How to manage a retail network

Product quality and customer service are the most important aspects to create a deeper and more intimate experience. These aspects are not only the most important, but they are also the most difficult ones to manage and improve. A couple of real-life examples will help us to discover which are the secrets to make quality and service, good and consistent, managing a retail network.

 

You have probably heard the story of Howard Schultz. He has been probably the most iconic CEO of Starbucks. In February 2008, just one month after returning to the company, he decided to close about 7000 stores for more than 3 hours. Do you know why he did that?

In the previous five years, from 2004 to 2008, Starbucks managed to open more than 8000 new stores all over the world. The board was concerned that such a rapid growth had harmed and watered the brand identity and that the company wasn’t able to deliver consistent quality across its locations.

So why did Mr Schultz decide to close so many of these stores for 3 hours and a half? Simple, during that period of time he made sure the baristas could be trained to make the perfect espresso. On that day Starbucks lost 6 million dollars.

In my opinion that was one of the best moves that he could have possibly done. Let me tell you why. When you create and distribute your brand globally the largest investments usually go to the aesthetic aspects of the brand itself. store design, logo consistency etcetera…all these aspects are important to generate a very important first impression.

However, what creates a deeper and more intimate experience are the intangible elements, such as product quality and customer service. If you go to a Starbucks coffee, you are treated well and the coffee is good you’ll identify that experience with the brand itself. It goes without saying that one single employee could have a positive or negative impact on your experience with the whole chain, even if you go to one shop only.

These intangible aspects are the most important ones to ensure that brand image and the core values behind it are consistent across the retail network. Unfortunately…these aspects are not only the most important, but they are also the most difficult ones to manage and improve.

So, what is the secret to making quality and service good and consistent? Continuous improvement. That’s it. If you want to make sure that a retail network delivers standard quality and values, you have to create opportunities to collect feedback from customers and constantly monitor them for improvement.

If you are not consistent in understanding what customers want and how they value your retail network, how can you expect to deliver a consistent service to them?

Today many brands ask customers for feedback after an interaction…I am sure it happened to you too, for example when you rent a car, when you visit a hotel or when you go to a restaurant. A couple of days after the interaction companies usually send those emails requesting to fill in a survey and give them a score.

I don’t want to talk about how useless are surveys in today’s world, so let’s pretend they are a good source of insights. My question is, how many learnings does the management make with the feedback that are collected? Does the management receive any actionable input from consumer feedback?

Based on my experience …the answer is “no, they don’t learn much. And consequently, they don’t do almost anything to improve the business”

Let me tell you a couple of stories that happened to me with car-rental companies (which I think is a great example of retail networks). By the way, I rent cars for business reasons quite often…so I have plenty of these stories if you like. Just let me know and I’ll make another video about them.

I rent a car with Sixt in Venice and the operator on the phone told me there were no issues at all to pick up the car a few minutes after midnight. I arrive at their desk and the employee asks me to pay 40€ to pick up the car after midnight. Quite disappointing, right?

Still with Sixt…once, when returning a car to their office in Milan, my wife forgot her phone on the seat. We came back a few minutes after and the phone wasn’t there anymore. Nobody knows who took it, but that’s not the problem. I have emailed Sixt customer service explaining the situation and asking for quick help. It took 4 days for them to reply. Quite disappointing, right?

The issue with these stories is not just in the bad experiences …but lies in the fact that most probably nobody in the headquarter knows about them. It would be so simple to collect customer feedback and periodically review what’s happening…don’t you think?

So, what if you are a manager of a company that operates in many different locations and you want to offer consistent quality and service? This is what you have to do:

1- number ONE setup a good way to let customers tell you what they think about their experience with your brand in specific locations.

2- Number TWO, qualify the feedback matching qualitative info with numbers to make sure you identify frequent issues first.

3- Number THREE, apply corrective action. You got to do it fast. Number FOUR, design a process to continuously monitor and improve you service

 

Now, read about how e-commerce is influencing traditional retail