By Dr. Gary Edwards

Many businesses believe that when the economy contracts, the best way to compete is to offer lower prices. However, Dr. Gary Edwards, Executive Vice President of Client Services, Empathica, argues that focusing on the customer experience will help protect against price erosion by building long-term relationships and customer advocacy.

It’s becoming obvious to retailers that the business with the lowest prices isn’t always going to win. Value often makes sense in retail, notably when a high-priced item isn’t much different from a mid-value one. But what happens to consumers who enjoy sharing experiences rather than just purchasing a tangible product? If they take their partner to the theatre regularly or like to go out with family and friends for dinner, do they downgrade their expectations on these experiences when their disposable income declines?
In a difficult economic climate, consumer spending obviously does decline, however less well understood is that counter to this trend, consumer expectations will rise. If a couple cuts their dining out visits in half (say every two weeks versus once a week), their expectations of good service and a memorable experience is heightened during this occasion. Declines in discretionary spend by consumers results in understandable cutbacks by retailers and restaurants but it is essential these are done with care in order to minimise their impact on customer experiences. The long held business profitability adage of “do more with less” has translated in recent years into a consumer mindset of “get more with less”.

Service game

Businesses must therefore ensure they keep their employees focused on customer service, even in the face of cutbacks and compromises. It’s essential that companies get staff working on the small yet important details that make service experiences memorable for customers, and ensure these happen every time. Staff must be held to account on “romancing” their customers with thoughtful and helpful moments on every single occasion. For most retailers, this can be as simple as ensuring their staff make thoughtful product recommendations versus reciting word for word the “specials of the day”.

It’s important that staff engage with customers and look to build rapport whenever possible. Intentional focus and attention to the needs of someone is foundational to rapport and relationship building. For example, if you’re in a restaurant for the first time and unfamiliar with the menu, a quick tour of what others like, a personal favourite, and/or pointing to something the restaurant is famous for, are all positive ways of welcoming and engaging the customer. It also serves to build anticipation of something tasty and in so doing, enhances the overall experience and perceptions of the product when it arrives. Most notably, none of this “romancing” requires extra labour or dollars and indeed even if more dollars were available, they would not serve to create a better experience. Most moments of engagement and rapport building are just that — brief but important memories of someone taking an extra 30 seconds to listen and to say or do something thoughtful. Whether in a restaurant offering a menu recommendation or in a grocery store being walked to a product the customers is looking for, these small “moments of truth” amount to large differentiators for multi-unit enterprises. They attend positive emotional memories of the occasion, the location and the brand and as such, have the opportunity to feed the habit of customers, bind their loyalty and win them over as advocates to others.

First class delivery

Multi-unit enterprises, both retailers and restaurants alike, need to strive not only for improvement (i.e., raising their standards) but just as diligently towards working through operational details and ensuring consistency in their day to day operations. In retail and hospitality environments there are many behavioural and environmental cues that need to be considered and decided upon in setting service expectations with customers. For example, is there a ‘greeter’ at the entrance of the store or restaurant and if so, is this the most valued employee (e.g., a restaurant owner welcoming and hosting) or one of the least (“Welcome to Wal-Mart”). Further, as we have described, are recommendations thoughtful —“if it’s your first time here, I have to tell you that a lot of people who like sweets love the …”, or overly scripted — “do you want fries with that?”.

It’s also important to attend to moments of “pain” in the experience and to manage these well. The most obvious is payment, as no customer enjoys parting with their money. Think of how most retail and restaurant experiences end on this bad note. The customer pays and unfortunately in too many instances, the server who has a talent for rapport building and service senses the discomfort and is evasive. Customers are routinely abandoned at the end of their experience and left to find their own way out. Yet we know from psychology that both first and last impressions are most remembered. There is some wisdom in the traditional Chinese fortune cookie served with a bill. In a small but important way it puts a smile on the guest to counter their “pain” of payment.

There are many other examples. In the check out process at more than 5,000 Hallmark stores, Empathica has determined the important final cue that produces loyalty, which is to offer affirmation of the thoughtfulness of the card and/or gifts being purchased, and well wishes for the occasion. Looking for a final way to connect with the customer and ensure the last memory is a positive one that drives repeat business and recommendations for others to visit.
For fashion retailer Ann Taylor, the ability to know which customers want to be “in and out quickly” with minimum directed self service versus those requiring not so much fashion advice but rather “what looks good on you” advice is critical. Again, providing great experiences has little to do with adding more staff and much to do with accountability on the sales floor for making every woman successful on her store mission.

Employee engagement and mindset is critical for all retail and hospitality enterprises. Staff for women’s apparel aren’t selling dresses and business suits; they’re helping busy women be successful. Restaurant staff who understand they’re not simply preparing food; they’re making someone’s favourite meal have a mindset that will govern differently the way they cook and present their food. The goal in each case is for businesses to harness employee engagement, create a heightened level of ownership of the customer experience, and win the day by bringing customers back with their friends.