You’ve gathered your customer insights and made the changes. Your website is streamlined and easy to use. Your add-on services are perfectly aligned with customer needs. You have invested in the finest training for your employees. Your IT upgrades ensure that your staff has up-to the-second information at their fingertips.
But somehow nothing is changing. Your sales are flat, and your customer experience scores are static. What’s wrong?
Tell me, how good are your line managers?
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Gallup’s research found that the top two drivers of customer engagement in the fast food industry were “Being Treated as a Valued Customer” and “the Warmth of the Greeting,” both dependent on the customer-facing employees. Similarly, Great Clips discovered that the stylist’s smile had a huge impact on repeat customers. But the impact of an engaged employee goes way beyond this immediate connection.
Have you ever visited a store with carts strewn around the
lot, or visited a restaurant with signs promoting an event that happened several
days ago? These clues
have a strong indirect impact on the customer experience – and never occur
where employees are engaged. Engaged employees clear the parking lot, maintain
signage, and even clean the bathrooms.
The trouble? Front-line employees in the service sector turn
over regularly, making it harder to engage them from a corporate location. How
do you ensure engaged employees without breaking the bank?
Chick-fil-A has found the answer. Have you ever visited one
of their restaurants? If not, go out of your way to order a sandwich (make sure
to go inside) to learn how to run an effective services location - even if it
isn’t a restaurant. Their employees greet you with a smile, and go out of their
way to make you at home, even bringing your food to your seat.
I met a manager at Pizza Hut’s corporate office who spoke
lovingly about Chick-fil-A. She told me how a nearby Jimmy John’s offered $1
sandwiches for their grand opening. But the line at the Chick-fil-A next door
was longer – even without a promotion! The company does not have Minnesota
locations, so I had to wait until visiting St. Louis to give them a try. Sure
enough, the experience was exactly as promised – smiling, friendly employees greeted
me, and went out of their way to make certain I had a great experience.
How do they do it? It’s certainly not about their food. It’s
good, but nothing spectacular. While Taco Bell tries to create revenue by
creating new – yet surprisingly similar
– food items, and Subway discounts their sandwiches to $5, Chick-fil-A puts its
efforts into hiring the right management teams for its restaurants. It’s a
long-term bet, but a good one. They know that the right line manager makes the
right experience, so they invest their time and money here. Training is
important – and they do train their managers well. But the company knows that
you cannot train for management skills where no capability exists. So they
focus on discovering the right talent in their hiring process.
Great service companies recognize that their investment
needs to be on people before product. For a contrary example, witness the fall
of Circuit City, which fired
3,400 of its most expensive salespeople to save on labor costs. They ended up
with less-effective employees, their sales spiraled, and the formerly good-to-great
company never recovered. Great, engaged employees pay for themselves – but the
relationship is not always directly visible.
Best Buy serves as another cautionary example. When Apple
began their rise as a consumer electronics retail juggernaut, Best Buy
responded by cutting labor and training to compete on price. Not Apple. As
reported in the Wall Street Journal, Apple’s
sales philosophy is “not to sell, but rather to help customers solve problems.”
This focus on hiring enthusiasts has resulted in Apple seeing the highest
sales per square foot of any national retailer - $6,000. Meanwhile, Best Buy cuts
labor and management while teaching its staff to push service plans, and their numbers
are 1/7 of Apple’s, and declining.
Hiring the right manager is your most critical step in
creating the right customer experience. Great managers impact your employees by
creating an environment where they feel valued and trusted. That feeling is
then transferred to customers. It takes time for the financial impact of a
manager to be felt. Reduced attrition saves money over time. Similarly, while a
terrific employee may make more sales today, their greatest effect is when your
customer comes back six months later or refers a friend to your store.
Cutting back on staff always
looks good in the short run. Thirty days after the cuts, your sales are flat but
your costs are down – a win! But it will catch up with you. Best Buy found
that for every 0.1 increase in employee engagement (on a 5-point scale), each
store increased profits by $100,000 a year. After a change in leadership the
company stopped investing in its employee engagement program, and now sales are
dropping through the floor.
Learn from Best Buy, Circuit City and (most importantly)
Chick-fil-A. Take the long-term view. If your sales and customer scores are
flat, look first to your managers, and then to your staff. Then invest in them
for long-term success.
Jim Tincher is the Principal Consultant at Heart of the
Customer and has more than 20 years of experience in driving customer
engagement. Jim’s expertise has led to engagements as far-reaching as
developing consumer tests at Best Buy, creating a Customer Insights capability
at UnitedHealth Group, and consulting with clients ranging from global fast
food companies to utilities to international manufacturing and service
companies. Jim is a dynamic speaker, passionate about building a world-class
customer-inspired experience that results in customers who come back time and
again. Jim writes, speaks, and consults with companies to help
them develop a great customer-inspired experience at www.heartofthecustomer.com.
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