Unleash the Power of Customer Relationships

March 24, 2013

 

Building a sustainable Customer Culture takes courage, commitment and hard work. It is solely through Customer Culture that we establish and sustain the inspirational humanistic environment that builds mutually beneficial customer relationships. The unfortunate alternative to building a rich Customer Culture is the current luxury and retail business model where nameless sales people sell luxury products and services to anonymous customers, all in the course of a one-time soulless transaction.”

The preceding quote is from the latest “DFS Learning e-Blast” article, Unleash the Power of Customer Relationships, a white paper created by The Luxury Institute.

In this January 2012 white paper by The Luxury Institute, you will read about the seven critical steps the Luxury Institute espouses for luxury brands to build Customer Cultures that will dramatically increase customer and associate acquisition, retention and referral rates.

As all of us at DFS continue to evolve our approach to developing, delivering and measuring a true luxury customer-centric culture, this article serves as a wonderful reminder of the reason for our quest and challenges us to critically assess our strategies.

More from the article:

Do it for your brand, do it for your associates, do it for your customers, do it for society, but most of all, do it for yourself. Building a true Customer Culture in your organization will dramatically enhance your own life experience. It will transform you from being just another business executive into a happy and thriving human being who enjoys a meaningful life with a far greater purpose than the pursuit of money. Ironically, the sales and profits will follow.

 

Read the short article to learn more!

 

Mike Osorio, your Dare to be Contagious™ strategist

www.OsorioGroup.com

What do you think?  Please add your comments to join the discussion!

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Service Lessons for Retailers from the Airlines

October 2, 2011

DISCUSSION TOPIC

Three Lessons Retailers Can Learn About Service From the Airlines – 09-16-2011

September 16, 2011

As a frequent flier with over 1.5 million Aadvantage miles (how about that!), it struck me on the way home from Shop.org that the retailing industry should use the airline industry as a cautionary tale. It’s a business that could do SO much better, but doesn’t, and has devolved into a commodity industry whereby the definition of success is safely transporting passengers from one place to another. And, God bless them for that! U.S. airlines, at least, have a stellar track record on safety.

But airlines have optimized the logistics end of the business to the point where it’s all about cramming as many passengers as possible onto as many flights as possible, moving them from point to point efficiently, and calling it a day.

Three Retail Lessons

1. Don’t promise what you can’t deliver. Simple enough, right? The old adage of under-promise and over-deliver applies, and yet the airlines do it in reverse 99 percent of the time. Returning from Shop.org, I traveled on a jetBlue flight that was delayed 90 minutes due to weather plus a slight (if there is such a thing) mechanical problem. Here’s the rub: jetBlue announced a 40-minute delay and delivered a 90-minute delay. Traveling for 30 years, as I have, this is almost always the case. Any ultimate delay will actually be worse than originally announced. Retail Lesson: When there is a problem, give your customers a realistic assessment of the issue right away, and then try to do better than that.

2. Don’t try to go from full-serve to self-serve. Since I hadn’t flown on jetBlue in 5+ years, I noticed the difference, so I’ll pick on them. When jetBlue first started flying, they had free snacks and free TV. While they still offer those two things (sort of), they have downgraded to an a la carte menu where you have to pay for movie channels on the “free” TV, pay for a headset, pay for “premium” snacks, pay for a pillow/blanket “kit,” pay for a few extra inches of leg room, etc. In short, they are now a regular airline and the TVs are in need of updating, too. Retail Lesson: When your business is founded on offering “free” extras, don’t start nickel and diming customers. If you are a full service retailer, be careful when you start trying to get your customers to check themselves out, use kiosks to find merchandise, help themselves at the meat case, etc.

3. You didn’t have me at hello! Does anybody but me remember the “good old days” of flying when flight attendants and gate and reservations counter attendants actually greeted you and maybe even spoke a complete sentence or asked how your day was going? It’s been well over a decade since I got more than a “good morning” from an airline employee. (Side note: I have had better luck on the phone and almost all airline employees have been civil if not friendly when asked a question). Retail lesson: Just think of the extra business you could garner if your associates were actually friendly and engaged each potential customer.

For retailers, commoditization could mean the industry degrades to the point where a handful of retailers successfully delivers products to consumers more or less on time, with an optimized supply chain, but with minimal to no service and differentiation. And, we don’t want retail to be like the airline industry, do we?

Discussion questions:  What’s the best way for chain retailers to motivate their employees to offer superior service? What’s your air travel tale of woe, and what can retailers learn from it?

My post:

The number of posts clearly indicates that the airline situation strikes a nerve with almost everyone.  For most routes, the choices are few and the airlines know it.  So in a financial model driven by high fuel and labor costs and meager profits dependent on pure price and supply chain efficiencies, it is no wonder that expecting anything other than arriving safely in your destination is futile.

On the retail side, the sobering reality is that a model built purely on supply chain and pricing efficiencies will deliver an awful experience over time.  And unlike the airlines, there are usually other options and the customer will go elsewhere.

It has always been this simple:  Retail interesting and innovative products in a compelling environment (virtual or physical), staffed by caring, knowledgeable people who love what they do.  Hire for these talents (merchants, store leaders and staff alike), pay well, invest in development, and authentically engage them in the business.  Unfortunately too many retailers over-complicate the formula and chase each other down the uninspiring product and price-driven path to boredom and irrelevance.

Mike Osorio, your Dare to be Contagious! ™ strategist

www.OsorioGroup.com

What do you think?  Please add your comments and add to the discussion!

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Go to the full discussion at Retailwire.com:  Three Lessons

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Will Back-to-School be the start of better days for retailers?

June 28, 2009

DISCUSSION TOPIC

Retailers Get Ready for Back-to-School 6/10/09

TOPIC SUMMARY:

Classes have yet to let out for the summer but quite a few people in and around retailing are already looking toward the back-to-school season as the next test of just how well the business is coming along.

“I’m not arguing that business is going to be positive,” Jeff Van Sinderen, a retail analyst with B. Riley, told Reuters. “I’m arguing the declines will start to moderate, that’s what we’d like to see happen. If business is up, I’d be surprised.”

“The question to me is the amount of the decline, and probably low single digits would be our guess,” said Sandra Reese, principal at Grant Thornton Corporate Advisory and Restructuring Services, who also spoke with Reuters.

An emphasis on trimming inventory has some hopeful that while retailers may see a slight dip in year-over-year sales, they might be able to squeeze more profits from dollars spent. Recent reports have suggested that merchants are engaging in much less discounting than they had toward the end of last year and the beginning of ’09. 

Discussion questions:  What are you looking for in the upcoming back-to-school season? Do you think there will be any surprises? Will we see retailers doing things a bit differently to find the right emphasis on top and bottom line growth?

My post: 

I do think we’ll see signs of life this back-to-school season.  The students themselves will drive some of it, because their spending power has not taken a hit from stock or housing losses.  The best of the retailers out there will continue to innovate and offer cool must-have apparel. My concern is that with so many retailers still unable to get solid financing, most will play it safe, get too basic and alienate the core customer.  The winners are likely to be the H&Ms of the world, who have shown the ability to continuously source and deliver great looks at terrific prices.  I predict a reasonably decent BTS, leading into a reasonably decent fall and holiday.  But only because last year was so dismal.  The weaker players will file Chapter 11 in growing numbers and the strong will significantly grow market share.  Watch for newer niche players with no debt and interesting products/concepts to rise up. 

Mike Osorio, your Dare to be Contagious! ™ strategist

www.OsorioGroup.com

What do you think?  Please add your comments and add to the discussion!

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Go to the full discussion at RetailWire.com:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/13798

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The Psychology of Consumer Sentiment

June 28, 2008

DISCUSSION TOPIC:  P&G CEO Advises Candidates to Stay Positive

TOPIC SUMMARY:

Procter & Gamble’s chairman and chief executive A.G. Lafley wants the future President of the United States, whomever that may turn out to be, to remember that there is a psychological component to economic performance and that it’s important now that Senators John McCain and Barack Obama are running for the nation’s top office that they remember to stay positive about the underlying strength of the American economy.

“You know we are in a business where psychology matters – even in the staples business – and in the economy psychology matters,” Mr. Lafley told the Financial Times. “It could go negative on the economy, that could be a problem … We will talk ourselves into a worse recession.”

Discussion questions:  How critical is the psychological component to consumer spending? Is a strong retailing environment a by-product of consumer optimism and, conversely, are periods of weak sales created by shopper pessimism?

My post:  This is such an important topic.  The crisis of faith in the American economy today is a combination of real issues, perceived issues, and the basic mistrust of our current president and his government’s ability to tell the truth and/or do anything meaningful to make a positive difference.

The new president (I believe it will be Obama) will have an incredible opportunity to demonstrate trustworthiness and speak with clarity and power of his vision of an improved American economy and place in the world.  I am quite optimistic that after 8 years of a disaster presidency, that our new president (again, likely Obama) will lead us to both perceived and actual improvements in our economy and our faith in our individual and collective futures and the place America will have in the world economy.

It is perfectly OK for Lafley to publicly ask our next president to work the psychology of consumer sentiment and build a vision for a better future.  Kennedy did it, Reagan did it – watch Obama do it next!

Mike Osorio, your Dare to be Contagious! TM strategist

www.OsorioGroup.com

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Go to the full discussion at RetailWire.com:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/13058    

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Xanadu: the latest mega-development

April 24, 2008

DISCUSSION TOPIC:  Critics: Xanadu Stinking Up Jersey Swamp

TOPIC SUMMARY:

It’s impossible to imagine that Kubla Khan’s vision of Xanadu bore any resemblance to the monumental (some would say monstrous) mall project of the same name that is growing on the edge of the Meadowlands swamp in northern New Jersey.

The project, which has been beset with financial challenges, environmental challenges and critics who know ugly when they see it, continues to move forward largely as the result of one man’s unwavering commitment to the 2.4-million-square-foot entertainment and shopping complex.

That man, Laurence Siegel, is the driving force behind Xanadu, a $2.3 billion project that when complete will include features such as the first indoor ski slope in the U.S., a wind tunnel for sky diving lessons, a wave machine for indoor surfing, and a 287-foot-high Ferris wheel (Pepsi logo positioned prominently in the middle) that will offer riders close-up looks at the Manhattan skyline. Xanadu will also include a movie multiplex with an Egyptian theme (locals scratching their heads over that), dining options galore and acre-upon-acre of upscale shopping destinations.

As a New York Times article pointed out, many who have seen the plans and renderings of the project have reacted adversely. Richard J. Codey, president of the New Jersey State Senate, described it as “yucky-looking.” Others, RetailWire has been told by local sources, refer to the project now as “Xanadudu.”
No matter the naysayers, Mr. Siegel is convinced that Xanadu’s success will dwarf its massive size. “Look at the majestic nature of this space. You’re going to come here just for the ‘omigod’ factor,” he told The Times.

Discussion questions:  What do you think of the Meadowlands Xanadu strategy to create a huge retail and entertainment complex? Are these types of developments in line with where the consuming public is headed?

My post:

Despite the design concerns, the combination of cool & unique entertainment with great stores should create a success for Xanadu.  This project reminds me of, and is dwarfed by, the mega hotel/shopping/entertainment projects in Dubai.  With the economy likely to be tough for quite some time and making vacations less affordable, residents in the NY area will be glad for a unique “almost vacation” getaway, similar to Mall of America.  I believe we will see more of these projects over the years and they will certainly put pressure on existing malls to reinvigorate their offerings to compete for share of ever-shrinking time and wallet.

Mike Osorio, your Dare to be Contagious! TM strategist

www.OsorioGroup.com

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Go to the full discussion at RetailWire.com:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12914    

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Kids learning to be thrifty?

April 22, 2008

DISCUSSION TOPIC:  Kids Without Cash

TOPIC SUMMARY:

In the past it has seemed as though teens had an inexhaustible supply of cash. Whether it was from part-time jobs, money from the Bank of Mom and Dad, birthday, graduation, gifts, etc. – kids were out and spending.

Now, it seems, even indefatigable teens and their wannabes (tweens) are cutting back due to a lack of funds. The costs of products that kids buy are going up with everything from gas to a slice of pizza to jeans at prices this generation has never seen before.

According to a piece by USA Today, teen hiring has been down five percent since March of last year. The same report noted that some economists believe this could be the worst year for teen spending since the early 1990s.

Same-store sales at retailers targeting teens were down 0.5 percent last year compared to increases of 3.3 percent in 2006 and 12.1 percent in 2005, according to figures from the International Council of Shopping Centers and UBS.

Discussion questions:  How acutely affected are teens and tweens by the current state of the economy? How important are teen and tween dollars to retailers? How should retailers be adapting to current conditions to maintain the link they have with these consumers?

My post:

How parents communicate to their kids impacts those kids’ reaction to all societal topics:  drugs, sex, violence, and certainly the economy and responsible financial decision-making.  The current economic situation provides parents with a terrific opportunity to teach valuable life lessons regarding thrift, savings, value, and prioritization. 

Certainly the simple fact that parents have cut back allowances and other funding methods has led to less teen spending.  The lower the family is on the economic ladder, the more acutely this is felt.  Those lost dollars are of great import across many parts of the retail landscape including convenience and grocery stores, quick-serve restaurants and of course, teen and tween apparel and accessory stores.  Retailers must focus on their own value proposition, be it price, quality, service, social networking, etc., and should not start focusing on price if that hasn’t been their calling-card.  Stick to your niche – this economic valley too shall pass.

Mike Osorio, your Dare to be Contagious! TM strategist

www.OsorioGroup.com

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Go to the full discussion at RetailWire.com:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12908    

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Should retailers raise prices?

April 21, 2008

DISCUSSION TOPIC:  Inflation Rears Its Ugly Head

TOPIC SUMMARY:

Another retro trend from the seventies is working its way back to retail. Unfortunately, it’s inflation.

Retail prices are expected to rise in many categories – e.g., apparel, footwear, toys and electronics – that have largely enjoyed a deflationary cycle over the last two decades. For retailers, many will be challenged to raise prices without irritating customers who have grown used to bargains.

The reason for the price gains are mainly due to higher manufacturing costs coming from China. Among the factors driving up the gains: rising wages in China, the devaluation of the dollar against the (RMB), escalating raw material costs such as steel, and rising fuel costs that are increasing freight costs and the cost of plastic. And many of these drivers – particular the weakening dollar against the yuan – are expected to get worse before getting any better. According to an article on Slate.com, some Chinese factories are now asking their American customers for price increases of as much as 20 percent to 30 percent.

That leaves American retailers to devise new pricing strategies to avoid overwhelming consumers hooked on $3 T-shirts and $30 DVD players. A manager of several discount stores confided to Slate.com that his company has started raising prices of certain goods while putting others on sale. Others are considering bringing in lesser quality goods to meet price points expected by consumers, or being more aggressive around opportunistic buys.

Longer term, suppliers will be challenged to find a manufacturing hub as cheap as China. Other countries seen as possible replacements, such as Vietnam and India, don’t have infrastructure to handle the volume production that the world depends on for cheap goods. Other countries expected to gain a stronger look include Indonesia, Mexico, Malaysia, as well as Brazil or Kenya.

Discussion questions:  How can a retailer maintain its value proposition to consumers in industries facing inflationary pressures? Should they be raising prices sooner rather than later?

My post:

I predict the silver lining in the current situation will be the failure of several so-called retailers which are really private equity owned financial instruments (some of which has already started).  When a retailer’s strategies are based on the basis of short-term financial results needed by short-term financial owners, a sustained downturn will frequently crush that retailer.  The ability of a retailer to raise prices appropriately based on real market conditions depends on the level of trust built with their customers over time.  Trust comes from strategies based on the customer and the brand vision.  Retailers who have built trust can phase in price increases because their customers will trust that this is appropriate given the market realities.  

Prices must be raised now vs. later to ensure the continued financial health of the enterprise.  Those retailers with strong trust-based relationships with their customers will continue to thrive, and those that don’t, won’t.

Mike Osorio, your Dare to be Contagious! TM strategist

www.OsorioGroup.com

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Go to the full discussion at RetailWire.com:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12906    

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Thank you for visiting my blog!  Please subscribe using the RSS button and comment on my postings.  Comments are the life-blood of any blog and I appreciate yours!