Apple Store lavishes service on disgruntled iPhone 4 user

The customer enters a teeming Apple store one week after the release of the new iPhone with a head of steam built up over a seven-day period of unalloyed product frustration.

“I want my money back,” the customer says to the first associate by the door. “This phone is a complete failure on every level. And don’t even try to tell me I’m holding it wrong.”

The associate in harm’s way, a maybe-at-most-23-year-old woman, changes her bright smile into a look of sorrowful concern.

“That’s terrible you’ve been having trouble. I’m so sorry. Let me help you right here if you want to return it and get your money back,” she says. “One thing, though--you don’t have to, but would you mind telling me what’s been going on with it? I’d really like to know.”

This initial rejoinder is a pitch-perfect response. She apologizes before doing or saying anything else. She is immediately acknowledging there is not going to be an argument or hoops for the customer to jump through to get satisfaction—in this case wanting his money back. She then does a quick verbal pirouette to express genuine interest in what the problems have been.

After the customer finishes his description of dropped calls, email issues, lost data, and more, the associate again apologizes, sympathizing with the customer’s plight. “I know that must be really tough when you’re on a business call or sitting waiting for an important email,” she offers. “If you have a minute, there’s something I can do that might help quite a bit by just resetting the connection—you won’t lose any data—want me to give it a try?”

The customer, now not wanting to be an impediment to a sincere attempt at correction, agrees to the idea, and at least has temporarily abandoned the idea of getting his money back. The associate returns a few minutes later with a manager—he’s maybe all of 24 years old.

“I’m Andy,” he says. “I hear you’ve been having trouble. We’re going to do a couple of things.”

He tells the customer they’ve done the reset, explains how some of those people who bought the phone in its first few days have experienced connection issues (“it’s about one in 20”), that he wants to give the customer a complimentary “bumper” to surround the outer antenna (“should you want to give the phone another chance”) and that he’d like to do a phone call and email test. The customer obliges and the phone performs perfectly in both sets of tests.

As the customer departs, happy, Andy tells him he still has 21 more days to return the phone, but to watch it carefully over the next week to see if it’s performing as it should.

There are plenty of amazing lessons here. It’s possible the customer happened upon the two greatest sales people in the known universe, but it’s unlikely. It’s also unlikely these two 20-somethings had the years of experience to know exactly how to handle this difficult situation. More believable is an unequalled set of training protocols and logical steps in a selling model that have made Apple stores the envy of retail.

Getting these glimpses into customer and associate interactions is critical to success on the sales floor. One of the reasons we are brought in is to give our client partners the full measure of activities and actions within the environment, and to help them understand enterprise-wide opportunities and persistently occurring barriers to the sale. Video and audio enabled behavioral analytics is our prime methodology for doing so, and it’s often a fascinating way to see how loyalty can be built or ruined on one turn of a phrase.

The Crowds of Black Friday

2009 has been another rough year for the retail sector, as it continues to be battered by rising unemployment, pessimistic consumers, and newly thrifty shoppers. As Black Friday, the traditional start of the holiday shopping season approaches, retail observers are placing their bets. Will customers continue to sit on their wallets, refusing to budge until they see massive discounts? Or will they capitulate in a Christmas shopping frenzy as retailers try to hold the line on prices?

One thing is certain: come Friday, stores will be mobbed as about a quarter of American households shake off their tryptophan-induced stupor and hit the stores (latest one-upsmanship schtick: Old Navy stores will open at 3 a.m., maybe because you can never know the extent of the pent-up demand for cargo pants at that hour of the morning). Last year, Black Friday was marred by a tragic death when a Wal-Mart worker was trampled by an out-of-control bargain-seeking horde. This year, writes the New York Times, stores are taking steps to better manage crowds. The Times reports that Wal-Mart is taking a page from experts who manage throngs at major events like the Super Bowl and the Olympics to prevent crowding. There’s a poetic irony in the fact that as consumers are purportedly pinching pennies, they literally can’t storm the stores fast enough.

Time reports that this year, retailers and shoppers are engaged in a game of chicken as shoppers wait for discounts and retailers try to dig in their heels. But do you think this game of double-dare is the new normal? From now on, might the contest go something like this:

Phase 1: people sit at home on their hands, stubbornly refusing to consume.
Phase 2: retailers put deals and discounts lower and lower and until they finally hit the "magic” percentage off number;
Phase 3: floodgates open; aisles full; cash registers sing; everybody happy; life is good.
Phase 4: retailers quickly repeal the dramatic offers because—oops—they’re too costly.
Phase 5: consumers go back to being unhappy—give retailers the cold shoulder and sit at home, waiting them out until the next time.
Phase 6: see Phase 2.

Back to the hedonic treadmill?

What happens now that Fed chairman Ben Bernanke has officially declared the recession “ likely over?” Consumer spending, still sluggish, is finally on the rise. Nobody is yet breaking out the champagne – and as bloggers and cartoonists among others have warned, the economy won’t truly rebound until jobs return, and right now it’s still not a pretty picture. But is a new frugality here to stay, or will we soon return to some of our old ways? It may depend on your rung on the ladder. While working stiffs grabbed private label bread and took staycations, the rich curtailed their purchases of fine art and sold off the private jets. Sure, the recession slammed the fortunes of rich and poor alike – Bill Gates is out $3 billion -- but the families who had $20 million before the recession and then found their assets depleted to $14 million were never in jeopardy of going hungry. To some extent, the wealthy went on a time-limited spending diet because of a jarring hit to their balance sheet, and because for at least a while it appeared unseemly to flaunt lavish purchases when so many people had fallen on hard times.

But here’s a truism which bears repeating: the rich can only hold out for so long. They really do need, or at least, really, really want what others may call non-essentials , like couture, art, and second homes. Once the stigma lessens, as Michael Silverstein of the Boston Consulting Group says, “…the rich will realize they're rich again and start to spend.” According to the 2009 Mendelsohn Affluent Survey, nearly a third of wealthy households purchased fine jewelry and a fifth purchased artwork or collectibles in the past year. As the recession slowly begins to thaw, the rich are very likely to go back to their old acquisitive ways, driving the recovery further and faster.

Luxury brands are salivating at the prospect they can woo affluent shoppers as they trickle back into the store. MarketWatch reports that at the Saks Fifth Avenue flagship store, the personal-shopping service area is ready and waiting and lavishly appointed with stunning views. In addition, the store is limiting stock and focusing on exclusive brands and lines. High-end brands are also focusing on offering top-notch quality and design; for example, Restoration Hardware has hiked prices 20 to 30 percent to distinguish its offerings from its lower-quality competitors. Exclusivity and great design have also kept Louis Vuitton and Hermes growing impressively, even during the recession. Some luxury retailers are toning down the flash a little, such as Fabergé, which has launched an online venture to allow shoppers to participate in “inconspicuous consumption.” While some have criticized these attempts to lure back the luxury market with high prices, exclusivity, quality, and discretion, we think they just might be enough to get the rich spending again.

Any chance the well-heeled are going to help spend us out of our troubles?

Shhh… Abercrombie is Cutting Prices

Last night at the mall, we saw what it looks like when retailers who don’t want to discount do the dirty deed in hushed tones. Just a few feet inside the lease line at an Abercrombie & Fitch store, we saw fleece tops at 50% off—a whacked price put onto a tasteful little sign no bigger than a postcard. We saw this throughout the store, motivating price points on merchandise clearly meant for the upcoming fall/winter season. This A&F store even had a sign at the entry announcing a back-to-school sale (odd, since prime back-to-school shopping season is behind us). Deep discounts? On current season merchandise? Is this really “we will not become promotional” A&F? Since the onset of the recession, shoppers have flocked to low-price retailers like T.J. Maxx and Ross. Nearly every clothing chain has aggressively discounted to try to win over penny-pinching shoppers. But in the face of all this discounting, A&F has stubbornly held onto its loftier price structure to protect its “aspirational” brand.

Last week, A&F announced that its sales dove a frightening 29 percent in August – the eleventh straight month of double digit sales declines for the retailer. Sure, times are tough and the teen (and parent) clothing budget has been squeezed, but rival Aeropostale, with its less expensive, but still fashionable, apparel managed to increase sales a very respectable 9%. A&F has finally, reluctantly, quietly capitulated to shoppers’ demand for a deal (while still clinging hopefully to the idea of an aspirational brand). “It (discounting) is not the primary vehicle nor will it be the primary vehicle for driving business, but it is part of the balance at this point… but it is not the driving force of this business. The driving force is fashion, quality, aspiration, and will continue to be so,” Chief Executive Officer Michael Jeffries said on an Aug. 14 conference call.

A&F may have done its job of creating a high-priced brand image a little too well. Despite a current move to more price cutting, the company’s success ultimately depends on the willingness of teens to drop $50 on “Perfect Butt” sweatpants once the economy rebounds. Still, now that teens have learned that for the same $50 they can get a pair of sweats and jeans at Aeropostale and still have money in their pocket for a couple of tickets to a movie, it may not be so simple to get them to return. Habituation is a tough monkey to overcome.

Gilly Hicks – We’re Not Sold

When it comes to Gilly Hicks, the lifestyle lingerie emporium aimed at teens and the newest brand in the Abercrombie stable, there’s one thing we can all agree on: the store itself is beautiful, luxurious, and sexy. The look of the space has won raves from fashion bloggers and stock analysts alike. The branding is brilliant, although entirely fictional: Abercrombie CEO Mike Jeffries concocted an elaborate Australian back story for the entirely American underwear brand (who knew “down under” had other meanings?) A portrait of “Gilly” hangs in the stores, to add a faux vintage feel to the shop. Gilly Hicks hopes to be younger and hipper than, but just as successful as, Victoria’s Secret.

The opening of Gilly Hicks has been controversial. Although Citigroup analyst Kimberly C. Greenberger praised the store’s “cute and sweetly sexy” image and said, “We believe Gilly Hicks could be a more wholesome alternative (to Victoria's Secret), and mothers would not mind taking their 15-year-olds to Gilly Hicks to shop,” an assortment of critics have attacked the whole notion of trying to sell sex to teens. Everything from the store’s racy ad campaign, featuring 7-foot-tall posters of naked men, to the website, which broadcasts a video showing women swimming topless, and the effort to sell sexy lingerie to teens has drawn complaints.

But the ultimate question, indeed, the only question is, will it sell? Gilly Hicks represents a huge per store investment, from the home-like front porch exterior to the dimly lit Ralph Lauren-on-steroids interior, with a huge amount of square footage dedicated to selling a tiny passel of products that would fit comfortably inside the closet of a New York City studio apartment. On the one hand, other companies have made big profits using edgy, sexy ads to sell to the teenage set. The other companies in Abercrombie’s stable, Abercrombie & Fitch, abercrombie, and Hollister, have deftly won over their target markets. Unfortunately for Abercrombie, we think it’s highly doubtful that Gilly Hicks is going to help the company bust out of a recession-fueled slump, despite the store’s gorgeous environment. Luxury undergarments for teens are not a natural sell in the best of times, and right now, the retailers that are thriving are mostly value brands aimed at the prudent. Add in the store’s sales crew – the young-side-of-20-something associates look as great as the store, but are without the years of experience in fitting bras and selling intimate wear – and it seems like an even bigger, and more expensive, misstep. What do you think?

Drop a quarter in the jar if you like this post

Maybe I wasn’t in an especially charitable mood, but I thought I had seen it all when I recently spotted a styrofoam cup duct taped to the delivery window of a Dunkin’ Donuts, a sight which gave off the weird vibe that drive-through customers should offer a reward to a forearm for handing them a bag.

There are a few topics that are guaranteed to generate heated arguments on the internet. Is it rude ask people to take their shoes off in your house? Is it tacky to have a cash bar at your wedding? And today’s subject, should behind-the-counter employees solicit tips in a jar next to the register? Anywhere you see counter service, you’re likely to see a jar or cup filled with dollar bills and coins. Cold Stone Creamery has raised the tip jar to an art form – workers break out into loud goofy songs when you drop a bill into the jar. Even teachers have gotten in on the act – one instructor conducted an informal experiment by setting a tip jar on his desk, and found that a few of his students threw in some (promptly refunded) change. Nowhere is the tip jar more ubiquitous than the coffee shop, whether it’s the indie rock dive around the corner or corporate behemoth Starbucks. There’s a certain logic behind the coffee shop tip jar; after all, say baristas, bartenders get tips, and making a latte is at least as complicated as pouring a draft beer.

Tip jars have their supporters. Counter service employees are delighted to get a few extra dollars for their efforts. Store owners and managers are happy to have their employees rewarded without having to raise prices or wages. And some customers don’t mind the jars, or even find some of the more creative hand written signs amusing. But other customers are angered by the creeping spread of tip jars. According to internet tipping guru James G. Lewis, “most people hate” the jars, and “tip jars are out of place at any food-service establishment that does not actually bring the food to your table and keep your drinks refilled.” According to a study by the Emily Post Institute, only 30% of respondents feel obligated to deposit money in a tip jar.

There’s been plenty of research on tipping – we know that younger people tip more than older Americans, people in the Northeast tip more than Southerners, and that people tip more when it’s sunnier outside. But the tip jar is a bit of a black hole. We have some anecdotal observations -- according to business psychologist Larina Kase, “Patrons can feel uncomfortable when there is a tip jar for services they feel do not deserve a tip.” But does the tip jar’s potential customer discomfort outweigh the morale boost for employees? It may be time for a well-designed study on tip jars that could determine whether they help or hurt the top and bottom line.

Retail charm offensive

Bill writes: In his early stand-up days, Jay Leno used to tell the story of the frustrations of being in line at the supermarket. He waits. And waits. And waits some more. Then it’s his turn, and the checker doesn’t even look up to say hello. She’s got her head down in scanning mode. When it’s time to pay, he – thinking he’s a valued customer at a store where he’s just forked over more than $200 – still doesn’t receive an acknowledgment. Not able to contain his frustration, he says to the checker that a simple thank you would be nice. “Why should I?” she says, scoffing, “it says it right here on the receipt.”

Over the years, I’ve seen plenty of cluelessness and rudeness in stores—maybe not quite as bad as the Leno story. I once asked a clerk to help me locate an item that was obviously not in the aisle where I sought his help—he just happened to be the only person anywhere in the store I could find. He stood very still, pivoted his head around to be able to see everything within a three-foot radius of his body, and then proudly proclaimed the item was not there. I suppose it’s not so different from being in a restaurant and asking a passing waitperson for a spoon, only to be told this isn’t their station.

Times are different. There’s a charm offensive going on everywhere. Store traffic is thin—and precious. I get a greeting like royalty as soon as I walk in almost anywhere—even big box stores, where sucking up to customers has never been part of the operational orthodoxy. Employees are now dropping what they’re doing to help and lead and show and answer—and thank. It’s all rather nice, although sometimes a bit desperate—and annoying. I was at Walgreens the other day, needing “navigational remediation” as we sometimes call it in the shopper analytics business. I was taken to the item I sought, and then given a “helpful” two-minute discourse on all the reasons why another brand would be better than my selection.

Oh well. It was better than being taken for granted.