Chapter 12 Customer Services and Retail Selling

Learning Objectives Explain why customer service is so important in retailing. Describe the various customer services that a retailer can offer. Explain how a retailer should determine which services to offer.

Learning Objectives Describe the various management problems involved in retail selling, salesperson selection, and training and evaluation. Describe the retail selling process. Understand the importance of a customer service audit.

Customer Service High-quality service - A service that meets or exceeds customers’ expectations. A way in which retailers provide the high-quality service expected and reduce customer defections is through relationship retailing programs. Relationship retailing programs - The activities designed to attract, retain, and enhance long-term relationships with customers. LO 1

Customer Service Retailers can develop long-term relationships with their customers by offering: financial benefits social benefits LO 1

Exhibit 12.3 - Three Basic Tasks of Retailing LO 1

Customer Service It consists of all those activities performed by the retailer that influence: the ease with which a potential customer can shop or learn about the store’s offering. the ease with which a transaction can be completed once the customer attempts to make a purchase. the customer’s satisfaction with the transaction. LO 1

Customer Service stopped Transient customer - An individual who is dissatisfied with the level of customer service offered at a store or stores and is seeking an alternative store with the level of customer service that he or she thinks is appropriate. Gives another store the opportunity to convert them What are some of the stores you know which actively work to avoid losing customers – and how do they do it? LO 1

Customer Service It must be integrated into all the following aspects of retailing: Merchandise management Building and fixture management Promotion management Price management Credit management Examples of good and bad? LO 1

Common Customer Services Pretransaction services - Provided to the customer prior to entering the store. Convenient hours – Examples of those which don’t? Information aids – such as? See p. 442 LO 2

Common Customer Services Transaction services - Provided to customers when they are in the store shopping and transacting business. Credit Layaway Gift wrapping and packaging Check cashing Gift cards Personal shopping Merchandise availability Personal selling Sales transaction LO 2

Common Customer Services Personal shopping - An individual who is a professional shopper performs the shopping role for another; very upscale department and specialty stores offer personal shoppers to their clients. Dwell time - The amount of time a consumer must spend waiting to complete a purchase. Want to minimize this. See pp. 448 LO 2

Common Customer Services Posttransaction services - Provided to customers after they have purchased merchandise or services. Complaint handling Accepting Merchandise returns Be careful of fraudulent returns Renting, not buying Fraudulent employee actions Shoplift returns Price switching (harder now) Servicing, repair, and warranties Delivery Postsale follow-up LO 2

Exhibit 12.4 - Six Rules to Follow When Handling a Customer’s Complaint

Exhibit 12.5 - Factors to Consider When Determining Customer Services to Offer LO 3

Exhibit 12.6 How the Retailer’s Sales Force Meets the Expectations of Both Vendors and Customers LO 3

Retail Sales Management Types of retail selling Salesperson selection Salesperson training Evaluation of salespeople LO 4

Retail Sales Management Types of retail selling Retailers that concentrate on the sale of shopping goods want their salespeople to both get and take orders. In lines of retail trade where predominantly convenience goods are sold, the role of the salesperson is that of an order taker. It is generally true that retailers with high margins and high levels of customer service place more emphasis on order getting; those with low margins and a low customer service policy tend to emphasize order taking. LO 4

Retail Sales Management Salesperson selection Hiring criteria Predictors Demographics Personality Knowledge and intelligence Experience LO 4

Retail Sales Management Salesperson training Retailer’s policies Merchandise Customer types Customer choice criteria No active product choice criteria Inadequate or vague choice criteria Choice criteria in conflict Explicit choice criteria LO 4

Exhibit 12.7 - Various Customer Types LO 4

Exhibit 12.7 - Various Customer Types LO 4

Retail Sales Management Evaluation of salespeople Performance standards Conversion rate Sales per hour Use of time Selling time Nonselling time Idle time Absent time Data requirements LO 4

Retail Sales Management Conversion rate - Percentage of shoppers that enter the store that are converted into purchasers. Sales per hour is computed by dividing total dollar sales over a particular time frame by total salesperson or sales-force hours. LO 4

Exhibit 12.8 - Selling Process in the Retail Environment LO 5

Exhibit 12.8 - Selling Process in the Retail Environment LO 5

Exhibit 12.8 - Selling Process in the Retail Environment LO 5

Exhibit 12.9 - Some Closing Signals the Salespeople Should Watch For

The Retail Sales Process Prospecting - Locating or identifying potential customers who have the ability and willingness to purchase your product. Closing the sale - Action the salesperson takes to bring a potential sale to its natural conclusion. LO 5

The Customer-Service and Sales-Enhancement Audit The objectives of the audit Identify the service, salesmanship, and sales-enhancement methods that will produce more sales from the existing shopping traffic. Target the methods by store and selling area that will produce the most significant improvements. Determine the added sales that can be generated by improving the accepted service level, salesmanship, and sales-enhancement programs. LO 6

The Customer-Service and Sales-Enhancement Audit Advantages of the audit: Provides management with a detailed analysis of current sales activity by location and by selling area. Identifies how and where additional sales volume is available. Measures, analyzes, and reports on the specific factors. LO 6

The Customer-Service and Sales-Enhancement Audit Basic service Customer contact Salesperson-initiated contact Customer acknowledgment Salesmanship Merchandise knowledge Needs clarification Active selling Suggestion selling LO 6

The Customer-Service and Sales-Enhancement Audit Impulse purchasing Walkouts LO 6