It was sitting there, up on the counter. I knew it was mine. Then why couldn’t the waitress just go over, pick it up and bring it to me?!
My family and I had a decision to make, and the restaurant at our local health club wasn’t making it any easier. Just that day, my wife and I had spoken about whether or not to join a country club. These days, with the economy tight, memberships are much easier to come by, and the entry fees either heavily discounted or waived entirely, at many clubs.
We were seeking a place where customers come frequently and create more of a homey feel than most traditional restaurants. But all the clubs were between 20-45 minutes away from our house. Perhaps our local health club could become that “home away from home” community place. We already went to the health club 2-3 times a week for athletics; perhaps we could just add on food as well.
So there we were. Sitting in the restaurant at the health club, waiting for our food for more than 30 minutes. What was taking them so long? Why was our waitress never around when we looked for her?
Eventually, our food came, and then the bill, more than $100 for a family of three. Now, that is pricey to our family, certainly not an every day or every week dinner bill. When combined with the poor service — completely unacceptable. At the end of the meal, I spoke with the restaurant manager, and the issue became more clear, and relevant to all companies involved in retail or with customer service.
The restaurant was just plain understaffed. Too few people and too much to do = poor service. When combined with a premium price, the customer experience just fell off the map. As the manager explained to me, the company was trying to adjust the labor model to meet the business environment, and did not allocate enough staff to meet the demand on a Friday night.
It got me thinking about the challenges of balancing labor with revenue to yield a profitable business in 2010. Many companies are trimming costs to the bare minimum to reflect reduced demand. Yet, at the same time, that reduced labor force becomes (1) unable to flex to meet demand when it comes, particularly demand of Best and High Potential Customers, (2) burned out and dispirited after repeatedly facing irate customers who deserve better. One store I know staffs with just one person for much of the day! Guess what happens when two customers come in at the same time? Unhappy customers, that’s what!
On the other side is the Apple store, which seems to have 8-10 employees, mostly raving fans, roaming around the store ready to help you with any needs you might have, whether they result in immediate Apple revenue or not. They don’t seem to be driven by the labor model, and partially as a result, have one of the most widely acclaimed customer experiences in retail.
How do you balance labor costs with customer experience to produce a profitable and growing business?
Here are three No Excuses Marketing ideas to address the labor/customer experience issue:
1. Try to “be someone to someone, not everyone.” Heck of a phrase, isn’t it? What it means is that you may not be able to afford to provide premium service to all your customers, but at least try to offer it to your Best and High Potential Customers. Test an email program to get Best and High Potential Customers to book premium shopping experiences in 2-3 locations in a pilot program and see what happens.
2. Test a labor heavy-up. Maybe the labor problem can be solved in a more broad-brush way. Staff another 2-3 stores with double or triple labor and see what the resultant change in profitability is. Make sure to let customers know that you are doing this. You would be surprised to see how far customers will go for premium service, which is so hard to find these days. At $13/hour, it does not take many new sales to pay out the labor costs.
3. Staff up the call center, even if you cannot staff up retail locations. Then push customers to call the center rather than come into the store. Train several reps in the call center in broader, more consultative sales, and let them work to see what revenue and retention they can drive.
Now you might think that these ideas are not in the purview of Marketing, since they involve operations, sales and customer service. But this is EXACTLY what Marketing needs to do — champion the customer across the organization and work cross-departmentally to bring new customer experience tests to life. These sorts of initiatives are what we were hired to do, and they are why many of us entered Marketing in the first place.
I don’t know if we will decide to join a club or just stay with our health club. But it is rare that a customer actually asks to become a Best Customer. We will have to see if after we ask, they answer. Otherwise, we will have to find sushi in other, more fully-staffed venues.
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Mark,
The context of this post is so relevant in the days when companies are trying to cut down their costs dramatically. I particularly liked your comment on ‘Staff up the call center’. I had a personal experience with a telecommunications company where I got 100% response from the call center every time I called. This lead me to refer the company to alteast 10 other people!! However, as the size of the company grew, they failed to staff more people leading to extremely disappointed group of customers and an almost bankrupt company! Had they maintained a database of best customers and had they paid enough attention to keep these customers happy, things would have surely been VERY different.
Overall, I thoroghly enjoyed reading this blog post and sure did learn a TON from it!!
Best,
Poornima