1. Customer Services and Retail Selling
Chapter 12
Customer Services and Retail Selling

2. 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

3. 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

4. Customer Service
High-quality service: A service that meets or exceeds customers’ expectations
Relationship retailing
Activities designed to attract, retain, and enhance long-term relationships with customers
LO 1

5. Exhibit 12.1- A Shopper’s Wish
LO 1

6. Customer Service Customer relationship management
Information technology infrastructure that supports relationship retailing
Fundamental unit of data collection is the customer
Constitutes information on:
Customer
Purchasing behavior
Demographics
Consumer complaints
LO 1

7. Customer Service
Should be adopted and evaluated according to the firms mission
Retailers can develop relationships with their customers by offering:
Financial benefits
Social benefits
LO 1

8. Exhibit 12.3 - Three Basic Tasks of Retailing
LO 1

9. Customer Service
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

10. Customer Service Transient customer: An individual who is:
Dissatisfied with the level of customer service offered
Seeking an alternative store with the level of customer service that is perceived appropriate
LO 1

11. Customer Service Must be integrated with:
Merchandise management - Allocating inventory in proportion to customer demand patterns
Building and fixture management - Building and fixture dimensions influence customer service
Promotion management
Price management - Prices should be:
Clearly marked and visible
Fair, honest, and straightforward
Credit management
LO 1

12. Common Customer Services
Pretransaction services: Provided to the customer prior to entering the store
Convenient hours
Parking
Information aids
LO 2

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

14. Common Customer Services
Personal shopping
An individual who is a professional shopper performs the shopping role for another
Provided by very upscale department and specialty stores offer
Sales transactions
Issues often overlooked by retailers
Clean rest-rooms
Dwell time: Amount of time a consumer must spend waiting to complete a purchase
LO 2

15. Common Customer Services
Posttransaction services: Provided after purchase of merchandise or services
Complaint handling
Merchandise returns
Renting, not buying
Fraudulent employee actions
Shoplift returns
Price switching
Servicing, repair, and warranties
Delivery
Postsale follow-up
LO 2

16. Six Rules to Follow When Handling a Customer’s Complaint
Acknowledge the importance of the customer
Understand the customer’s problem
Repeat the problem (as you understand it) to the customer
Think of all possible solutions
Determine the solution that is fair to both
Make sure the customer leaves feeling satisfied with the solution
LO 2

17. Yours is a Very Bad Hotel
A graphic complaint prepared for:
Joseph Crosby
General Manager
Lisa Rinker
Front Desk Manager
DoubleTree Club Hotel
2828 Southwest Freeway
Houston, Texas

18. In the Early Morning Hours of November 15, 2001, at the DoubleTree Club Houston, We Were Treated Very Badly Indeed.
We are Tom Farmer and Shane Atchison of Seattle, Washington.
We held guaranteed, confirmed reservations at the DoubleTree Club for the night of November
These rooms were held for late arrival with a major credit card.
Tom is a card-carrying Hilton HHonors Gold VIP…
Yet when we arrived at 2:00am… we were refused rooms!

19. Refused Rooms… Even When We’re “Confirmed” and “Guaranteed”?
Mike, your Night Clerk, said the only rooms left were off-limits because their plumbing and air-conditioning had broken!
He’d given away the last good rooms three hours ago!
He’d done nothing about finding us accommodation elsewhere!
And he was deeply unapologetic!

20. Quotations from Night Clerk Mike
“Most of our guests don’t arrive
at two o’clock in the morning.”
-- 2:08 am, November 15, 2001
Explaining why it was
OUR fault that the DoubleTree Club
could not honor our guaranteed reservation

21. We Discussed With Mike the Meaning of the Term “Guarantee.”
guar·an·tee (g r n-t ), n.
Something that assures a particular outcome or condition: Lack of interest is a guarantee of failure.
A promise or an assurance, especially one given in writing, that attests to the quality or durability of a product or service.
A pledge that something will be performed in a specified manner.
(Save this for your future reference.)

22. Mike Didn’t Much Care.
He seemed to have been betting that we wouldn’t show up.
When we suggested that the least he should have done was line up other rooms for us in advance… Mike bristled!

23. Quotations from Night Clerk Mike
“I have nothing to apologize to you for.”
-- 2:10 am, November 15, 2001
Explaining why we were wrong
to be upset that our “guaranteed”
rooms weren’t saved for us

24. The Career Path of Night Clerk Mike (He peaked last week.)
November 15, 2001:
Rude Hotel Clerk
1995:
Subway Sandwich
Maker
2004:
McDonald’s
Sandwich Maker
1985:
Paper Boy
2014:
Septic Tank
Cleaner

25. Mike Wasn’t Too Optimistic About Finding Us a Place to Sleep.
2:15 in the morning is a heck of a time to start looking for two spare hotel rooms!
Mike slowly started dialing around town.

26. Quotations from Night Clerk Mike
“I don’t know if there ARE any
hotel rooms around here… all these
hotels are full.”
-- 2:12 am, November 15, 2001
Just starting to look for alternate
accommodation for us, even though he’d filled
his own house up by 11:00pm

27. Mapped Against Other Hospitality Providers, Your
DoubleTree Club Fared Badly on November 15, 2001.
GROWTH-ORIENTED
DESPISES &
MISTREATS
CUSTOMERS
TREATS
CUSTOMERS
WELL
HEADING FOR COLLAPSE

28. Mike Finally Found Us Rooms Here.
Shoney’s Inn & Suites is a dump.
It is six miles further away from downtown Houston, which makes a difference in morning rush-hour traffic.
Had we wanted to stay at Shoney’s, we would have called them in the first place.
We could only get smoking rooms.

29. The Experience Mike Provided Deviated from Usual Treatment of an HHonors Gold Member.
Expected HHonors Gold Member Benefits
Actual Benefits Provided by DoubleTree Club 11/15
Confirmed reservation
Ignored reservation
Upgraded room when available
No room available
Free continental breakfast
Free confusing directions to shabby alternate hotel
HHonors points plus frequent-flyer miles
Insolence plus insults

30. Even After We Left the DoubleTree Club, Our
Troubles Weren’t Over, as This Timeline Shows.
Jon, a colleague, was arriving in Houston on an overnight flight and coming to join us at the DoubleTree Club first thing in the morning. As we had to go stay elsewhere, we wrote Jon a note and left it in care of Mike the Night Clerk.

31. We Are Very Unlikely to Return to the DoubleTree Club Houston.
Lifetime chances of dying in a bathtub: 1 in 10,455
(National Safety Council)
Chance of Earth being ejected from the solar system by the gravitational pull of a passing star: 1 in 2,200,000
(University of Michigan)
Chance of winning the UK Lottery: 1 in 13,983,816
(UK Lottery)
Chance of us returning to the DoubleTree Club Houston: worse than any of those
(And what are the chances you’d save rooms for us anyway?)

32. Revenue Lost to the DoubleTree Club Houston as a Result of our November 15 Incident
Calendar
2001
Calendar
2002
Shown in U.S. dollars

33. We’ll Be Sending This Presentation to Promus Properties.
And to some friends.
We hope they’ll share it with their friends!
If you’d like a hard copy, us at:
Good luck!
And give our best to Mike!

34. Exhibit 12.6 - Factors to Consider When Determining Customer Services to Offer
LO 3

35. Exhibit 12.7 - How the Retailer’s Sales Force Meets the Expectations of Both Vendors and Customers
LO 3

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

37. Retail Sales Management
Types of retail selling
Retail trades that:
Sell shopping goods want their salespeople to both get and take orders
Sell Convenience goods want the salesperson to take orders
Retailers with:
High margins and high levels of customer service place more emphasis on order getting
Low margins and a low customer service policy emphasize on order taking
LO 4

38. Retail Sales Management
Salesperson selection
Hiring criteria - Retail-selling jobs should be designed to have high levels of:
Variety, autonomy, task identity, feedback from supervisors and customers
Predictors
Demographics
Personality
Knowledge and intelligence
Experience
LO 4

39. Retail Sales Management
Salesperson training- Should familiarize sales force with:
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

40. Various Customer Types
Basic Types
Characteristics
Recommendations
Defensive
Don’t trust any salesperson
Resists communication
Generally uncooperative and will explode at slightest provocation
Avoid mistaking their
silence for openness to
your ideas
Stick to basics
Tactfully inject product’s advantages and disadvantages
LO 4

41. Various Customer Types
Basic Types
Characteristics
Recommendations
Interrupter
Impatient personality
Interrupts sales person
Have perpetually strained expression
Driven and successful people who want result fast
Don’t waste time
Move quickly and firmly from one sales point to another
Avoid overkill
LO 4

42. Various Customer Types
Basic Types
Characteristics
Recommendations
Decisive
Confident in their ability to make decisions
Open to new ideas but want brevity
Highly motivated by self-pride
No canned presentations
Assist
Don’t argue or point out errors in their judgement
LO 4

43. Various Customer Types
Basic Types
Characteristics
Recommendations
Indecisive
Worry about making wrong decision
Want salesperson to make decision for them
Avoid becoming frustrated
Determine need as early as possible
Don’t present too many alternatives
Start with making decisions on minor points
LO 4

44. Various Customer Types
Basic Types
Characteristics
Recommendations
Sociable
Friendly talkative types
Have excess time
Resist closing the deal
Listen for points in conversation where product merits can be interjected
Close the deal subtly and friendly
Impulsive
Quick to make decision
Impatient
Close as rapidly as possible
Avoid any useless interaction and oversell
Highlight products merit
LO 4

45. Retail Sales Management
Sales force competition
Major variable in attracting, retaining, and motivating retail salespeople
LO 4

46. Retail Sales Management
Compensation
Direct-dollar payments (wages, commissions, and bonuses)
Indirect payments (insurance, vacation time, retirement plans)
Basic components
Fixed
Variable
Fringe-benefit package
LO 4

47. Retail Sales Management
Retail sales programs can be broken into:
Straight salary
Salary plus commission
Straight commission
Supplemental benefits
LO 4

48. 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

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

50. Exhibit 12.9 - Selling Process in the Retail Environment
LO 5

51. Exhibit 12.9 - Selling Process in the Retail Environment
LO 5

52. Exhibit 12.9 - Selling Process in the Retail Environment
LO 5

53. The Retail Sales Process
Prospecting: Identifying potential customers with ability and willingness to purchase your product
Closing the sale: Bringing a potential sale to its natural conclusion
Ways to close the sale effectively
Make the decision for the customer
Assume that the decision has been made and ask if the sale will be cash or charge
Ask the customer to select the product or service
Turn an objection around by stressing a positive aspect
LO 5

54. Exhibit 12.10 - Some Closing Signals the Salespeople Should Watch For

55. The Customer-Service and Sales-Enhancement Audit
Audit objectives
Identify the service, salesmanship, and sales-enhancement methods that will increase sales
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
Sales-enhancement programs
LO 6

56. 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

57. 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

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