Red Zebra Business Centre - Management Memos
October 2011 Making Measurably More For Your Business Since 1985! Page 1
MaxProfile
Why don't things work like they used to?


Max Williams, Principal Consultant

In a recent conversation with a client, the question arose: "Why is it so hard to get anywhere these days?"


The question was almost rhetorical. But there was a real edge to it, too:
Why?

The main reason appears to rise from the technological changes now sweeping the business community. In addition to concerns over the global economic environment, the dominance of Chinese manufactures in the traded goods sector, and other similar macro concerns, there have been many advances in the art and technique of management we have put aside. To our cost!

For example: CRM and database marketing have been with us for over twenty years. Today, consulting clients remain reluctant to use CRM techniques to get close to their customers and drive business. Meanwhile, the larger organisations (we often accuse them of being slow to move) have already implemented these systems and gained yet one more competitive advantage.

Another example: We have had sophisticated management analysis tools and pricing tools available for our clients since 1996. Yet just now we still find great reluctance to abandon old ways, and take advantage of new techniques.

Once a client explained how he felt at seeing us offer new approaches. His comment was enlightening, and a little frightening!

He said "You know Max, I know what to expect if I do what I have always been doing, but I have no idea where I might finish up if I follow your advice." Boom! Boom!

Of course that looks just awful for me as a consultant. But when you recognize that this client had had a clear model presented of what his revenue, expenses, and profit might look like if he were to take the step recommended, it really says even more about him.

After years of spruiking the benefits of a very detailed, and budget driven approach to pricing, only now do we some responses from clients. The reason we see some response now is that those pondering, slow, big old retailers who do use much better pricing techniques, are now applying the squeeze! In all facets of business, from supply, to stock control, to pricing and merchandising.

So now it really is time to get serious - and apply the more complex, more demanding, and vastly more successful management techniques of others. Before the squeeze finally crushes your business.




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Memo: Need to Rejig the Battle Plan

O

ver many decades, truckloads of memos, articles, and books have been written about the importance of customer service to the people who buy from you.


Memo All Bricks and Mortar Retailers: Better Re-jig the Battle Plan! 

Good customer service has been attributed with better business growth, and higher margins. Regrettably, the real life experience for the majority of customers has fallen far short of the ideal we talk about.


Now comes the pay-off!

Temkin Group, a US customer experience research and consulting firm recently surveyed 6000 US consumers.  The top three companies rated for excellent customer service were Amazon, Kohl's and Costco.  Very significantly, there was no department store ranked in the top 10, and these are self-serve businesses rating very high for Customer Service. 

In Australia, Choice Magazine recently surprised industry watchers by giving top ranking to Bunnings, bumping David Jones for top spot in the category for 'bricks and mortar' retailers

As an SME (Small or Medium Enterprise), your business is not a department store, and you may not even be a retailer.  Nevertheless, the question remains.  Why is self-service, great service?

1. Service perceptions are much based on expectations.  Our mantra is "Exceptional Customer Service occurs when every 'Moment of Truth' is a pleasant surprise". For a customer, a polite gesture by store staff is all it takes.  The "Moment of Truth" has been a pleasant surprise!

2 Customers are becoming comfortable with automated service processes that work, like supermarket checkouts. Amazon remembers who you are, what you've shopped for previously, makes helpful product recommendations, and you can buy with a single click. Easy self-service.  Great Service!

3. Customers want to be in control, and self-serve, automated processes put the customer in charge of their own service destiny.

In this new retail era, customers consider self-service to be great service.  This has profound implications for your staffing, training, and your operating expenses.

When customers are more concerned about service outcomes than human inputs, the cost of the human inputs had better be felt at the cash register - or you lose.


On-line Success Lies 'Beyond the Basics'

Recent data indicates that even the biggest and most successful retailers in Australia, such as David Jones, Myer and Harvey Norman, are behind in their approach to selling online.


A report, 'Beyond the Basics - Why the largest Australian retailers are losing the online battle', was published by eMarketingConnected, It evaluates 62 of Australia's largest retailers across four retail sectors - clothing and accessories, household goods, department stores, and food retailers.

The report details the state of Australia's online maturity in the retail industry. looked at four key online areas - the retailer's website, social media, email/online CRM and in-store integration.
Follow your customers
Amazingly, less than one third of the retailers reviewed are using the more sophisticated selling tools such as user reviews and videos; and two thirds are doing only the absolute minimum when it comes to collecting customer data. They provide little or no social engagement for their customers, nor the higher level of personalisation that consumers are coming to expect.

In light of these findings, it is clear retailers need to take an integrated cross-channel approach specific to their customers.

Smaller retailers have few benchmarks relating to best practice, unless overseas examples are considered when it comes to first class retail marketing.

Australian retailers stand to lose increasingly sophisticated customers who use multiple online channels - review sites, blogs and social networks - to find out more about a brand, product or service.

The first step for retailers is to gain a deeper understanding of who their customers are and how they prefer to research and buy products. With that knowledge, every retailer can implement effective multi-channel engagement strategies. The way for retail sales to be improved is by offering rich, meaningful experiences both online and in-store.

A copy of the report can be downloaded from this link.


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