Jeremy’s Journal

Personally, I am looking forward to a positive year ahead. We have the Queen’s Jubilee in June, the Euro 2012 football championships (which will be a great chance for Poland and Ukraine to be viewed in a positive light), followed by the Olympics in the UK. With all of these great events, our restaurants and retail stores have the ability to show both their customers and employees a fantastic time.

One great example of superior customer service is my local Italian deli: the busier the place, the happier everyone is. Nobody minds waiting a minute or two longer, because the service is worth hanging around for. The staff feels the benefit of the buzz they have created themselves—which is very much in line with the FISH! Philosophy from Seattle. The employees are empowered to provide the customer with a memorable experience and enjoy their jobs while doing it. (As a point of note, I saw a friend yesterday who lives in Canada. He’d never heard of the FISH! Philosophy but was very familiar with the actual fish stall at Pike Place Market. I asked him what he thought of it. ‘Phenomenal’ was the reply, just showing how hard-earned reputations spread a long way.)

 We commonly find ourselves more accepting of poor standards when things are busy (As an aside … why is this? Retailers knew Christmas was going to happen in December; shouldn’t they have prepared for more traffic so service doesn’t have to suffer?), but I think it would be beneficial to take notice of my deli. This place is taking the time to make sure the attributes they can control—such as service and product—are worth the wait.  

 2012 is going to be a fantastic year with lots of positives already scheduled to take place in the UK. Let’s reap the benefits and enjoy the success coming our way. It’d be a shame to be too British about it and find reasons to moan before we’ve even got going.

A shoe retailer is trialing a new concept, whereby one of the walls in the store is a giant electronic flat-screen. This huge screen shows all types of shoes and the customer can simply touch on one to learn more about it, view similar designs and see the shoe in a multitude of colours and styles.

Very clever indeed.

At the end of the presentation, a female delegate asked one of the best questions of the day. Taking a bold step away from the general euphoria around the new technology, she bravely asked, ‘If only one person at a time can use this clever techno-wall, won’t that simply upset all the other customers that aren’t able to play on it…and surely that’s not a good thing for the retail industry?’

Silence in the audience. And, notably, silence from the speaker.

I was tempted to get up and applaud. Technology is a brilliant thing, don’t get me wrong. But surely it’s supposed to augment the experience, not cause an unwelcome distraction?

At the same time, the delegate next to me commented in a muffled tone, ‘This techno-wall sounds brilliant…it’s the perfect way to get customers to buy something without having to talk to any staff.'

And, despite nodding in agreement, I found this particularly upsetting. We now live in a culture where many retailers believe customers are better off if they can actually avoid interacting with their staff. Self-service tills? Yes, please. Techno-walls?  Sounds fantastic.

How did this happen? At what point did the retail industry become such a torrid place to work that our staff actually don’t want to be there? There’s been a lot of talk recently about Absolute Loyalty, but this has been primarily between customers and retailers. How about Absolute Loyalty from staff to the company they work for? Or, and here’s a crazy idea, how about Absolute Loyalty from employers to their hard-working and often under-appreciated employees?

Now wouldn’t that make a change? And surely a change for the better, where the resulting impact could be happier and better motivated staff. In turn, this could make interaction between staff and customers something to be proud of rather than something to shy away from. 

We frequently witness ‘staff friendliness’ being one of the key drivers of customer loyalty. And with customer loyalty being intrinsically linked to sales, surely we need to take this seriously? It’s just a pity we can’t get the techno-wall to make friendly chit-chat as well….now there’s something for the development teams to work on…

Last Saturday, as I watched my treasured football team (Watford) lose at home after an appalling 90 minutes in the cold, I turned to the bloke next to me with a resigned look on my face.  ‘Dire’, I said.  ‘Dreadful’, he agreed.  ‘Coming back next week?’ I rhetorically asked.  ‘Yup’, he said.  ‘See you Tuesday’.

This man and I have sat in the same seats at the same football ground for 26 years.  We have a type of loyalty that goes unquestioned, year after year, match after match, defeat after defeat.  Whatever happens on the pitch, however poor the entertainment and however much the prices go up, we remain committed.

Could this type of commitment be described as ‘Absolute Loyalty’?  Unchallenged, unquestioned, unrivaled.  No matter what happens, we’ll be there. 

We see Absolute Loyalty in sport, and also in religion.  I’m keen to know if it can be achieved in the retail and hospitality sectors.

Why is it that certain brands have achieved a customer base who would not consider any other options?  My father would not entertain anywhere but John Lewis when buying electrical equipment.  We all know people who believe Apple is the new religion.  Many customers will get their coffee from the same shop on the way to work without questioning other options.

So what is it that some brands have done to create Absolute Loyalty?  Despite the common trend of mass-discounting, nobody has ever gone to John Lewis believing that is offers the lowest prices on the high street.  Coffee shops certainly don’t pretend that a £2.50 skinny latte is a bargain.  And who would dare imagine Apple offering iPads as a two-for-one deal?

So if price is not a key factor of Absolute Loyalty, then what is?  Clearly, there’s a lot more going on in the heads of our customers.  I believe that the in-store experience has a far greater impact on creating Absolute Loyalty than most of us have given it credit for.  We shy away from it because a) we are not very good at creating memorable experiences and b) it requires time, commitment and some clever thinking.

We can easily implement large-scale discounts for some quick-wins.  However, understanding and improving the customer experience presents a far greater challenge.   In my eyes, and in the eyes of those aiming to achieve Absolute Loyalty, this is a challenge that cannot be ignored.

It’s been a crazy few months of ups and downs in the UK.  One minute we’re happy (sunshine, winning the cricket), the next minute we’re down in the dumps (riots, lack of Olympic tickets). We certainly seem to be in a lengthy spell of inconsistency, where the only constant appears to be that nobody can predict what’s going to happen next. 

With that in mind, I find it surprising that many retailers are happy to plan long-term strategy with a number of unknowns around their customers. How can a business create plans when their customers are still—to a lesser or greater extent—unpredictable? Yet many retailers are resistant to turn to customer satisfaction surveys to eliminate some unpredictability.

Several years ago, this attitude was understandable. Customer satisfaction surveys were slow, expensive, and often quite painful to execute. By the time the results came out, the customer had moved on. However, in 2011, with the internet allowing customer feedback to be available within minutes, and prices costing less per month than a mystery shop, it baffles me why some senior directors are sticking with the vision of “Four mystery visits per year tells me all I need to know about my customers.” Why wouldn’t you want to know what your customers think and take away some of that ongoing unpredictability?

Knowing the health of your brand is one way to reduce unpredictability. In this edition of SMG Insights, we talk about the qualitative work we’re doing with clients to help them understand their place in the market.  

It is continually a delight to see forward-thinking retailers join SMG to start looking at what drives customer loyalty within their brands and using consumer insight to increase business performance. It therefore gives me great pleasure to welcome Iceland Foods Ltd to the SMG UK family, and we very much look forward to working with them on a new customer insight programme.

As always, please let me know if you would like to chat or meet up to discuss anything in this newsletter. Our doors, phones, and inboxes are always open.

I love the fact that everyone in the retail and hospitality sectors wants to make improvements. At two recent trade events, the Retail Week Conference and Retail Forum, the one prevailing theme was 'how can we offer our customers a better experience?' For many years, we have come across old-school (but certainly not unsuccessful) retail leaders who have had the philosophy of 'I know retail like the back of my hand… why do I need to listen to my customers?' and it is a genuine joy to see so many businesses now believing that understanding the hard numbers that capture consumer experience is an essential component of business growth. 

 When I first entered the research sector 15 years ago, the view at the time was that 'measuring the customer experience' was a metaphor for 'let's keep tabs on all our staff.' And whilst maintaining high levels of brand and operating standards is no less important now than in the nineties, thankfully the vast majority of the industry now agrees that using customer research in a positive way brings insights into a business. Many businesses have found that analysis into their insights have led to innovations in customer satisfaction and are paying dividends. 

 The one area that I find continues to interest me is the concept that 'satisfied' customers are not loyal. For too many years the UK has been content as long as our customers were simply 'happy.' A large number of restaurant and hotel chains have measured their levels of customer loyalty by number of complaints and have bonused managers on making significant decreases to these numbers. From our research we have identified that highly satisfied customers are about 2 – 3 times more likely to say they are highly likely to return and recommend than simply satisfied guests. While there is virtue in reducing complaints, it doesn't contain the essential component of growing your business through improving customer loyalty. 

 Customers want to have a good time. They want to be raving fans for the products and services they connect with. They want to talk about their positive experiences online. It's in our best interest to help them get there. Enjoy the long weekends and the short weeks!