Chapter 12 Customer Services and Retail Selling
Customer Service • The average firm loses half of its customers every five years. • Requires constant attention to attract, retain, and enhance long-term relationships with one’s customers. • Recall one of the major distinctions between the 1985 definition of marketing and the newest one by Lusch & Marshall* • Relationships rather than focusing on exchange • Develop relationships with customers by offering two benefits: • Financial benefits that increase customer satisfaction • Frequent purchaser discounts, upgrades, etc. • Social benefits that increase the social experience • Water fountains with seating, live, outdoor music on weekends, etc.
Three Basic Tasks of Any Retailer • All retailers must perform these three strategies in order to have a shot at success • Get consumers into your store (i.e., traffic). • Covert these consumers into customers by having them make a purchase (i.e., conversion- or closure-rate). • Do both of the preceding in the most efficient manner possible.
Customer Service • What is meant by customer service?
Customer Service • What is meant by customer service? • All those activities performed by the retailer that influence: • The ease with which a potential customer can shop or learn about the store’s offering (i.e., pre-transaction services). • The ease with which a transaction can be completed once the customer attempts to make a purchase (i.e., transaction services). • The customer’s satisfaction with the transaction (i.e., post-transaction services).
Transient Customers • When service is lacking… • Pre-transaction, the consumer is unlikely to enter. • Transaction, the consumer is likely to back out. • Post-transaction, the customer is unlikely to return. • Lackluster service creates transient customers. But what are they?
Transient Customers • When service is lacking… • Pre-transaction, the consumer is unlikely to enter. • Transaction, the consumer is likely to back out. • Post-transaction, the customer is unlikely to return. • Lackluster service creates transient customers. But what are they? • Individuals who are dissatisfied with the level of customer service offered at a store(s) and is seeking an alternative store with the level of customer service that they feel is appropriate.
Customer Service • It must be integrated into all the following aspects of retailing: • Merchandise management • Building and fixture management • Promotion management • Price management • Credit management
Retail Sales Management • The salesperson is a major determinant of a store’s overall image. • Two Types of Retail Sellers: • Order takers • Order getters • Which would likely work for a retailer selling… • Convenience goods? • Shopping goods?
Salesperson Selection • Retailers should design the sales job so that it involves high levels of: • Variety, • Autonomy, • Task identity, and • Feedback from supervisors and customers.
Customer Choice Criteria • Two of the most difficult tasks of a salesperson is: • Identifying the customer’s choice criteria and • Tailoring one’s selling strategy to fit that choice situation. • Four General Choice Criteria Situations: • No active product choice criteria • Inadequate or vague choice criteria • Choice criteria in conflict • Explicit choice criteria *Note these are purchase situation specific, not customer specific*
Evaluating Salespeople • Possible standards include: • Conversion rates • Sales per hour • Use of time • Selling time • Non-selling time • Idle time • Absent time • What are the strengths/weaknesses of each? • What does each incentivize/overlook?
The Retail Selling Process • The length of time a salesperson spends in each one of the following steps depends upon the product type, the customer, and the selling situation. • Steps in the selling process: • Prospecting • Approach • Sales presentation • Closing the sale • Suggestion selling
Prospecting • Find potential customers (or prospects) that are willing to buy a given product. • Qualify potential prospects as to their ability and buying power. • Can they buy, given they want to buy? • What is the goal of prospecting?* • Selling an appointment, not a product*
Approach • The first 15 to 30 seconds of a salesperson-customer interaction sets the mood for the entire sale. • Recommended steps include: • Greet/acknowledge the customer. • Never ask “May I help you?” Why? • Instead say, “Hello” or “What may I show you today?” • Listen to the customer’s needs. • Remember the key to the “Blue Grapefruit” exercise & selling quiz was listening* • Ask (only a few) clarification questions regarding needs.
Sales Presentation • The goal is to make the customer want to buy your product or service. • The salesperson should: • Determine the right price range of products. • Select what he/she believes is the appropriate product or service to satisfy the customer's needs. • Inform the customer about the merchandise in an appealing manner. • Help the customer to decide on the product or service that best fulfills the customer's needs.
Closing the Sale • This is the natural conclusion to the selling process. The key is to determine what is going on in the customer's mind. • The salesperson has several options: • Make the decision for the customer. • Assume the decision’s made and ask if it will be cash or charge. • Ask the customer to choose which product or service they want. • Reverse an objection by emphasizing the fact that the product's longer life will compensate for its higher initial cost. • While it’s the natural conclusion, many salespeople have a hard time closing
Suggestion Selling • The “Would you like fries with that?” portion of the sale. • A salesperson should attempt to determine if the customer has any other needs, in addition to the ones that have just been met through a transaction; there is always the possibility of an additional sale. • Examples: • Warranties • Other colors or sizes (e.g., for clothes) • Complimentary products (e.g., entertainment center for a new TV)
The Customer-Service and Sales-Enhancement Audit • The objectives of a customer service audit include: • Identify the service, salesmanship, and sales-enhancement methods that will produce more sales from the existing shopping traffic. • Target the methods by store and selling area that will produce the most significant improvements. • Determine the added sales that can be generated by improving the accepted service level, salesmanship, and sales-enhancement programs.
The Customer-Service and Sales-Enhancement Audit • The audit measures, analyzes, and reports on specific factors which are reported by selling area within each company store. • Management can then target train in areas like: • Basic Service • Salesmanship • Sales Enhancement
What You Should Have Learned…Chapter’s Learning Objectives • Why customer service is so important in retailing • The various customer services that a retailer can offer • How a retailer should determine which services to offer. • The various management problems involved in retail selling, salesperson selection, and training and evaluation. • The retail selling process. • The importance of a customer service audit.