A recent Brickstream poll reveals that 100% of responding retailers state customer service is among the top priorities for their organization. Seventy percent responded that it is ranked number one.

This should be good news to consumers who rank customer service right behind price and location as the most important feature when deciding which shops to frequent. The demand for good customer service has caught the attention of retailers. When asked what sets their stores apart from the competitors, over 80% responded that the level of customer service they provide is a key differentiator for their stores. In fact, customer service is seen as a better way to differentiate than other common factors including the shopping experience at 50%, product assortment with 30%, and price and product quality each with 10%.

With so much importance placed on customer service, it is not surprising that 75% of the responding retailers say that their organization has explicit standards set for their stores. Furthermore, when asked about the impact of raising these standards of service, respondents overwhelmingly believe that they would have increased sales and increased store traffic (70% and 45% respectively). Only 10% believe it would have little or no impact and 5% believe it would result in higher labor costs.
 

With the customer service stakes this high, what is surprising is that retailers are relatively inexact in measuring these customer service levels. There is a wide variety in the approaches retailers use to measure customer service. Nearly 65% use some form of mystery or secret shoppers to determine their customer service levels. Sixty percent use in-store observations, 58% use customer surveys, and 10% rely on industry rankings.

The drawback of these methods of quantifying customer service is the inability to capture unbiased and time-sensitive data. Shoppers who experienced the best – or worse – customer service are most likely to participate in a survey, creating service level data that only represents the extreme experience. Likewise, reports from secret shoppers or in-store observations only take into account a one-time or short-term occurrence. The very nature of these activities introduces a level of bias from the secret shopper or observer. Similarly, the Hawthorne Effect (improvements in productivity or quality resulting from the mere fact that workers knew they were being studied or observed) challenges the validity of these methods.

The lack of a single preferred or proven method of measuring customer service may be best seen in retailers’ difficulty in tying service standards to performance levels. Only half of the respondents in this poll reward in-store employees based on their service level results. There is an obvious disconnect between corporate goals and operational procedures.

So where do retailers think service break-downs most often occur? Nearly 70% say during the check-out process. An equal number believe it happens most frequently with on-floor personnel.

While there are no direct numbers regarding interactions with employees, previous studies have shown that 25% of shoppers find waiting longer than five minutes to checkout to be unacceptable. Two out of three are unwilling to wait 10 minutes. Because most customers stop visiting a store after three poor experiences, retailers need a reliable way to continually monitor and measure customer service provided by the personnel at these critical areas.

Retailers have long adopted technology-based solutions to many aspects of operations, such as pricing strategies and location selection, but have not applied it to measuring or enhancing customer service. Systems that can monitor employee to customer ratios, identify service break-downs at the checkout, and provide real-time behavioral information beyond transaction data give retailers the ammunition they need to deliver on customer service promises – and reap the rewards of increased sales.

A shopper’s customer service experience can ruin an otherwise positive shopping event or salvage a poor one. The influence of the resulting customer satisfaction can’t be ignored. Simply put, if customers aren’t satisfied, they aren’t coming back.
 
 
 
 
 
 
 
This poll was conducted by Brickstream in May 2006. Respondents include professionals from the grocery, consumer electronics, department stores, financial services, consumer packaged goods, and entertainment industries. Responses were collected through an on-line survey published in their bi-monthly e-newsletter and at their trade show booth at the Retail Systems Conference and Expo.