How Retailers Are Losing Billions from Poor Customer Service

Author and customer experience consultant, Shep Hyken reported in Forbes (August 27, 2016) that retailers in the US were losing USD63 billion each year due to poor customer service.

Here is the message: a few seconds of poor service, or lack of product knowledge, leads customers to abandon enquiries or switch suppliers. Shep went on to explain that customers wanted easy, fast, friendly service, delivered by knowledgeable people.

Let me share two experiences with you.

Opportunity Lost: Tale of the Confused Customer

I was visiting London and needed to get a local SIM card. I went into a convenience store that sold a brand of card that was recommended to me. I looked at information sheet that was sitting on the counter. There were lots of options for me to choose from. I had information overload. I needed advice.

I explained my situation to the young guy behind the counter and asked for his advice. He paused, looked me in the eyes with a blank look, and then suggested that I check the information sheet. This was the sheet with lots of options that had confused me!

He was neither knowledgeable nor helpful. I did a quick reverse out of the shop. The sale was lost. Neither SIM card company nor the convenience store owner will never know.

Another time, I was in a major department store in Kuala Lumpur. I was looking for a new wallet. I went to the wallet section and was confronted by a sea of wallets. Although I was looking for a particular brand, I casually asked the lady behind the counter, “Which wallet do you recommend?” This was her perfect opportunity to help me by asking, “What are you looking for in a wallet?” But this is not what I got. She simply replied, “They are all good.” I found this particularly unhelpful, and left the shop. Another sale silently lost. The lady was friendly, but she was not helpful. It was clear to me that she had not been trained in basic service skills.

Train Them and Create Sales

The difference between getting the sale and not getting the sale can be summed up in two areas – product knowledge and customer service

You’d think that it’d be common sense to anticipate that there would be lots of customers like me who would need more information or help in figuring out which product best suited my needs. And yet, the SIM card company did not equip the counter guy with information to help thousands of people like me. Nor did the departmental store train the sales lady with basic customer skills to identify and engage a potential customer for his needs.

You might say, “Maybe these people were new to the job.” Or you may say, “It’s expensive to train people – particularly when companies employ part-timers, or where our product is distributed through a wide network.”

My response is simple. These excuses cost you billions of dollars each year. Yet if you train your people, they will create sales.

Digital Makes Training Easier

The world of digital technology now makes it easier and cheaper to conduct basic training. Product knowledge – and information on product updates, can be delivered through mobile phones and tablets. The learning can be made fun by adding gaming principles which also increase learner motivation.

The learning can be in traditional classroom settings, it can be blended, involving a combination of the classroom and digital, or it can be totally digital. It depends on a range of different factors, including the product, the company and the complexity of the skill to be delivered.

I was inspired some years ago when I heard the CEO of a major hospitality chain being asked what he was going to do about the relatively small net profits that his company was making. Many CEOs would say, “I will cut costs.” This CEO was different. He said, “I will increase the product and service training that I give my staff. When they know more and serve better, they will sell more.”

How great is that! Retailers, take note. Good product knowledge and service creates sales. Don’t skimp on training your people. Rather, expand the service skills and the product knowledge of your people, and you will find  your sales increasing.

Until next time.

 

George Aveling is the Australian-born CEO of TMI Malaysia (www.tmimalaysia.com.my), a global customer-experience transformation consultancy. He is CEO of two sister companies, TACK International Malaysia, a global leadership and sales training company, and Elementrix, an award-winning digital learning consultancy. TMI and TACK have offices in 45 countries of the world. Between these companies, there is an unparalleled range of intellectual property to improve individual, team and company performance. If you would like to contact George direct, feel free to email him at george@tmimalaysia.com.my

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