Engaging with the customer

“Can I help you?”

“Doing okay over here?”

“How’s everything?”

We’ve all been on the shopper’s end of these low-value contact questions in stores, restaurants and whatever chain retailer trains its associates with the blunt instrument of “engage the customer.” It’s gotten to the point where such expressions are so empty, they’ve become little more than verbal tics on the part of employees—rote recitations they almost cease to be conscious of even asking.

And there’s a perfect synchronicity to this, since customers are barely conscious of these low-impact greetings, either. In our work with retailers, we hear this literally thousands of times. As an example, associates are typically trained and expected by management to greet the entering customer. Too often, this requirement gets translated by employees into saying “hi.” From a courtesy standpoint, this may sound better than no acknowledgment at all, though we’ve yet to see a higher buy or conversion rate when comparing customers who get a “hi” to those who enter with the absence of any greeting. Not surprisingly, most customers don’t even acknowledge this greeting and walk right beyond the associate saying it—not even saying “hi” back. That’s a big bowl of nothing for a key component of a customer engagement initiative.

“Doing okay over here?” is another low-percentage expression, a perfect invitation for the customer to say yes, fine, just looking.

Once we diagnose how interactions like this are working or aren’t with video and audio behavioral analytics, we provide retailers with the approach to make contacts count more—not in a theoretical, one-off way, but with a selling model that can be scaled.

Today’s Wall Street Journal has an interesting article on how retailers are pushing enhanced sales tactics to drive top-line growth. The realization to bring about more sophisticated training is sinking in, which comes from the realization these chains have a way to go before they can gain more traction on the sales floor.

Home Depot is doing something simple and smart by training cashiers (sometimes the only store personnel who shoppers interact with) to ask customers if they found everything they were looking for—and if not, to call the aisle to determine whether the item is in stock (the secret to success will be if the cashier has better luck finding someone than the customer perhaps did—but the idea of the cashier backstopping the sales process is a good one). While “did you find everything you need?” runs the risk of becoming a new verbal tic at Home Depot, it certainly has a fighting chance of success because the inquiry is offered at an important moment of truth, and requires a specific action step for the cashier to take should the customer be wanting.

The pleasant shopper

A casually dressed but stylish woman enters the store with her pre-teen daughter and stops to say hello to the associate who’s stationed near the entrance. She’s extremely friendly, and has a large shopping bag of items from a neighboring store. She tries on many things during her hour-long visit. This woman is quite a shopper! She leaves her daughter in the store to run out to the car because she had forgotten her checkbook. During her visit, she approaches a salesperson at the cash wrap several times with questions about various items, and asks about returns.

When we looked at the videotape, it was clear she had stolen five items during this visit, totaling about $350.

From the moment we saw her cross the lease line, she sold herself repeatedly and extremely convincingly to the store associates. Unlike most customers who are greeted at the entrance but keep walking to some real or imagined destination point within the store, she actually stopped to return the salutation and exchange pleasantries. She carried her shopping bag proudly – almost flaunting it to make sure it was in full view of everyone, as if to say you have nothing to worry about with me or my bag or my previous purchases or even my credentials as a spender. She sold herself by speaking with three different associates -– for her, there was no hiding or skulking around in the aisles like some common shoplifter.

With more than a dozen cameras positioned throughout the shopping environment, we caught her every move. We watched as she waited to see where the associates were positioned, biding her time to make sure two of them were occupied with other customers. We watched her use the empty boxes in her shopping bag to conceal each item she stole. We watched her leave the store with the now-full shopping bag to put the loot in her car before returning.

Who would suspect? She was nice, she looked associates in the eye, and even entrusted them with her daughter for the three minutes when she ran to her car. And what was suspicious about leaving with the same shopping bag she came in with? She was, after all, going to return to finish her shopping and get her daughter.

While our studies are typically designed to increase conversion, items per basket, or sales per square foot—we call them the "forces of good" -— we often encounter shopper behaviors like this one and work closely with our clients to diagnose the problems and prescribe solutions.

What do you think are the most immediate lessons to be learned from this woman’s caper?

Mmm, mmm, soup shopping

Last week, The Wall Street Journal ran “The Emotional Quotient of Soup Shopping,” an interesting behind-the-scenes piece on Campbell’s redesigned soup labels. Campbell, in an effort to connect with customers (and boost sales), uses new neuromarketing techniques to measure physiological reactions to their marketing. A few years back, the company uncovered the idea that customers’ reported reactions to ads bore little relationship to actual soup sales. Campbell is hoping that biometric tools measuring factors like perspiration and heart rate, combined with deep interviews, will more accurately measure the effectiveness of the company’s package design and advertising. Based on this new research, Campbell will hold onto the iconic red and white label for its three biggest sellers, but other varieties will feature “larger, more vibrant pictures of soup.”

We’re a little skeptical about the benefits of neuromarketing research alone, since it measures emotional intensity without content or context. However, Campbell’s is onto something here. By combining biometric data with carefully crafted deep in-store interviews and store observations, they have been able to zero in on how customers really perceive their cans. As Campbell and other companies are increasingly realizing, there is no substitute for in-store research and moment of truth observation, questioning, and analysis. After all, when asked why they eat more soup or not, people tend to “say they don't think of it,” according to Doug Conant, Campbell's chief executive.

Other methods, like focus groups and surveys can also provide valuable information, but they often need to rely on the shoppers’ unreliable short-term memory or their projection of future behavior and intent. When companies rely too heavily on focus groups and survey data and neglect to closely observe how shoppers interact with their designs in the store, like Tropicana did with their short-lived redesign, they run the risk of damaging their brand and alienating consumers—or simply half solving the same question year in and year out.

What do you think--will customers respond to Campbell's well researched redesign? Or will they clamor for a return to the familiar red and white label?

Want to do something fun? Sorry, not today.

We’re a few snowy days from February 27, otherwise known as Open That Bottle Night. The night was invented by the two Wall Street Journal wine columnists -- in their words, “You know that bottle of wine you've been keeping around for that special occasion that never arrives or because the wine is always going to be better tomorrow? Open that bottle!”

Curious, because you might think we wouldn’t need to be prodded into taking part in something as pleasurable as a bottle of wine.

A recent New York Times article by John Tierney explored the surprisingly widespread human tendency to procrastinate pleasure. We wait to use gift cards, wait to redeem frequent flier miles, and endlessly put off visiting our own hometown tourist attractions. According to a study conducted by Suzanne B. Shu and Ayelet Gneezy, professors of marketing at the University of California, Los Angeles, and the University of California, San Diego, people who have moved to Chicago, Dallas and London visit fewer local landmarks during their first year than the typical tourist visits during a short stay. The only time Chicagoans run around visiting local attractions is just before they are about to move out of town. The same professors gave people gift certificates for movie tickets and French pastries. Some of the certificates expired in a few weeks, while others didn’t expire for two months. The people who got the longer term certificates were more confident they would redeem the gifts, but less likely to actually pull the trigger. It turns out we overestimate how much free time we’ll have in the future. And we become overly focused on imagining idealized scenarios, in which we paint pictures of achieving maximum value and pleasure from miles, gift cards, or bottles of red—without acting to turn these “magical thinking” thought processes into realities.

The Times suggests consumers learn from this research and quickly cash in gift certificates and miles, and that we stop procrastinating pleasure. There might be a few lessons for retailers as well – while customers (and legislators) say they want gift cards that don’t expire, deadlines are actually in the customer’s best interest. Also, this counter-intuitive behavior among gift card holders suggests there might be new, interesting information to be discovered in how shoppers use gift cards. Interesting insights could be well be found in a study using video analytics and shop alongs among gift card users vs. other shoppers to determine particular shopping styles, store penetration, freneticism, overbuying, and more.

Retail guilt trip

If you’ve gone to Safeway recently, or Brooks Brothers, or CVS, or any number of other retailers, you’ve been hit up for donations at the cash register. In an article on this retail arm-twisting, The Wall Street Journal’s Eric Felten wisely observes, if he does not donate, “there's the reflexive twinge of shame. Are these the emotions businesses want to produce in their customers?” According to Felten, he talked to a number of retailers and was “assured time and again that customers like being solicited for donations and that no one ever complains about being asked to give.”

Really?

Isn’t there a chance that making customers uncomfortable could send customers running to shop online instead? Retailers are taking a pretty big gamble by not rigorously studying the effects of their charitable efforts on shoppers at the moment of truth.

There’s no doubt these efforts successfully raise funds, and hence provide a tangible benefit. They’re certainly well intentioned. Still, isn’t it a little creepy and invasive? Stores are essentially saying we just saved you some money (maybe as a way of getting you in here to shop in the first place), and now we’re going to ask you to give (and give it) back. Also, as customer, am I going to be a little suspicious of the money actually getting to the right place? Do I know if the retailer is going to deduct some kind of administrative fee for handling the transaction? Or perhaps pocket a healthy tax deduction for their customers’ contributions?

If stores want to encourage customers to give back, why not offer customers the opportunity to contribute without the hard sell? What would happen if a store said we saved you some money today—here’s an envelope (or a number to text), and we’d like to encourage you to send it to St. Jude’s Hospital—or wherever?

Spend this holiday season with Hilbert’s Paradox of the Grand Hotel (and other tales of the precious customer)

19th century German mathematician David Hilbert described the concept of infinity this way: first, you must picture a hotel so vast, so overwhelming that it has an infinite number of guest rooms. This hotel is not only large, it is also full, with every guest room occupied. One evening, a sojourner enters the lobby, seeking a room in this hotel with absolutely no vacancy. Despite being sold out, the traveler gets a room, since the hotel is not limited by any finite number of accommodations. So the guest in room 1 is moved to room 2, the guest in room 2 is moved to room 3, and so forth, ad infinitum. The newcomer is put into room 1. The hotel can repeat this procedure any number of times whenever new clients happen to show up.

Would that this were so for retailers—a steady line of customers snaking out the door, waiting to come in, every section packed, every aisle occupied, a hub of activity 24/7/365, one shopper after another after another with no end in sight.

While this isn’t real, we’ve often observed sales associates who believe that customers are an endless resource. Like it’s no big deal if they don’t sell customer 1, because a customer 2 will be right behind. There’s always one more and one more after that. Take this incident at Best Buy, in which an employee told a customer, without checking, that a hard drive was out of stock. When he ordered the same item online for in-store pickup, less than an hour later, it was miraculously available. Or this customer service fiasco at Men’s Wearhouse, in which a saleswoman insulted a customer with lines like “I don’t know why you’re here,” and “I can’t help you now.” Even in the best of times, it’s foolish not to treat every single customer as if they are critical to the success of the store—because they are. And to do otherwise in this economy, it’s deadly. If enough customers are lured away, whether it’s by lower prices or better service, stores that treat customers as expendable will find themselves on the road to oblivion.

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.