture. Only their dissatisfied customers come see you; their satisfied customers have bought, are happy, and have no reason to be in your store.

About the Author:
Chip Averwater is a third generation retailer and chairman of Amro Music Stores in Memphis, TN. He has been a featured speaker on retailing in the U.S., Europe, Asia, and Australia. He is the author of Retail Truths: The Unconventional Wisdom of Retailing (ABB Press, 2012, ISBN: 978-0-9839790-7-4, $19.95).

For more information, visit www.retailtruths.com.


About the Book:
Retail Truths: The Unconventional Wisdom of Retailing (ABB Press, 2012, ISBN: 978-0-9839790-7-4, $19.95) is available at bookstores nationwide and all major online booksellers.


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