In the Trenches
Best Buy’s incoming CEO Brian Dunn started with the company 24 years ago as a salesman, and in some ways never left his roots. He still spends a great deal of his time on the sales floor, “where the rubber meets the road,” he says (see Wall Street Journal article “Best Buy Confronts Newer Nemesis,” March 16). In his quest to now differentiate Best Buy from competitors Wal-Mart and Amazon.com (now that Circuit City is history), Dunn has used a series of store visits to provide inspiration. In the olden days of shopkeeping, owners minded their stores at all hours and lived upstairs when the lights were out. Nothing got past them since they were always there. In a world of multi-unit retailing, bosses are far removed from the action of the floor, often held hostage in meetings to consider new companywide dental plans and how to defer equity awards. Still, they take it as an article of faith there’s no substitute for being in the trenches, and “make time” to do store visits as often as they can. While Brian Dunn’s efforts should be applauded, there may well be a limit to how much inspiration can occur when a CEO makes a guest appearance. Certainly there is value in talking with the troops, where good ideas might arise and unaddressed problems can surface. At the same time, these are all too often staged as goodwill/PR events to rally the troops, and the real value back to the CEO is diminished. One legitimate substitute for management’s inability to be in stores all the time is the use of video-enabled behavioral analytics, which provides a volumetric assessment of how shoppers use the stores and what are the effects of the experience the employees provide. It’s an interesting way to fuel inspiration and find ...
On Second Thought, Bring Back the Lasers…
Getting a hard count of how many people pass through New York’s Times Square every day is an important measure for a number of commercial interests—setting retail rents and outdoor advertising rates most particularly. According to this article in the New York Times, the Times Square Alliance pays $100,000 a year for a team of Russian immigrants who are paid $8 an hour to count the masses. The NYT reports that high-tech gadgets such as video recordings, vertical cameras, and even lasers have been considered, but that the immense volume of traffic overwhelms the technology. Instead, the human tide is counted by “dozens of Russian immigrants armed with clipboards, folding chairs and counters.” Still, the low tech hand clicker approach employed by the Russians doesn’t work perfectly either. According to one of the counters, “When people walk en masse, it’s useless.” So when Times Square is most crowded, and counting accuracy is most important, the low tech method breaks down, too. Having worked with many companies to help them understand customer traffic and behaviors, I know the best results come from employing both higher tech solutions such as video cameras, along with a low-tech, more labor-intensive approach. Perhaps if the Times Square Alliance employed this one-two punch, they would be able to get true head-count fidelity. Even so, the most crucial assessments would still elude them—like how many people are actually stopping into the stores and buying, and who and how many are actually looking at the billboards. Those are the numbers worth real money.
Getting Out of Line
It’s becoming less necessary, but going into a bank to conduct business is sometimes still unavoidable. You’ve certainly noticed how increasingly rare it is to enter the queue without the guys-in-ties from branch management trying to short-circuit the wait time by asking if they can be of service. “Do you have a straight deposit?” they will ask. “I can help you over here.” When I first began observing this, I thought I was seeing an especially perspicacious new generation of bank officers—ones seemingly well-schooled in queue dynamics and the importance of efficient transaction flow. That was then, but today it’s all about skimming cream from the queue. Once they have you one-on-one, sitting at a desk to get your deposit processed, it’s open season—an opportunity to cross-sell, up-sell, and otherwise create awareness for a wider, profitable range of financial products. Customers are part of this dance, willing to give up the drudgery of line-waiting in return for listening to a brief spiel. It’s actually not a bad trade-off. There may well be a new product or service worth hearing about, and the customer at least gets the transaction accomplished and a comfortable place to sit. It’s not altogether different from the trade-off people make when they agree to attend a time-share pitch—a 90-minute commitment in return for a gift or free trip or other incentive (not that I want to conflate bankers with those who hawk condos in hotel ballrooms). But it brings up an interesting idea, especially in today’s economy. In return for you doing this, I’ll do something for you. Horse-trading, barter, swapping—call it what you will—it may be how things get done with increasing frequency. And then you won’t need any money. Or to go into a bank line.
Success Beyond Accidents of the Marketplace
It might be easy to dismiss McDonald’s strong sales performance as nothing more than the result of a heightened consumer desire for inexpensive food during tough economic times. But having worked with the company for more than a dozen years on a number of advanced analytic projects covering operations, marketing and HR, I know this is only one of a host of even more salient factors contributing to the very positive numbers coming out of McDonald’s. A recent story in the New York Times explains how the company has won over skeptical customers with its thorough, nearly obsessive effort to get things right. Here are a few of the key ingredients that have contributed to McDonald’s supersized success, even as the economy and the rest of the restaurant industry have struggled. A clear, customer-focused goal: McDonald’s has single-mindedly united its people behind “Plan to Win,” an internal playbook that encourages employees to “focus on quality, service and restaurant experience rather than simply providing the cheapest, most convenient option to customers.” Adjustments based on brutal facts: McDonald’s discovered that customers were becoming more interested in dining early or late, so stores were opened earlier and stayed open later. Executives “pored over data to determine what consumers were eating and drinking and where McDonald’s could expand to capitalize on changing trends.” McDonald’s transformed beverages from an afterthought to a central offering, resulting in higher sales and plaudits for its coffee quality. Grounded, open leadership: McDonald’s selects leaders who have restaurant experience, not merely academic credentials. Jim Skinner, McDonald’s CEO, never graduated from college but rose steadily through McDonald’s ranks. He’s comfortable mingling with everyone from coworkers to restaurant staff. According to John W. Rogers Jr., a McDonald’s board member, Skinner has “created an environment where these guys have been allowed to shine.” Patience: Some changes at McDonald’s ...
One in a Row
A woman walks into a store and takes a cart and a shopping basket. This moment is a retail ethnographer’s wet dream. It’s a weird and interesting shopper behavior and may be something big. HUGE. Like………? Maybe it’s that the shopper doesn’t trust the cart to keep the breakables unbroken, so she’s taken the basket as a “side carrier” which will provide a more gentle ride. Hey, there’s an idea here—let’s suggest they put in padded carts. Wait. Better yet—padded compartments within the carts to hold the eggs. But that could lead to walk-offs, with customers conveniently “forgetting” their eggs until after they’ve checked out. That would be bad. Hmm. Maybe it’s that she’s a germaphobe, and thinks the basket is less apt than the cart to have dried snot or microbes of baby poop on it. That’s it! We need entry door shower mists which spray liquefied Purell all over everything that passes by. And so on. What’s unknown from this little tableau is whether a shopper who takes a cart and a basket is a party of one or really one representative of unseen millions. Maybe it’s that she’s the only one today, but the trend setter who millions will be copying any day now. Or just maybe, since this is something I happened to witness, she arrived at the store and was meeting her husband back at the meat department. It’s one of the reasons we like to use in-store video along with ethnographers when we do store studies. It’s good to be able to see things thousands of times in addition to once.
Who may I say is calling?
Bill writes: When the volume of rings got completely out of hand, I joined those already on the roster of the do-not-call list. It has helped some. But I still get plenty, with caller ID displaying the name of the company, charity, political organization, call center or the mildly intriguing “unknown caller.” I don’t keep a log next to the phone to make sure this is an outfit I’ve recently done business with, and like most everyone else, simply assume the caller is inside the boundary line of legal—however barely. But I take these calls every time. I’m in the customer experience business and want to hear the script. Most are delivered in that breathless way, a non-stop recitation of the “premise.” Once it’s established they’ve got the right person, there’s no pause—or what could be my one opportunity to get a word in edgewise—like “goodbye.” These scripts have been tested over time, so the companies know what “works” and what doesn’t “work.” Still, it’s hard to get motivated when the delivery has that rote and robotic thing going on. It was notable during last year’s political season that the Obama calls, highly scripted to be sure, still seemed…..earnest. And, in a good way, they had an amateurish feeling—however studied they may have been behind the scenes to make sure a dialogue was started and a human interest in the caller seeded. Maybe there’s a different way for telemarketers to evaluate their outbound call scripts. Instead of using the blunt instrument of compliance—the rote adherence measurement to a set of words by the solicitor—companies should hunt for those associates with lousy compliance scores and high conversions. Perhaps they hold the secret to a new non-scripted “script.” Like the Obama boiler room gang, who raised almost $800 million over the phone.
Keeping the Customer
Bill writes: I can’t remember where I heard it first, but an expression I’ve always liked --- it’s used to describe how fast calamity can come – is the one about someone who just “pulls a single thread and the whole sleeve falls off.” Cut to me at Whole Foods on a recent shopping sojourn. I had a grocery list of more than 50 items, one of which was watercress, that tangy leaf vegetable with the slightly bitter peppery taste that doesn’t have many uses beyond being filler for ladies’ tea sandwiches. With produce as the first department along the perimeter from the store’s entry, it was my first stop. After several futile minutes attempting to find the item, I asked for help. The clerk couldn’t find the watercress either. He went to the back room and looked. Nothing. Sorry, sir. I looked at the rest of my long list and my completely empty cart, and weighed my options. I could continue shopping and then go to a second store for just the watercress, or bail now and get everything done together at a single (other) store. I chose the latter, and with that decision, Whole Foods was out more than $225--what I ended up spending at the competitor. What the Whole Foods produce guy might have asked is what I needed watercress for. Had he done so, he would have found out that it was to act as nothing more than a garnish for a plate of Super Bowl deviled eggs, a green bed on which to splay and display these old school treats. Then he would have been able to suggest Italian parsley or arugula as worthy substitutes, and I would have stayed at the store. Is this asking too much of employees? Maybe, but I’m not so sure. Taking an ...
Retail Charm Offensive
Bill writes: In his early stand-up days, Jay Leno used to tell the story of the frustrations of being in line at the supermarket. He waits. And waits. And waits some more. Then it’s his turn, and the checker doesn’t even look up to say hello. She’s got her head down in scanning mode. When it’s time to pay, he – thinking he’s a valued customer at a store where he’s just forked over more than $200 – still doesn’t receive an acknowledgment. Not able to contain his frustration, he says to the checker that a simple thank you would be nice. “Why should I?” she says, scoffing, “it says it right here on the receipt.” Over the years, I’ve seen plenty of cluelessness and rudeness in stores—maybe not quite as bad as the Leno story. I once asked a clerk to help me locate an item that was obviously not in the aisle where I sought his help—he just happened to be the only person anywhere in the store I could find. He stood very still, pivoted his head around to be able to see everything within a three-foot radius of his body, and then proudly proclaimed the item was not there. I suppose it’s not so different from being in a restaurant and asking a passing waitperson for a spoon, only to be told this isn’t their station. Times are different. There’s a charm offensive going on everywhere. Store traffic is thin—and precious. I get a greeting like royalty as soon as I walk in almost anywhere—even big box stores, where sucking up to customers has never been part of the operational orthodoxy. Employees are now dropping what they’re doing to help and lead and show and answer—and thank. It’s all rather nice, although sometimes a bit desperate—and annoying. I ...
