Dunne, Lusch, & Carver Chapter 12 Customer Services and Retail Selling

Customer Service The average firm loses half of its customers every five years. Requires constant attention to attract, retain, and enhance long-term relationships with one’s customers. Recall one of the major distinctions between the 1985 definition of marketing and the newest one by Lusch & Marshall* Relationships rather than focusing on exchange Develop relationships with customers by offering two benefits: 1.Financial benefits that increase customer satisfaction Frequent purchaser discounts, upgrades, etc. 2.Social benefits that increase the social experience Water fountains with seating, live, outdoor music on weekends, etc.

Three Basic Tasks of Any Retailer All retailers must perform these three strategies in order to have a shot at success 1.Get consumers into your store (i.e., traffic). 2.Covert these consumers into customers by having them make a purchase (i.e., conversion- or closure-rate). 3.Do both of the preceding in the most efficient manner possible.

Customer Service What is meant by customer service?

Customer Service What is meant by customer service? All those activities performed by the retailer that influence: 1.The ease with which a potential customer can shop or learn about the store’s offering (i.e., pre-transaction services). 2.The ease with which a transaction can be completed once the customer attempts to make a purchase (i.e., transaction services). 3.The customer’s satisfaction with the transaction (i.e., post- transaction services).

Transient Customers When service is lacking… Pre-transaction, the consumer is unlikely to enter. Transaction, the consumer is likely to back out. Post-transaction, the customer is unlikely to return. Lackluster service creates transient customers. But what are they?

Transient Customers When service is lacking… Pre-transaction, the consumer is unlikely to enter. Transaction, the consumer is likely to back out. Post-transaction, the customer is unlikely to return. Lackluster service creates transient customers. But what are they? Individuals who are dissatisfied with the level of customer service offered at a store(s) and is seeking an alternative store with the level of customer service that they feel is appropriate.

Customer Service It must be integrated into all the following aspects of retailing: Merchandise management Building and fixture management Promotion management Price management Credit management

Factors to Consider When Determining Customer Service Levels

Retail Sales Management The salesperson is a major determinant of a store’s overall image. Two Types of Retail Sellers: 1.Order takers 2.Order getters Which would likely work for a retailer selling… Convenience goods? Shopping goods?

Salesperson Selection Retailers should design the sales job so that it involves high levels of: Variety, Autonomy, Task identity, and Feedback from supervisors and customers.

Customer Choice Criteria Two of the most difficult tasks of a salesperson is: 1.Identifying the customer’s choice criteria and 2.Tailoring one’s selling strategy to fit that choice situation. Four General Choice Criteria Situations: 1.No active product choice criteria 2.Inadequate or vague choice criteria 3.Choice criteria in conflict 4.Explicit choice criteria *Note these are purchase situation specific, not customer specific*

Various Customer Types

Various Customer Types (cont.)

Evaluating Salespeople Possible standards include: 1.Conversion rates 2.Sales per hour 3.Use of time Selling time Non-selling time Idle time Absent time What are the strengths/weaknesses of each? What does each incentivize/overlook?

The Retail Selling Process The length of time a salesperson spends in each one of the following steps depends upon the product type, the customer, and the selling situation. Steps in the selling process: 1.Prospecting 2.Approach 3.Sales presentation 4.Closing the sale 5.Suggestion selling

Prospecting 1.Find potential customers (or prospects) that are willing to buy a given product. 2.Qualify potential prospects as to their ability and buying power. Can they buy, given they want to buy? What is the goal of prospecting?* Selling an appointment, not a product*

Approach The first 15 to 30 seconds of a salesperson- customer interaction sets the mood for the entire sale. Recommended steps include: 1.Greet/acknowledge the customer. Never ask “May I help you?” Why? Instead say, “Hello” or “What may I show you today?” 2.Listen to the customer’s needs. Remember the key to the “Blue Grapefruit” exercise & selling quiz was listening* 3.Ask (only a few) clarification questions regarding needs.

Sales Presentation The goal is to make the customer want to buy your product or service. The salesperson should: 1.Determine the right price range of products. 2.Select what he/she believes is the appropriate product or service to satisfy the customer's needs. 3.Inform the customer about the merchandise in an appealing manner. 4.Help the customer to decide on the product or service that best fulfills the customer's needs.

Closing the Sale This is the natural conclusion to the selling process. The key is to determine what is going on in the customer's mind. The salesperson has several options: 1.Make the decision for the customer. 2.Assume the decision’s made and ask if it will be cash or charge. 3.Ask the customer to choose which product or service they want. 4.Reverse an objection by emphasizing the fact that the product's longer life will compensate for its higher initial cost. 5.While it’s the natural conclusion, many salespeople have a hard time closing

Suggestion Selling The “Would you like fries with that?” portion of the sale. A salesperson should attempt to determine if the customer has any other needs, in addition to the ones that have just been met through a transaction; there is always the possibility of an additional sale. Examples: Warranties Other colors or sizes (e.g., for clothes) Complimentary products (e.g., entertainment center for a new TV)

The Customer-Service and Sales- Enhancement Audit The objectives of a customer service audit include: 1.Identify the service, salesmanship, and sales- enhancement methods that will produce more sales from the existing shopping traffic. 2.Target the methods by store and selling area that will produce the most significant improvements. 3.Determine the added sales that can be generated by improving the accepted service level, salesmanship, and sales-enhancement programs.

The audit measures, analyzes, and reports on specific factors which are reported by selling area within each company store. Management can then target train in areas like: 1.Basic Service 2.Salesmanship 3.Sales Enhancement The Customer-Service and Sales- Enhancement Audit

What You Should Have Learned… Chapter’s Learning Objectives 1.Why customer service is so important in retailing 2.The various customer services that a retailer can offer 3.How a retailer should determine which services to offer. 4.The various management problems involved in retail selling, salesperson selection, and training and evaluation. 5.The retail selling process. 6.The importance of a customer service audit.