Customer surveys, are they really credible?

I just went through the car buying experience for about the twentieth time. In all candor the salesperson, the sales manager and business manager were efficient and very respectful of my time. I set the parameters immediately for the car and the price immediately and they worked creatively to make the deal. After the deal was signed the salesmen asked if I would log onto Edmonds.com and post a review of him and the dealership. When I was about to leave the sales manager requested that when I received a survey from the manufacturer that I respond with all 10’s. If for some reason there was a question didn’t deserve a 10 that I call him to resolve the issue before completing the survey.

I get weekly surveys from my bank of about 20 questions concerning their service. The clerks at the bank always ask me to please respond to the surveys with “Very satisfied”. I also get periodic surveys from Panera Bread and the manager always asks that I respond favorably since it reflects on him. The bottom line is this is another good concept that has gotten devalued. There may be some constructive aspect of these surveys but in reality it’s all about how these companies get portrayed by the “Satisfaction Surveys”, J D Powers etc. So when you look at a company’s satisfaction rating be suspicious.

Consistency is the key to success in retail!

A successful retail operation is about consistency. Customers become comfortable with certain stores based on a number of factors: Ease of shopping, knowledgeable staff, product assortment, appreciation shown for their business and of course pricing is always a consideration. I purposely put pricing last because it is a factor, but it is not the primary reason people shop at an independent retailer.

Businesses sustain and grow for a number of reasons:

  • They have a proprietary or unique product no one else has-  a Pharmaceutical company
  • A strong relationship with their customers that allows them to connect very deeply with them
  • A business model that sets high standards and can be repeated every day to ensure consistency

The two points that apply to a retailer are about building stronger relationships and repeating high standards. So how do maximize the potential sustainability and growth of your business. Here are few ideas:

  • Have clearly defined rules of behavior and how you want customers treated
  • Allow your employees to challenge assumptions
  • Indentify the sources of conflict and deal with them quickly
  • Rely on facts and data – the bedrock of any good POS system
  • Focus on the exceptions that matter, some are just not important.
  • Empower your employees to resolve customer issues immediately

Windows XP – another milestone passes ending all Microsoft support for the aged OS

36718118_sThis was copied from a STCR newsletter. I felt it was worth reposting due to the security implications.

Windows XP, which has been without Microsoft update support since April 2014, is on the radar again.  Microsoft originally said it would stop shipping Security Essentials’ signature updates to XP PCs after April 8, 2014 the same as when their support ended.  Microsoft postponed ending their free Security Essentials updates to this July 14.  With that date and all Microsoft support for the operating system behind us, now is the time to stop using Windows XP, especially if it exists on your Point of Sale network.

If you currently must use Windows XP then you should make plans to replace it as soon as possible, look for and install a new antivirus program that will support XP in the meantime, and disconnect the XP computer from any network or internet connections.

These measures may help prevent an intrusion but they should only be used for a temporary stop gap plan and do not help with any PCI issues connected with the aged Windows operating system.

What does the culture of a company mean?

I hear this so often from clients, our culture is to be more responsive to customers, or customer centric or other variations of the same theme. It’s an aspiration of how the retailer wants to be perceived because their lifeblood is their ability to keep customers coming back to their store. The reality is that in many instances there’s a disconnect between the aspiration and the reality. Don’t get me wrong there are many retailers that talk the talk and walk the walk, but others simply don’t execute on the promise. Company cultures are living, breathing organism. The framework has to be developed top down and then allowed to grow organically. It’s learned behavior when executed properly and it starts internally. I witnessed instances where management treats employees discourteously and dismissively while espousing a customer centric culture. The framework starts with treating your employees the way you want them to treat customers. If management’s behavior mirrors the age old adage “Do as I say not as I do” your customer centric culture is doomed. On the other hand once if it’s consistent to your defined goal it will flourish organically.

A great book to read that will provide an in-depth blueprint on the value of customer retention and the importance of loyal employees in achieving customer loyalty is “ The Ultimate Question” by Fred Reichheld.

Ten questions to ask perspective vendors before upgrading your POS system!

  1. Is your system EMV complaint?
  2. Is your inventory updated in real time?
  3. Can you see a single view of a customer’s purchase history across all channels, in-store and online?
  4. Does your system offer an integrated e-commerce platform?
  5. Does your system integrate with social media for marketing purposes?
  6. Is the data in your system easily accessible for reporting and analysis?
  7. For multi-store operations is the data from the stores replicated back to your central office in a timely fashion?
  8. What value added services do you provide to help me better utilize your system?
  9. Do you have a user conference where you solicit feedback and input from retailers?
  10. Does your system offer a Mobile POS solution that would allow us to enhance the customer experience in our store?

Bonus: This is the question you need to answer as a retailer:

Is your organization ready to adapt and change?

Resistance to change is the biggest inhibitor to successful implementation of a new system.

Are you a proactive or reactive retailer?

proactive

Here are ten questions that will help you make that determination!

  1. Are you open to new technologies that will help you better connect to your customers?
  2. Have you taken the necessary steps to be EMV complaint by October 1st. 2105?
  3. Do you collect customer purchase data?
  4. Do you personalize offerings to customers using their purchase data?
  5. Do you review your credit card processing costs every year?  You understand your rate is not the sole factor when analyzing your total cost.
  6. Do you review these numbers every month: Year over year sales, gross margin by department, average transaction, number of item per transaction, number of transactions?
  7. Do you hold a weekly meeting with your staff to review problems that they encountered and discuss best practices to resolve those problems in the future?
  8. Do you have a social media presence for your business and respond to both positive and negative feedback?
  9. Do you review your website analytics monthly and explore options for improving your SEO (Search Engine Optimization)
  10. Do your review all variable expenses at least twice a year

Bonus question:

  1. Can you name three strengths of your business that distinguish you from your competitors?

The minimum wage debate in retail, a practical solution!

The debate is on, what effect will the increase in the minimum wage have on independent retailers? Some states and even some cities have taken it upon themselves to mandate the new minimum wage at between $12.50- $15.00 an hour to be phased in over the new few years. Wall-Mart has announced it will increase their minimum but not to the$15 level. The main issues central to the debate are how will these increases effect store profits and will there a net negative effect on retail employment. We don’t a lot of data to reference but both Costco and Trader Joe’s have consistently paid above the minimum wage scale and maintained their profitability. Costco has been a model of worker productivity resulting in greater profitability. One of the factors for this is certainly their compensation plan. Economics 101 tells me that when a minimum wage worker receives a $2 or $3 per hour increase 100% of that goes back into the economy as retail spending, the prime driver of our economy. The issue has been become political fodder with no real substantive debate. I have a simple and pragmatic solution. Tie the minimum wage to the CPI and adjust it yearly the same way Social Security benefits are adjusted. This approach accomplishes a couple of things: It takes the issues out of the political arena, and the incremental adjustments become manageable for retailers to absorb. My closing thought is a few years ago congress decided to avoid the political debate over their salary increases and make them automatic, so they do understand the concept of how depoliticize an issue.

Six things you should know about EMV compliance and the liability shift!

October 15 of this year is the target date for retailers to implement the new EMV credit card standard. Retailers are not mandated to have the new technology in place, and in fact it is estimated that over 50% of small (under 1million in annual sales) will opt not to be complaint. Their feeling is that they are small and will not be targeted by hackers. This is high risk stance considering the potential penalties and charge backs based on the EMV liability shift. Here are 6 things you should know about the Liability Shift.

  1. Banks will no longer be the only party liable for the cost of fraudulent activity.
  2. Liability will fall to the least compliant party
  3. A non-complaint retailer still using swipe and signature would be liable if loses resulting in their inability to process chip and pin cards
  4. The bank or processor would be the responsible for fraudulent activity for retailers who can process chip and pin transactions
  5. Retailers who have chip and pin technology in place can also process contactless payment options ( NFC, Apple Pay)
  6. Retailer who cannot process the new chip and pin credit cards will be viewed by customers as less secure

R.E.T.A.I.L (2)

R: Remember why you started your business and reconfirm it as your guiding principle

E: E-Commerce is growing at a rate of 4-5% annually which is greater than in stores sales. If you not meeting that growth maybe you site needs an upgrade

T: Trust your instincts. Retail has become a data driven business but don’t ignore your gut.

A: Adapt to survive. Retail has become a quickly evolving landscape. You don’t have to embrace every new technology but you need to be aware of them and implement those that fit your business model.

I: Interaction, every customer interaction with a customer either strengthens or diminishes your relationship with that customer.

L: Losing customers is evitable but if you lose a good customer take the time to find out why.

Another retail initiative that’s a race t the bottom!

Nordstrom’s just announced they are launching a curbside pickup at twenty of their stores. Nordstrom’s has been at the forefront of omni –channel fulfillment. The new initiative is another step toward providing the ultimate convenience to shoppers. One of the basic concepts of retail is to get people into the store to maximize their spending potential. The omni –channel strategy makes sense, buy on line or at any store and pick up your merchandise at the most convenient location. The curb side pickup is counter intuitive to the whole concept of retail. The convenience factor may initially be thought of as an attempt to cater to the busy consumer, but if their successful and it grows there may be unintended consequences.

Retailers are still trying to figure how to wean shoppers off the price promotion game they created about ten years to spark holiday sales. They kept one upping each other by offering greater discounts. Margins have taken a beating, but its slow process reversing consumer behavior that the retailers created. Curb side pick could another one of those good ideas that has the unintended result of keeping shoppers out of stores.

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