4What is Value? Channel Perspective: Value is a series of activities and processes (the value chain) that provides a certain value to the consumerCustomer Perspective:Value is the perception the shopper has of the value chainIt is the view of all the benefits from a purchase made versus the price paid+ % …..
5Wear the shoes of a customer for a moment? How often does each of us talk about receiving excellent customer service?ANDHow often do we recount horror stories of bad customer service?
6Retail Value ChainRepresents the total bundle of benefits offered to consumers through a channel of distributionStore location and parking, retailer ambience, customer service, brands/products carried, product quality, retailer’s in-stock position, shipping, prices, image, and other elements….
8Value-Oriented Retailing Involves Defining it from a consumer perspectivea clear value/price pointa value position that is competitively defensiblewhat are expected and what are augmented value chain elementsa distinct market segment to which it is targeteda process to communicate the value-oriented approach effectively to the target market…….customer satisfaction goalsways to measure customer satisfaction levels periodically
9Common MISTAKES in building a Value Oriented Retailing Strategy… Planning value with just a price perspectiveProviding value-enhanced services that customers do not want or will not pay extra for (understand your customer!!!!!)Competing in the wrong value/price segment (identify your customers!!!!!)Believing augmented elements alone create value (know your customer!!!!!)Paying lip service to customer service (assuming that the customer is stupid)
11What happens when Customer Service falls short.. In 2012, SMG, a customer insight agency, found in the UK that :Retailers lose out on an estimated £45.38 billion a year by not giving their customers the best possible experience in storeA survey of over 100,000 UK retail and leisure customers discovered that improved interaction with the customer could increase average spend per person from £23.36 to £ close to 40%!
12In this world of High-tech: we all crave High-touch!
13And Retailers are Responding… % Respondents who stated:Perishable/ FoodDurable/ Hard goodsFashion/ Short Life Cycle“We offer a high touch customer service strategy and think skilled employees are critical50%63%64%“Employees play a critical role but do not require special skills or training”38%27%Source RSR Research, December 2012
14The Stated Importance of Customer Service in their Value Chain Clearly Impacts Performance…. % Respondents who stated:Retail WinnersAverage PerformersLaggards“In the last 3 years our workforce has become more important in enabling customer service”83%85%73%“We offer a high-touch customer service strategy and skilled employees are critical”66%47%53%Source RSR Research, December 2012
15In this world of high-tech: we all crave high-touch! Successful Retailers recognize the Role of Customer Service and Invest in it
17Cost of Offering the Customer Service HighLowCustomer Service ApproachPatronage BuildersPatronage SolidifiersDisappointersBasicsHighValue of the Customer Service to the ShopperLow
18Value of the Customer Service to the Shopper Cost of Offering the Customer ServiceHighLowCustomer Service ApproachPatronage BuildersHigh-cost activities that are the primary factors behind customer loyaltyExamples: Credit, GiftsPatronage SolidifiersLow Cost “little things” that increase loyaltyExamples: courtesy, referring to the customer by name, Magic Words, Suggestion Selling (BCCSM Skill Set)DisappointersExpensive activities that do no real goodExamples: Weekday deliveries for dual-earner familiesBasicsLow Cost activities - “naturally expected”. Do not build patronage, but absence can reduce patronageExamples: Free parking, in-store directories, store hygieneHighValue of the Customer Service to the ShopperLow
19Strategy to Tactics in Making this Fail-Safe Investment
20Fundamental Decisions What customer services are expected and what customer services are augmented for a particular retailer?What level of customer service is proper to complement a firm’s image?Should there be a choice of customer services?Should customer services be free?How can a retailer measure the benefits of providing customer services against their costs?How can customer services be terminated?
21Fundamental Decisions How can store managers be empowered to ensure consistent delivery of the chosen customer service configuration?How can each customer facing store associate or employee be empowered to ensure consistent delivery of the chosen customer service configuration?How can the cost and benefits of the empowerment be measured:Training?Process monitoring?Decision making?
22Fundamental Decisions How can technology be leveraged to support processes that deliver chosen customer service elements:Consistently?In a scalable manner?With a quick turnaround?
23Logistics & Supply Chain Strategy & PlanningLogistics & Supply ChainMerchandizingStore OperationsMarketingCustomer ExperienceHow strong is your Customer Service Link? Even Mothers often need to be reminded by their crying child.. Is it time for a little attention?