01 June 2009
That the customer is king is something we all have heard innumerable times but during a recession this is the absolute truth and businesses who ignore this fact do so at their own peril.
However, if we go by a recent study of the UAE's retail sector, which was conducted by Ethos Consultancy, then retailers need to do more in order to make customers open their purse strings, and that too smilingly.
The study, which was conducted in April and May, said only 35 per cent of customers were extremely satisfied with the services offered by the retail sector.
The objective was to find out how outlet staff behave with prospective customers; how they deal with customers making an inquiry or raising objections about products and services; to establish whether outlet staff make attempts to up-sell, cross-sell and add on products; find out if staff in stores are proficient and enthusiastic with regard to product knowledge and to establish overall customer service and sales performance of each of the outlets. Discussing some of the key findings, Halima Anderson, Business Unit Head, Non-Government, Ethos Consultancy, Dubai, told Emirates Business: "We discovered that service was lacking. The staff did not approach customers and engage them, they lacked a sales approach, that is asking the customer the right questions to establish their needs; there was a marked lack of interest in up-selling and recommending more products. Also, if the customer raised objections to the price of a product the staff did not provide an explanation about why the product was priced the way it was and why it was worth it and they did not even recommend products that were more suited to that customer's budget. In fact, some of them recommended their competitors in order to get better priced stuff.
"There was also no interest in closing the sale. The staff clearly had low self-esteem and was afraid to make suggestions to customers. Their responses were robotic and if you said "no" to a product they accepted it and did not push the customer to buy something else."
The study said 28 per cent of customers said sales people did not ask the right questions to establish their needs, while nine per cent said sales people did not have enough knowledge about products/services. Twenty-two per cent of sales people did not suggest/recommend the right product that met the needs of the customer, while 43 per cent did not attempt to gain a purchase decision from the customer and 54 per cent customers said that the staff did not cross-sell/up-sell products or services.
Sixty-one per cent of customers polled said sales agent did not suggest any add-on products or services, while 19 per cent said if they were a genuine customer and not posing as a customer then they would not have bought anything from the staff serving them and 12 per cent who bought something said they will not go back to the same outlet for future purchases.
The study said 39 per cent of the customers were not greeted by the sales agent upon entering the outlet, 55 per cent of them were not wearing a name tag, 27 per cent of them did not give a farewell greeting or visit them to visit the outlet again, 16 per cent said their experience left them with no desire to visit the outlet again, 18 per cent did not leave the outlet with a positive impression, 16 per cent would not recommend the outlet to their friends/families and colleagues.
Going into the overall satisfaction in customer service, only 35 per cent of them were extremely satisfied with the quality of service, 44 per cent were just satisfied, 13 per cent were neither satisfied nor dissatisfied, seven per cent were dissatisfied and two per cent were extremely dissatisfied.
Giving advice to the retail sector on how to improve the satisfaction levels of the customer, Anderson said: "The companies need to consider the recruitment process seriously. They spend a lot of money on interiors and on stocking their stores but there is little or no investment in recruiting staff. They need to recruit better people and put the right people in the right place.
"The staff needs to be properly trained, it should be an ongoing process, and they need to monitor and measure staff performance.
"How can you train staff and then not monitor what they are doing as then there is no way to find out if they even understand what they are selling. Also, how will you measure their strengths and weaknesses?
"Measure staff performance regularly and there should be a reward and recognition programme for them. The company needs to find out what the staff feel about the working environment by doing an Employee Satisfaction Survey that guarantees anonymity and where there is no fear of a backlash. If the staff is happy then the customer will be happy as the staff will put their best foot forward.
"Also, it is vital to get customer feedback from the employees who interact with customers so that you know what the customer needs and feels. So all round communication is important. Some brands were practicing good customer service in some locations and not in others. There was inconsistency in recruitment, training and measurement of performance. We found this across outlets, across brands. If one outlet of the same brand is doing better than the other they are not taking lessons from each other. There is a lack of communication among brand outlets."
Out of the 22 retail sectors that were included in the study, the top five performing sectors were jewellery, watches, restaurants, cafés and electronics.
Giving advice to the top five for improving their performance further, Anderson said: "Product knowledge is a must. There is no point in only spouting out the information, you must believe in it and sell with confidence. There should be a genuine approach towards the customer and not a robotic response.
"In the top five sectors, the premises were great, the initial and farewell greeting were there but customer service and sales skills were low across all the sectors. Up-selling, cross-selling, suggestions and recommendations were lacking even in the top five.But on the whole we were surprised."
The five sectors that performed the worst were fashion accessories, baby fashion, general fashion, department stores and ladies fashion.
Giving advice to the poor performers, Anderson said: "They can improve their performance by engaging the customer and asking them questions in order to find out what the needs. They also need to make an attempt to close the sale, show interest in the customer and show enthusiasm. They need to take pride in their work as at the end of the day it is work that pays your bills."
Ethos Consultancy said a recent CBRE survey revealed 46 per cent of the world's top 280 retailers have a presence in Dubai, next only to London, Paris and New York City.
This is a fantastic achievement for Dubai's retail sector, but purchasing a franchise or brand outlet and fitting it out with top-class interiors does not guarantee footfall or encourage loyal, repeat customers, especially during these tough times.
Anderson said: "In order to emerge winners during and after the crisis retailers need to create customer loyalty and retention by making them feel valued when they enter the location. Because of the recession customers are being selective about where they spend their money. When they go to an outlet, where the staff greets them, remembers their name and likes and dislikes, recommends stuff they are more likely to spend more than they came for. Retailers need to cater to their ego, it always works. If you will create a rapport with the customer and make them feel like a king then they will come to you again and again and bring friends, too," she said.
"This is the kind of service that will separate you from the other," Anderson said.
That the customer is king is something we all have heard innumerable times but during a recession this is the absolute truth and businesses who ignore this fact do so at their own peril.
However, if we go by a recent study of the UAE's retail sector, which was conducted by Ethos Consultancy, then retailers need to do more in order to make customers open their purse strings, and that too smilingly.
The study, which was conducted in April and May, said only 35 per cent of customers were extremely satisfied with the services offered by the retail sector.
The objective was to find out how outlet staff behave with prospective customers; how they deal with customers making an inquiry or raising objections about products and services; to establish whether outlet staff make attempts to up-sell, cross-sell and add on products; find out if staff in stores are proficient and enthusiastic with regard to product knowledge and to establish overall customer service and sales performance of each of the outlets. Discussing some of the key findings, Halima Anderson, Business Unit Head, Non-Government, Ethos Consultancy, Dubai, told Emirates Business: "We discovered that service was lacking. The staff did not approach customers and engage them, they lacked a sales approach, that is asking the customer the right questions to establish their needs; there was a marked lack of interest in up-selling and recommending more products. Also, if the customer raised objections to the price of a product the staff did not provide an explanation about why the product was priced the way it was and why it was worth it and they did not even recommend products that were more suited to that customer's budget. In fact, some of them recommended their competitors in order to get better priced stuff.
"There was also no interest in closing the sale. The staff clearly had low self-esteem and was afraid to make suggestions to customers. Their responses were robotic and if you said "no" to a product they accepted it and did not push the customer to buy something else."
The study said 28 per cent of customers said sales people did not ask the right questions to establish their needs, while nine per cent said sales people did not have enough knowledge about products/services. Twenty-two per cent of sales people did not suggest/recommend the right product that met the needs of the customer, while 43 per cent did not attempt to gain a purchase decision from the customer and 54 per cent customers said that the staff did not cross-sell/up-sell products or services.
Sixty-one per cent of customers polled said sales agent did not suggest any add-on products or services, while 19 per cent said if they were a genuine customer and not posing as a customer then they would not have bought anything from the staff serving them and 12 per cent who bought something said they will not go back to the same outlet for future purchases.
The study said 39 per cent of the customers were not greeted by the sales agent upon entering the outlet, 55 per cent of them were not wearing a name tag, 27 per cent of them did not give a farewell greeting or visit them to visit the outlet again, 16 per cent said their experience left them with no desire to visit the outlet again, 18 per cent did not leave the outlet with a positive impression, 16 per cent would not recommend the outlet to their friends/families and colleagues.
Going into the overall satisfaction in customer service, only 35 per cent of them were extremely satisfied with the quality of service, 44 per cent were just satisfied, 13 per cent were neither satisfied nor dissatisfied, seven per cent were dissatisfied and two per cent were extremely dissatisfied.
Giving advice to the retail sector on how to improve the satisfaction levels of the customer, Anderson said: "The companies need to consider the recruitment process seriously. They spend a lot of money on interiors and on stocking their stores but there is little or no investment in recruiting staff. They need to recruit better people and put the right people in the right place.
"The staff needs to be properly trained, it should be an ongoing process, and they need to monitor and measure staff performance.
"How can you train staff and then not monitor what they are doing as then there is no way to find out if they even understand what they are selling. Also, how will you measure their strengths and weaknesses?
"Measure staff performance regularly and there should be a reward and recognition programme for them. The company needs to find out what the staff feel about the working environment by doing an Employee Satisfaction Survey that guarantees anonymity and where there is no fear of a backlash. If the staff is happy then the customer will be happy as the staff will put their best foot forward.
"Also, it is vital to get customer feedback from the employees who interact with customers so that you know what the customer needs and feels. So all round communication is important. Some brands were practicing good customer service in some locations and not in others. There was inconsistency in recruitment, training and measurement of performance. We found this across outlets, across brands. If one outlet of the same brand is doing better than the other they are not taking lessons from each other. There is a lack of communication among brand outlets."
Out of the 22 retail sectors that were included in the study, the top five performing sectors were jewellery, watches, restaurants, cafés and electronics.
Giving advice to the top five for improving their performance further, Anderson said: "Product knowledge is a must. There is no point in only spouting out the information, you must believe in it and sell with confidence. There should be a genuine approach towards the customer and not a robotic response.
"In the top five sectors, the premises were great, the initial and farewell greeting were there but customer service and sales skills were low across all the sectors. Up-selling, cross-selling, suggestions and recommendations were lacking even in the top five.But on the whole we were surprised."
The five sectors that performed the worst were fashion accessories, baby fashion, general fashion, department stores and ladies fashion.
Giving advice to the poor performers, Anderson said: "They can improve their performance by engaging the customer and asking them questions in order to find out what the needs. They also need to make an attempt to close the sale, show interest in the customer and show enthusiasm. They need to take pride in their work as at the end of the day it is work that pays your bills."
Ethos Consultancy said a recent CBRE survey revealed 46 per cent of the world's top 280 retailers have a presence in Dubai, next only to London, Paris and New York City.
This is a fantastic achievement for Dubai's retail sector, but purchasing a franchise or brand outlet and fitting it out with top-class interiors does not guarantee footfall or encourage loyal, repeat customers, especially during these tough times.
Anderson said: "In order to emerge winners during and after the crisis retailers need to create customer loyalty and retention by making them feel valued when they enter the location. Because of the recession customers are being selective about where they spend their money. When they go to an outlet, where the staff greets them, remembers their name and likes and dislikes, recommends stuff they are more likely to spend more than they came for. Retailers need to cater to their ego, it always works. If you will create a rapport with the customer and make them feel like a king then they will come to you again and again and bring friends, too," she said.
"This is the kind of service that will separate you from the other," Anderson said.
Shopping Around
Participants of the study went to outlets in Abu Dhabi, Dubai and Sharjah and made a total of 2,284 visits to 558 retail outlets, covering 115 brand names in 37 retail shopping locations, including 10 major shopping malls in the UAE.
The study was conducted among 22 major retail sectors in the UAE, including automobile, home furnishing, baby fashion, jewellery, cafés, ladies fashion, cosmetics and perfume, men's fashion, department stores, opticals, electronics, pharmacy, entertainment, restaurant, fashion accessories (handbags/leather luggage), fast food, sporting goods, telecommunications (mobile phones and accessories), footwear, travel agencies, general fashion and watches.
By Reena Amos Dyes
© Emirates Business 24/7 2009
