Losing Sales Through Poor Retail Service: Major Hidden Costs

It was a Saturday morning. I decided that I was going to have a shopping morning at a very large local shopping centre near our home. Two items were on my list – “well-known brand” trousers (I won’t mention the brand to protect the innocent) and a pair of gym shoes.

Little was I to know that this morning would reinforce to me two lessons.

The first lesson was how poor retail service loses sales – and retailers are ignorant to how much poor service is costing them in sales. I believe that it’s massive.

The second lesson is on how good service increases sales – beyond what the customer expected to pay. Good retail service can lead to customers buying more than they had intended – and leaving with a big smile on their faces. The customer wins and the retailer wins.

Back to that Saturday morning. I parked my car at the shopping centre and headed straight to the “well-known brand” shop. I knew exactly which style I wanted. I knew which size and colour I wanted. I even knew how many centimetres I need to have the length altered by. Yes, I have bought at this shop before!

I went to the trouser rack where my new trousers surely were waiting me. Two pairs in fact. I decided that I wanted to have the same style in two different colours.

I looked, but could not find my size.

So I asked the shop assistant for help.

She searched on the shelf for my size and then looked up at me and said, “We don’t have your size in stock.”

I asked her the inevitable question, “When will you be getting more stock in?”

She replied, “I don’t know.”

“Okay, this is not helpful information.” I thought.

So, I tried to get closer to a window of opportunity, “Do you think it will be one month, three weeks, one week….?”

She replied, “I don’t know.”

She did not ask me whether she could take my name and that she would try to find out for me and let me know. That simple act of service would keep the sale hot.

I slowly did a 180 degree about-face and walked out of the shop.

The “well-known brand” shop had just lost the sale of two pairs of trousers. A for-certain sale had just vanished into thin air… and the retailer will never know.

So this is the lose-lose-lose situation that resulted. I lost, because I did not get the trousers that I wanted. The sales person lost because she did get the sale.  But it was the retailer who lost the most, because not only did it lose a definite sale, but it has no idea how many times this happens in this shop, and across its retail outlets in the country every month.

I shudder to think how much this costs this company.

And, when companies like this find that they are not hitting their sales targets, their managers will say, “The economy is down” or give other excuses.

These companies typically do not appreciate that good service sells. More to the point, if they designed their customer experience – the unique customer experience – and trained people to deliver, they would reap rich rewards.

At the most basic level, these companies would reap rich rewards by giving their staff training in customer service, product knowledge and sales. Some companies like Kiehl’s (skin products) and do this really well. Their people soon become your trusted advisers – and you often walk out with more than you had intended in the first place.

However, a commonly held, view, but short-sighted view among companies is, “We will lose these employees, so why train them?”

In the words of the late and great Zig Ziglar, “You are better of training people and losing them rather than not training them and keeping them”.

Stay tuned for my next blog post which has a great example of winning sales through service.

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