2. Distribution Channels MKTG 1058
LECTURE TEN
Customer Service and
Retail Selling
(Dunne Chapter Twelve)
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3. Learning Objectives for Chapter 12 (Dunne)
• Explain why customer service is so important
in retailing.
• Describe the various customer services that a
retailer can offer.
• Explain how a retailer should determine which
services to offer.
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4. Learning Objectives for Chapter 12
• Describe the various management problems
involved in retail selling, salesperson
selection, training and evaluation.
• Describe the retail selling process.
• Understand the importance of a customer
service audit.
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5. Customer Service Today…
The old rules about customer loyalty are obsolete.
Today's customers define loyalty on their terms; not
the retailer's.
The average firm loses half of their customers every
five years.
High-quality service is defined as delivering service
that meets or exceeds customers' expectations. In this
definition there is no absolute level of quality service,
but only service that is perceived as high quality
because it meets and exceeds the expectations of
customers
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6. A Shopper’s Wish
Exhibit 12.1
Please…
Let me find a parking place near the store
Do not let me pay too much
Have the sales staff pretend that they care
Do not make me have to return anything
Get me in and out as fast as possible
Do note make me have to wait in line to make my purchase
Let this experience be somewhat enjoyable
Do not make me have to deal with other obnoxious shoppers
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8. Customer Service
Nordstrom, by providing
high-quality customer
service, has become a
leader in relationship
retailing and has many
loyal long-term
customers.
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10. Customer Service
Relationship retailing:
Comprises all the activities designed to attract,
retain, and enhance long-term relationships
with customers.
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12. Retailers are now engaging in relationship
retailing programs…
These are designed to attract, retain, and enhance
long-term relationships with the customers.
High performance retailers can develop these
relationships with their customers by offering two
benefits:
a. financial benefits that increase the customer's
satisfaction, such as the frequent purchaser discounts
or product upgrades already offered by some
supermarkets, airlines, and hotels and
b. social benefits that increase the retailer's social
experience with the customer
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13. Retailers can improve their competitive standing:
the ease with which a potential customer can
shop or learn about the store's offering
the ease with which a transaction can be
completed once the customer attempts to
make a purchase
the customer's satisfaction with the
transaction
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14. Customer Service
Customer service:
Consists of all those activities performed by the
retailer that influence (1) the ease with which a
potential customer can shop or learn about the store’s
offering, (2) the ease with which a transaction can be
completed once the customer attempts to make a
purchase, and (3) the customer’s sati8sfaction with the
transaction.
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15. Customer Service
Transient customer:
Is an individual who is dissatisfied with the level of
customer service offered at a store or stores and is
seeking an alternative store with the level of customer
service that he or she thinks is appropriate.
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17. Customer Service
• Merchandise Management: Keep in stock the
merchandise a customer wants.
• Building and Fixture Management: Heating and
cooling; availability of parking spaces; ease of
finding merchandise; layout and arrangement
of fixtures; placement of restrooms and lounge
areas; location of check-cashing, complaint,
and returns desks; lighting; and width and
length of aisles.
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18. Customer Service
• Promotion Management: Provides customers
with information that can help make purchase
decisions.
• Price Management: Clearly marked and visible;
fair, honest, and straightforward; and true
price of credit.
• Credit Management: Both in-house and bank
card, should also be integrated into the
customer service program.
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19. Customer Service
Questions to assess whether a retailer’s promotion is serving the
customer:
• Is the advertising informative and helpful?
• Does the advertising provide all the information the consumer
needs?
• Are the salespeople helpful and informative?
• Are the salespeople friendly and courteous?
• Are the salespeople easy to find when needed?
• Are sufficient quantities available on sales promotion items?
• Do salespeople know about the ad and what’s being promoted
and why?
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21. Common Customer Services
Pretransaction Services are services
provided to the customer prior to
entering the store.
Convenient Hours - The more convenient the operating
hours of a store are to the customer, the easier it is for
the customer to visit the store. A store's hours of
operation depend on customers' demand, profitability,
competitor's hours of operation, and legislation.
Information Aids - Retailers may offer counseling
lessons or booklets, to customers, on how to use,
operate or care for a product; items such as these help
customers to enter into intelligent transactions
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22. Common Customer Services
Transaction Services are services provided to
customers when they are in the store shopping and
transacting business.
• Credit •Personal Shopping
•Merchandise
• Layaway Availability
• Gift Wrapping and Packaging •Personal Selling
• Check Cashing •Sales Transaction
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23. Post-transaction Services
• Post-transaction Services are services provided to
customers after they have purchased merchandise or
services.
• Complaint Handling
• Merchandise Returns
• Servicing and Repair
• Delivery
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24. Retailing Truism
• A retailer’s job isn’t over when the cash register’s bell
rings.
Discuss the implications of this statement.
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25. Six Rules to Follow When
Handling a Customer’s Complaint
Exhibit 12.4
Acknowledge the importance of the customer. Before the
customer even begins to explain his or her problem, acknowledge
that the customer is important by telling him or her that you are
there to help. Try to ease the customer’s frustration.
Understand the customer’s problem. Ask all the questions
needed to completely understand the situation. Determine the
responsibilities of each party and what went wrong. Do not
assign any fault at this stage.
Repeat the problem (as you understand it) to the customer.
Without interrupting the customer, paraphrase the problem as
you understand it.
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26. Six Rules to Follow When
Handling a Customer’s Complaint
Exhibit 12.4
Think of all possible solutions. Using your creative powers, think
of all possible, even wild, solutions that could remedy the
problem.
Agree on the solution. Determine the solution that is fair to both
parties and then have both parties agree to it.
Above all, make sure the customer leaves feeling as you would
want to feel if you were the customer. If you would not be
satisfied with the solution if you were the customer, start over.
Remember, it is better to lose a little now than to take a chance on
losing a customer for life.
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27. Factors to Consider When Determining Customer Services to Offer
Factors to Consider When Determining Customer Services to Offer
Exhibit 12.5
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28. Determining Customer Service Levels
• Retailer’s Characteristics include store location, store size, and
store type.
• Competition: Services offered by competitors will have a
significant effect on the level and variety of customer services
offered.
• Type of Merchandise can be an indication of the types of
services.
• Price Image: Expectation of more services from a high-price
image than a discounter.
• Target Market Income: Higher income of target market, higher the
price.
• Cost of Services: Know the cost to estimate additional sales to
pay for the service.
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29. How the Retailer’s Sales Force Meets
How the Retailer’s Sales Force Meets
the Expectations of Both Vendors and Customers
the Expectations of Both Vendors and Customers
Exhibit 12.6
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30. Question to Ponder
• How can e-tailers differentiate themselves from other
e-tailers, brick & click retailers, and brick & mortar
retailers based on service assortment?
Think of how this is possible when there
is no face-to-face service encounters.
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31. Retail Sales Management
•Types of Retail Selling
•Salesperson Selection
•Salesperson Training
•Evaluation of Salespeople
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32. Types of retail selling:
Types of Retail Selling
1. Order takers - Retail employees who do not
actively sell but rather assist in completing a
transaction after the customer decides what to
purchase
2. Order getters - Retail employees who are involved
in conversing with prospective purchasers for the
purpose of making a sale; they inform, guide and
persuade the customer. Retailers with high margins
and high levels of customer service should emphasize
this.
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33. Retail Sales Management
Types of Retail Selling it is generally true that:
• Retailers with high margins and high levels of
customer service place more emphasis on order
getting.
• Those with low margins and a low customer service
policy tend to emphasize order taking.
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34. Retail Sales Management
Salesperson Selection:
• What Criteria To Use?
• Predictors
• Demographics
• Personality
• Knowledge and intelligence
• Experience
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35. Retail Sales Management
Salesperson Training: the most important skill
the retailer can teach is common customer
courtesy.
• Retailer’s Policies
• Merchandise: retailer may suggest becoming
familiar with the competitor’s offerings and
their strengths and weaknesses.
• Customer types
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36. Training:
Retailer's Policies - Salespeople should be
knowledgeable about policies relating to the
establishment's operation, as well as those that affect
their employment status.
Merchandise - Salespeople should be familiar with the
strengths and weaknesses of a retailer's and its
competitors' merchandise, warranty terms and the
reputation of manufacturers of the merchandise
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37. Retail Sales Management
Customer Choice Criteria
• No active product choice criteria
• Inadequate or vague choice criteria
• Choice criteria in conflict
• Explicit choice criteria
See Exhibit 12.7 on page 429
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40. Evaluation of Salespeople
Performance Standards
Conversion Rate is the percentage of
shoppers that enter the store that are
converted to purchasers.
Sales per hour
Use of time
Data Requirements
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41. The Retail Sales Process
A. Prospecting is the process of locating or
identifying potential customers that have the
ability and willingness to purchase your
product.
B. Approach
C. Sales Presentation
D. Closing the Sale is the action the
salesperson takes to bring a potential sale to
its natural conculsion.
E. Suggestion Selling
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47. Some Closing Signals the
Salesperson Should Be on the Lookout For
Exhibit 12.9
The customer reexamines the product carefully.
The customer tries on the product (i.e., trying on a
sport coat or strapping on a wristwatch.
The customer begins to read the warranty or brochure.
The customer makes the following statements:
I always wanted a compact disc player.
I never realized that these were so inexpensive.
I bet my wife would love this.
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48. Some Closing Signals the
Salesperson Should Be on the Lookout For
Exhibit 12.9
The customer asks the following questions:
Does this come in any other colors?
Do you accept Discover cards?
Can you deliver this tomorrow?
Do you have a size 7 in this style?
Do you accept trade-ins?
Do you have any training sessions available?
Do you have it in stock?
What accessories are available?
Where would I take it to get it serviced?
Is it really that easy to operate?
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49. Characteristics of a Top Retail Salesperson
1. BELIEVE IN YOURSELF: A retail salesperson must
have that self-confidence to keep going when
everything is going wrong. After all, your customers
will believe in you if you believe in yourself. If you
don’t believe in yourself, why should they believe in
you. There will be days when selling is easy, the
customers will want everything you are selling.
However, the key is handling those days when
everything is going wrong.
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50. Characteristics of a Top Retail Salesperson
2. BE WILLING TO WORK HARD: Retail selling is
really a job demanding hard work if you are going to be
good. Don’t waste time when customers aren’t in the
store. Learn about your merchandise, go over your
sales records, and call your “key” customers on the
phone to see if they need anything.
Remember the old saying, “The harder I work, the
luckier I get.”
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51. Characteristics of a Top Retail Salesperson
3. HAVE PERSEVERANCE: The person that has the
ability to persevere and take ups and downs of selling
in stride will find an increasing number of
opportunities. All too often salespeople may become
frustrated due to the many things occurring that they
can’t control.
A salesman used to call on my father’s store with merchandise
targeted too high for his target market. After a few years of
this, my father asked him how long he was going to continue
to call on him, since he consistently turned down his
merchandise line. “Well,” he said, “it depends on which one
us dies first . . .”
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52. Characteristics of a Top Retail Salesperson
4. HAVE RESPECT FOR THE CUSTOMER’S GOOD
SENSE: Don’t try to trick the customer. You might win
the battle by getting the sale, however, you will lose
not only the war but the customer as well. Find out
what the customer needs and get it for him.
An example would be where after exhausting all
sources of possible supply for the customer, the
solution cant be found; the retailer then points him
towards other retailers who could meet his
requirements. Imagine the positive good will
generated.
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53. Characteristics of a Top Retail Salesperson
5. BE FLEXIBLE: The ability to adjust to the ever-
changing needs of the situation calls for flexibility. The
salesperson must have the willingness and enthusiasm
to do whatever is necessary (although not planned to
make the sale. If one approach or sales presentation
doesn’t work, try a different one.
It is fine to live on high expectations. However, if the
realities of the situation tell you otherwise, be flexible
enough to try something different.
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54. Characteristics of a Top Retail Salesperson
6. BE DECISIVE: No two selling situations are the
same. The ability to make rapid decisions, and to
render judgments, and take action until the sale is
completed is decisiveness. Every salesperson could
probably make better decisions if more time were
available. However, more time is frequently
unavailable because of the types of customers a
salesperson must deal with.
Remember, a salesperson must be able make
decisions quickly, confidently, and correctly in order to
be successful even if perfect information is not always
available.
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55. Characteristics of a Top Retail Salesperson
7. BE ABLE TO HANDLE STRESS: The retail
salesperson must be able to perform consistently
under pressure and to thrive on constant change and
challenge.
The failure to handle stress is a major reason people
give up on retail selling as a career. They tend to focus
on the failures and not on the satisfaction to be gained
from helping a customer solve a problem.
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56. The Customer Service and Sales Enhancement
Audit
Customer Service and Sales Enhancement Audit
provides management with a detailed analysis of
current sales activity by location and by selling area.
Identify service, salesmanship, and sales
enhancement methods to produce more sales.
Target the methods by the store and selling area to
produce most significant improvements.
Determine added sales by improving service level,
salesmanship, and sales enhancement programs.
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57. The Customer Service and Sales Enhancement
Audit
Basic Service:
Sales Enhancement:
Customer contact •Impulse purchasing
Salesperson-initiated contact •Walkouts
Customer acknowledgement
Salesmanship:
Merchandise knowledge
Needs clarification
Active selling
Suggestion selling
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58. Past Year Examination Questions
Chapter Twelve: Customer
Service and Retail Selling
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