Friday, June 30, 2017

Customer Service Is a Really Big Deal - And Still Should Be!

I’m sitting in a small coffee shop where it’s just a fun place to go. It is not a big chain coffee shop, It is in a small community, and is visited by many on their way to work or for a break. I am only here in the morning and I do not live in this area.

The first morning I visited here was to meet someone who recommended this place. As I purchased my coffee the individual waiting on me, very pleasant, smiling, and after the hello asked “Mug or Cardboard?” I responded with Mug and proceeded to pay (less than the chain but more than a dollar). I received my change and put the coins into a jar marked Instant Karma. As I turned to get my coffee she says, “refills are free”, wow, Instant Karma. There were many people drinking coffee and some in deep conversations.

I do believe that true, sincere, friendly, Customer Service is the only thing that can really save brick-and-mortar retail establishments and this includes Big Box as well as Mom & Pop, and chain/non-chain coffee shops. To succeed they must have a belief in, and the presentation of, a customer centric attitude; "we are here for you". If this isn’t their love of business then the digital world will have it all eventually. We  do have a Keurig coffee maker at home and can order pods online anytime we want.

I don't believe that most retail businesses think as much about Customer Service as they did in the early 20th Century, the 1920's, 30's, 40's and maybe the 50's, after that Customer Service started to go downhill.  This could be the result of the great retail leaders of the time who died or were replaced with financial managers. Financial managers have a fiduciary responsibility to the stockholders, and are not guiding lights in retail leadership, or are concerned about the customer centric part of the business.

Another way of thinking about Customer Service is User Experience.

Where have all the Stanley Marcus, Morris Rich & Bros, the Gimbel Bros. gone? I love the line from Wikipedia on Gimbels:
"Gimbels principles and merchandise reflect the ideals of middle class America. Their principles consisted of "courtesy, reliability, good value, and enlightened management.".
This is what most of the retail giants of our past believed. In Minding the Store by Stanley Marcus (of Neiman Marcus) the very first chapter begins with: “There is never a good sale for Neiman-Marcus unless it’s a good buy for the customer.” Stanley goes on to write:
That was one of the first declarations of business philosophy I heard my father, Herbert Marcus, made soon after I came to work at Neiman-Marcus in 1926. It was reiterated so many times that it became established as an article of faith in my mind, and on numerous occasions he demonstrated this enforcement of this principle even when it meant lost sales and profits.
The first page of this book is the ideal strategy for retailing and a lot of it is missing today.

This is from a story in the Columbus Business First, 2001, regarding a reunion of Lazarus Old Timer's.
"Regardless of what level of responsibility you had with the company, you spent time on the floor talking with the salespeople and talking with the customers, just making sure the service level was there," Lanphere said. (Charles Lanphere left the store in 1978 as senior vice president in charge of all the stores.)
From Best of times: Staffers remember when work seemed like a family printed in the Columbus Business First, 2001
The history of most of the major retailers in this country, and perhaps around the world, were of people doing what they loved and providing a service that impressed the consumer and the employee, and making a reasonable profit. It slowly went down as these leaders died or passed control to the financial experts.

Over this past Christmas my experience shopping made my coffee shop King of the Hill. I had an awful time in major department stores, Macy's for one, with people who could have easily been replaced by Androids - I meant robots but phones might work as well. This lack of service mentality carried forth in major chain coffee shops, restaurants, and even the Microsoft Store, where I have already broken my promise to never return.

The success of online businesses has a great deal to do with 1) how easy it is to buy, 2) the service you get when you have a problem, and, perhaps primarily with 3) the lack of service you experience at brick-and-mortar establishments. There are many small businesses that will stay alive because they know people, like people, and provide more service with their products. These Mom & Pop stores are usually niche businesses, they do not have great inventories and will never interest investors – which could be a good thing for their emotional well being.

Except for Costco (my opinion), Big Box retailers do very little training in product knowledge or service. To some they have a Customer Service department and do not need to train their employees how to treat (or deal with) customers, it's not in the budget. Ironically the companies do not train their people on how to get along with each other and that is often reflected in their relationship with the consumer. This is where the fun in retailing has gone out the door both with the customer and the employee.

My most recent Starbuck experience goes like this: I walk in and after what seemed forever (about 3 minutes) someone says, without even smiling, “What can I get you?” I used to go in and get “Hi, how are you?” and then “What can we make for you today?” Ironically I received a better reception, at the same store, when I ordered online and went in to pick up the coffee. They are training me. Maybe Jeff Bezos has been talking with Howard Schultz and convincing him people should buy online.

Not in my little coffee shop. “Hi, what can we get for you today?” and then “Thank you”. WOW!

Retailing is not fun to work anymore, and I should know. I loved retail, I loved the people – if there was a bad customer they would be followed with a good one. When UPS backed up to the dock it was like Christmas, what did we get today? I worked for many retailers in my life and my wife and I have been in the retail business. You must treat your people the best you can and your customers will get great treatment as well. I know you do have to practice fiscal responsibility however it's an overall combination of good people, product, knowledge and marketing, and that customer relationship that will lead to a reasonable profit. A reasonable profit in the retail business is not necessarily what today’s investors want.  I was once employed by someone who related a reasonable profit to a “conscienable profit” and I like that.

Blame it on money? No, it's shortsightedness on the part of management, I did not say Leadership. Most heads of retail giants today, as stated earlier, are managers put in place by stockholders to deliver a return on investment. They are not on the floor dealing with the people, employees or customers. The concept of Customer Service, or User Experience, is not in their ken. Perhaps most do not even know how it works, except for perhaps Warren Buffett or Tim Cook of Apple. The Apple Stores know!

In today's world, it is possible that the major return on investment should be in human capital and not in larger boats, or tall buildings with their name on it. Why go to a Big Box retailer? Information and knowledge can now be gained via the Internet. Products delivered in 2 days. In some cases, we can get the products in the same day.

Amazon is not what one would consider to be an ‘Outlier’ and yet in some ways it could be. I have had a wrong item shipped by an Amazon supplier and it was replaced faster than even I expected. I have had items accidently ordered and cancelling was not an issue. One item was received in bad shape and returning it was not a problem. We have been Prime members for a long time and plan to continue.  I can say we are nowhere near Amazon's big customer's either, but I feel we count - and that is the important part.

In an article in Stratechery, by Ben Thompson, where he shows that Amazon has reduced its stated goal to simply say:
We seek to be Earth’s most customer-centric company.
Read the complete article here https://stratechery.com/2017/amazons-new-customer/ (actually a referral from TWiT – This Week in Tech by Leo Laporte)

The big issue is that most retailers do not have the pop and sizzle they once had, there is no excitement about going to the store anymore, once there the atmosphere can be a downer, the employees are not happy and excited. And the food courts are not always the best.  If this happens online you don’t see it. One does not go online for pop and sizzle or food courts.
If brick-and-mortar retail wants to compete they will have to provide a service that is not provided online, that service would be customer contact or customer presence service. Bright, Cheerful, in-touch, knowledgeable people, who are in the “NOW” (Ekart tolle). Treat your people right and they will treat your customers right. Hmmm….The Golden Rule applies.

Back to Coffee Please in Madeira, OH right on Miami Avenue in the heart of Madeira. In the many times, I have come back here by myself I still get the same treatment. To say that this is a 25-minute drive from my home, and not in my normal driving pattern, should tell you something about how this place makes me feel. I am welcome without buying large muffins, sandwiches, or anything else other than the coffee, and the service is always the same, warm and friendly, and the coffee is always good. Note: the coffee’s many options are brewed fresh each day.

I need to get my next cup and the refill. I won’t tell them I wrote this, you will have to. 😊

Here is some recent personal shopping experience in the Cincinnati area.
Brick-and -Mortar Retail Experience

  • Coffee Please   
    • I’ve said all above, I’ll be there on Monday.
  • Panera Bread
    • Minum early staff and over time the traffic here appears to have diminished and I go there less myself. I understand they are building for an online ordering presence. I hope it works for them.
  • Microsoft Store
    • Bad experience with IT staff placed on floor to help customers. Very curt and abrupt. Vowed never to go back but lost that battle about 2 months later.
  • Best Buy
    • Good and bad because of good or bad knowledge. All are helpful but it is difficult to tell who has the real knowledge and who does not. Must be careful. To some degree online is best.
  • Costco
    • There is always someone who is generally (and genuine) most helpful. If online is as good as in store then this could be a formidable competitor in both areas. I enjoy going here just to see what is new. Many times we come away with things we did not intend to purchase.
  • Dillard’s at Christmas
    • Amazing service at two different stores. We go back there a great deal.
  • Chico’s 
    • The same as Dillard’s – but then the stores are small and the employee’s are most helpful and pleasant.
  • Macy’s
    • When you can find someone, it is generally good, generally that is. Finding someone was the trick. I hope Macy’s does well online, it could save them. Sadly, here I really loved Macy’s. I had worked for John C. Shillito in the past (see Lazarus above - they purchased Schillito) which is part of Macy’s history. I still have my Schillito badge from the 70’s.
  • Sears
    • Found the people to be helpful just not sure the store is going to be there long term. 
  • Lowes
    • The store is clean and nice but lacks somewhere with attention, again all appliances can be purchased online and sometimes less expensive. 
  • Home Depot
    • Does better with attention but I am learning not to trust. At this time, I am not very happy with Customer Service at Home Depot. They have never responded to a 2page letter and attachments, sent in February 2017, over a home water heater installation that went wrong.

Online Purchasing Experience

  • Amazon
    • As you can tell I have always had a great experience with Amazon. We have been Prime Members since 2007, 10 years.
  • Best Buy
    • When I have used Best Buy online it has been overall a good experience. I have also been a Rewards member of Best Buy for a very long time. We have been buying from Best Buy since 1994 in Lexington, KY.
  • HP
    • Over the years this has been a GREAT experience including Support.  I have recommended HP for a very long time.
  • Microsoft
    • I have always enjoyed the support from Microsoft and originally I was not their biggest fan – having been a Netscape user back in the early 90’s. Over the years I have become a LARGE fan of Microsoft Software and now their products. It was the store that I had my moments with.
  • Google
    • Always a good experience although it did take a while to figure out how to contact them.
  • Apple
    • I have limited experience with Apple however that which I have had has always been good.