by John Stanley

I recently visited a small town in the southwest of Australia. Like many small towns, it needed to try and stop travellers to get the extra dollar out of them whenever possible. I met the Tourist Committee, which had done a brilliant job in promoting the town and getting the traveller to stop. Travellers tended to stop at the corner store, so I mystery shopped the store while I was in town. Alas, it was made clear by the manager of the store that they did not like to serve strangers. All the work the committee of volunteers had put into building the profile and sales in town were destroyed in ten seconds by a salesperson with the wrong attitude.

We often believe this type of event is an isolated incident. But imagine what would have happened if we were greeted when we entered the store with a smile and a “Hello” and the manager showed interest in us as people? According to the latest research carried out by the American Express Global Customer Service Barometer released in May 2011, sales would, on average, have increased by 13 percent. Think about a 13 percent lift in sales without spending a cent and how this would affect your business.

In my travels around the world (see my TV program on my Members Club), there are three key issues facing all retailers at present. Retailers are finding it tougher to get the sale, and I believe their focus needs to be on:

1.  Integrating social media marketing with traditional marketing
2.  Improving customer service
3.  Connecting with the local community

None of these initiatives involve a great deal of capital, but they can make a big difference in your bottom line.
American Express carries out its Barometer research every year; therefore, it can compare results over the years and identify customer service trends. The survey is carried out in the USA, but can be a guide for all retailers.

The Good News

The good news is that 60 percent of consumers believe that customer service has gotten better in the last twelve months; however, 26 percent believe it has declined. Customers believe that 22 percent percent of businesses take them for granted.

The economy has affected consumer attitudes. In 2010, when the last survey was done, 58 percent of consumers were prepared to pay more for great customer service. Compare that with the 13 percent in this year’s survey.

Customers Leave If the Service Is Bad

One of the major results of the survey is that 78 percent of customers will leave a business if they believe it provides bad customer service. Again, this is a lot of money for a business to lose due to the attitude of its sales people. In my own observations, one of the main reasons for this decline is the lack of training in basic customer service skills.
Customer service training used to be compulsory when you joined a retail business, but in a workshop I carried our recently, only one business in the room was carrying out regular team training.

The reason often given is that Generation Y team members move on quickly. In Australia, we are told they will have 20 jobs in their working career. But, Gen Y’s say they will stay longer with a business that trains them in new skills. We need to reintroduce the training skills in customer service that are often called “common sense” but no longer are, if they ever were.

There is a feeling in many retail circles that the large retailers have taken market share away from the smaller retailers. Price, convenience and ease of parking are often given as the reasons for the shift in market share. This survey revealed that 81 percent of consumers would prefer to do business with small retailers if the small business owner provided the right service.

Provide good customer service, and the opportunities still exist to grow your business. The great news is that you can increase sales by simply getting your team to change their attitude.

John Stanley (CSP) is one of the top 10% of speakers in the world today, an acclaimed retail consultant and WA Entrepreneur of the Year 2009. The author of several marketing, customer service and retail books including the best seller “Just About Everything a Retail Manager Needs to Know”, his company is WA Small Business Champion 2009 – Educational Services. www.johnstanley.com.au