Leading Across Divisions: The Perils of Stovepipe Retailing
One of the reasons I like JCPenney is because their marketers and advertisers work in conjunction with the front-line retail store managers.
When JCPenney runs a promotion with specials and coupons, they mail them to residences, and those same coupons are available in the store. It makes good sense. As anyone in advertising knows, the purpose of direct mail marketing is to position yourself as a place where people want to go to do business.
When buyers (or potential customers) receive the JCPenney coupon, they get the idea that they want to shop there, and they show up at the store. They choose items to purchase, which is generally more than what they would have purchased if you had not been to the store at all, and the store uses the coupon to render the discount. The system works. People respond to incentives. The store makes profit.
This all seems very basic, even to a first year advertising student. The purpose of advertising is to generate buying behavior. All the store has to do is not fail on their end.
Sadly, stores fail.
I was at a retail store this week that enjoys nationwide recognition. I selected items for purchase. When I arrived at checkout, I realized I did not have my coupon. The store refused to honor my discount, even though they have the ability to process the coupon, whether I have it or not, and in their system I am listed as a preferred customer, and am clearly one of the coupon recipients. I certainly did not feel preferred.
The store manager explained to me that the reason they could not honor my coupon was because “Headquarters wants to track which advertising is working the best.”
With a smile on my face, I told her what tactics were not working, but the sarcasm was lost. Needless to say, I departed the store with zero items and a healthy resolve to never return. (If you’d like to know the name of the store please e-mail me and I will give you both the name and the address. It ends with Mart and it has nothing to do with animals or walls.) I thought this was a deplorable lack of communication between the company’s advertising and marketing arm, data collection ability, and the retail store.
Since when does data collection take precedence over sales? Isn’t the whole intent of advertising and marketing to generate sales? Do we really have retail organizations where the individual departments are so compartmentalized that they are not supporting the goals of the company? Apparently we have retail stores and service providers who have lost sight of why they are in business.
Let me help. If you are in business, your products fill a need for your customers. Your job as a manager and the leader is to make the process as easy as possible, as pleasant as possible, and provide a good quality product for the price. That’s it. It is that simple.
The breakdown generally is not the quality of the product, it is either deplorable customer service or a miserable buying process. In my case, the store was a shining example of exactly what not to do.
I recently attended a grand opening for a store. The planners did a terrific job with advertising the event, but on the day of the opening, they had very few cashiers although several people were walking around the store asking if they could help people. Why would a store manager pay employees to “help” potential customers on the floor, but then neglect to have sufficient cashiers? I observed the checkout line with 15 people in line. Many people just left their carts full of merchandise as they walked out of the store, clearly disgruntled.
Again, this is a case where the store manager poorly managed his employees at the expense of sales. The quality of the product was there, and had customers had the opportunity to interact with personnel at the cash register, it may have been pleasant. But the process was too long and cumbersome so customers never got that chance.
Two lessons here: 1. Makes sure that you look carefully at your processes to make sure they are consistent with your business vision and support your business plan. Coordinate among the divisions to make sure that one is not unintentionally sabotaging another. 2. Make sure that your people respond appropriately when you are not there, and that their response is what you want them to do. Your front-line customer service people should encourage business growth instead of alienating preferred customers.
Unfortunately too many businesses will tell you they don’t know why their customers are not coming back when they do this to their customers. There are two stores I will not return to because I was treated similarly. Management needs to be aware of what is going on in their stores to prevent this from happening to their customers. It costs a lot more to acquire a new customer that it does to keep a known customer, but too many businesses ignore this. Customers leave and often take others with them who sympathize.