Sales & Customer

From The Torture Chamber To The Spa

Costs and Opportunities in the World of Customer Service.
I went into a well-known shopping department store in Singapore to buy my wife a birthday present. There was not a soul in sight to help me even find the ladies wear department, let alone be of any actual assistance. It was lunch-time during the week and I was desperate!

a) I had a meeting in 30 minutes that was going to last all afternoon, and even worse,
b) it was my wife’s birthday today and I was meeting her for dinner immediately after work.
I simply had no other choice than to get something for her now.

I spotted the Information desk and gratefully loped towards it, only to be met by the vacant, distant eyes of a lobotomized individual who grunted at me. Incapable of coping with what I knew lay ahead if I actually tried to commence a request for help here, I turned and bolted for the escalator, hoping that the department that I needed would appear by divine intervention.

Which, to my utter astonishment and relief, it did! Thanking the almighty, I strode to the counter and waited an interminable amount of time until the lady at the service counter finished doing something irrelevant with some old tissue wrapping paper that ended up all over the floor and under her feet. I recomposed myself and smiled, telling the lady about my situation in a self-deprecating way, expecting that she would laugh and wink knowingly about what a typical “bloke” I was, and then lead me by the arm to the perfect gift that I would just buy and then all my problems would be solved.

But no, this was not to be! She had clearly been let out at the same school for etiquette that her Neanderthal colleague had graduated with flying colours from. Looking slightly frightened and bewildered she pointed somewhere else in the store and released a flurry of abbreviated and randomly connected words that sounded something like someone coughing up a bone in their fish head soup.

That’s it! I am out of here! I cannot stand it for one second longer! Get me out!!
I fled down the escalator swearing loudly and sweating profusely. I vowed never to ever set foot in this place again, which I haven’t in the ten years since that diabolical event. In desperation I dived into the shop next door (a direct competitor) and could not have had a more different experience. It was akin to escaping the torture chamber and miraculously ending up in the spa. I spent nearly $400 instead of the original 200 or so that I had kind of thought about at the beginning of this quest because the lady there asked me questions and showed an interest in me. She asked me about my wife, how old and tall she was, what her favourite things are and what colour her hair and eyes were. She gave me a range of options and then suggested some complementary accessories that worked beautifully with the gift. She was wonderful, and I just wanted to buy the whole shop from her!

I have told this story to just about everyone that I know, and used it as an example on nearly every training course I have conducted. That total sum is a lot of people that probably won’t go to the first store, and will most likely go to the latter as their number one option. But now enough of the soft stuff – lets look at the numbers:

Store 1
I was prepared to pay $200, but would have gone to 400. Loss to the company – $400 – so what if they have turnover of a ten or twenty million a year? Not quite – imagine if this happened once a day for other people like me (of which there are many in Singapore) $400 x 365 = $146,000 – a bigger number, but maybe not that significant in terms of their operating numbers But wait, there are many wealthy locals and over a quarter million expatriates with lots of disposable income in Singapore, and shopping happens to be one of the top two pastimes (along with eating). Let’s say we multiply the number by ten such experiences a day, and now we are getting past the million mark (1.46 million)

But there is more – that’s just dissatisfied customers. What about the unknown quantity, the people that I have told and that each of the other ten people a day may tell, who will then actually avoid going to that store. Singapore is a small place, and as the word gets around, people will choose to go somewhere else. Unless this store does something dramatic with their approach to customer service, the numbers will grow exponentially and the owners will start to wonder why all the money that they are spending on advertising and shop fit outs are having such a lean return.

The cost to companies that select unsuitable customer service people and then fail to train them is astronomical – millions and millions of dollars in unrealised revenue that goes into the tills of their competitors.

Store 2:
Lets use the same numbers – I was going to spend 200 but ended up spending 200 more – if that happens everyday that’s a nice little earner of an additional 73,000 per year, and if all of the staff demonstrate such skills to ten affluent customers a day and they spend a little more, that’s 730 grand a year. Nothing to sneeze at.

But let’s just look at cross selling for a moment. Of course not everyone is going to spend an extra $200 because someone is nice to them. But if there are 1000 customers each day, and on average each customer agrees to spend an extra $2 with their purchase because the assistant displayed an interest in them and asked them some questions, and then was able to direct them towards something nice to go with the purchase, this amounts to $2000 per day, or $730,000 per year. Tell me which department store is not interested in that amount of money? At Singapore pay rates 730 grand is roughly equal to the annual cost of thirty shop assistants.

And how about the word of mouth. If this store has one thousand customers per day, and all of them are equally delighted, how many of those customers are going to return continuously, and recommend their friends to do the same? And then when they get there they spend more than they intended because, well, it’s just so easy to spend money in this place, as the people are just so nice and so friendly and so helpful, and they know their products.

I could postulate some numbers estimating the value of this, but it’s not necessary or worth putting the effort into. The point is made very clearly. People want to be treated as if they are special – they want to feel as though their concerns and their interests are shared by the person in the shop, and that come hell or high water that person is going to look after them, and it doesn’t matter who else is in the store. All we really want is someone willing to give us personal attention with a helpful attitude and knowledge of the products in the department. There’s not that much more to it. Its all about how you make people feel, and being made to feel important comes pretty close to the top of the list.

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