When UPS first came to Western North Carolina, my father’s company was hired to help with, well, everything. The contract that started out as a vehicle maintenance agreement quickly expanded to include anything that needed to be done. Many of the lessons I’ve learned about business came from time spent with Dad and UPS executives.
The best lesson came when I asked one of the executives why UPS didn’t advertise. The company was experiencing phenomenal growth without spending a nickel on marketing. The response was simple and persuasive: “Our service is the best advertisement we can do.” Decades later, the answer remains a universal business truth.
Somewhere between then and now, people running companies forgot that service differentiates their business from the competition. Service became an expense to be reduced as much as possible in an effort to increase profits. This strategy works until the side effects of less service kicks in. Reducing the quality of service always begins with a short-term boost to profits followed by a long-term drop in sales.
Marketing works better when people are happy with a company’s service. It is more efficient and effective. The service provided doesn’t have to be exceptional or expensive. It simply needs to match positive expectations and preferences. I qualify the previous comment with “positive” because poor expectations are also an option.
Best Buy is a good example of a company that forgot the importance of quality service. Years ago, it was my favorite store. I tend to be a bit geeky when it comes to technology. My equipment needs to be reliable and fast. Best Buy was my go-to store for all things electronic for over a decade. It is my last choice now. The company’s shift from favorite store to shopping pariah began with a change to the return policy. I researched products before making purchases so returns from me were extremely rare. A visit to return something usually meant the product was faulty.
After choosing a laptop that was almost $2,000, I was told that if I returned it there would be a restocking fee. I explained that the only reason that I would consider returning it was if there was a problem. The store associate responded that the reason didn’t matter. The return policy applied to everything and everybody. A slam dunk purchase just became a problem. What if there was a problem? Did I really want to pay a restocking fee to exchange a faulty product? After careful consideration, I completed the transaction while deciding that computer would be my last big purchase at Best Buy.
I still visited the store to see new technology and continued to make smaller purchases. I liked talking to the associates. They were knowledgeable and helpful. In time, that changed too.
The move from Atlanta to rural Western North Carolina came with interesting technology challenges. I found that I needed to install a building to building wireless network. The buildings were separated by a quarter mile. I headed to Best Buy for help. After studying the routers and antennas on display, I asked for help. The associate referred me to the Geek Squad. After laughing out loud and sharing the joke with others, the Geek Squad agent told me that what I wanted to do was impossible. I tried to explain to him that I had researched it and knew that it could be done. All I needed was the equipment. Another round of laughter accompanied with some “blonde” comments followed. I left. U.S. Robotics provided the expertise and equipment I needed. Within a week, the building to building wireless network was up and running.
Since then, I’ve returned to Best Buy a few times. The experiences continue to disappoint:
- A splitter was presented when a diplexer was requested. They look similar on the outside but work differently and are not interchangeable.
- Finding sales associates is a challenge. They meet you at the door but locating a blue shirt helper in the store requires a skilled tracker.
- Inventory management is sketchy. Requests for specific items are often met with “let me check online for you” responses. If I wanted to order it online, I wouldn’t drive to the store.
The chain’s management blames showrooming on the loss of market share. They’ve declared war on the activity with a new price matching policy. The policy sounds good but it comes with rules that limit its benefits. Showrooming is a real issue that can’t be solved by matching prices. Quality service trumps low prices, if the competing price is reasonable. There is a lot of power in instant gratification. Being able to receive the answers needed and walk out the door with the right equipment is a positive solution for most people.
Best Buy has an advantage over the online companies that needs to be exploited. Personal service isn’t available at Amazon. Technology is confusing and constantly changing. It’s hard to get answers to technology questions by talking to a computer monitor. Providing clarity to make the buying decision is the service that people want. It reduces the desire to showroom. Providing that service and price matching gives a competitive edge.
The anti-showrooming strategy adopted by the company is implementing a “stores within the store” merchandising strategy and price matching. Customer service lessons haven’t been learned. To keep from following Best Buy’s lead:
- Determine why customers are leaving. The top five reasons that people stop buying are neglect, boredom, overload, alienation, and lifestyle. Blaming it on the competition is an excuse that will not fix the problem.
- Fulfill positive expectations and preferences. More data is available than ever before. Turn it into information that tells you what people want so your company can deliver.
- Change negative expectations. Has your service been less than stellar in the past? Fix the problems and ask people to give you a second chance. People are surprisingly forgiving.
- Use marketing to reinforce positive service experiences. Sometimes people need to be reminded about them. A good practice is: do it, tell people you did it, and do it again. Repeat.
- Train employees well. The more your employees know the better they can help your customers solve their problems. If saving money on service is an objective, start by improving training. It reduces the time (i.e. cost) required to serve customers and resolve issues.
- Reward quality service. Employees that face disgruntled customers have low morale and a “why bother” attitude. Implement a program that rewards the people who provide the best service. It is a bad attitude antidote.
- Pay attention to details. Initial impressions affect how people respond. Teach employees to communicate a willingness to serve with their tone of voice, words, and general attitude. It disarms unhappy customers.
- Tie marketing results with service levels. This allows you to see cause and effect so you can maximize the return on both.
For information on how you can use service to improve marketing, email Debra at dellis@wilsonellisconsulting.com.
