Office Depot's President on How "Mystery Shopping" Helped Spark a Turnaround

By Kevin Peters

The Idea:The office products retailer was measuring customer service using metrics— such as the cleanliness of bathrooms—that didn’t drive sales. Its new president is trying to fix that by retraining the staff and transforming the company.

When I became the leader of Office Depot’s retail stores in the United States, in 2010, the first thing I tried to do was figure out the meaning of a puzzling set of facts. Our sales had been declining, and although that’s not unusual in a weak economy, they had declined faster than the sales of our competitors and of retailers in general. At the same time, the customer service scores our third-party mystery-shopper service was reporting were going through the roof. This didn’t make any sense. How could it be that we were delivering phenomenal service to our customers, yet they weren’t buying anything?

To understand these contradictory data points, I decided to do some mystery shopping myself. I didn’t wear a suit. I didn’t wear a blue Office Depot shirt like the ones employees wear in all our U.S. stores. Instead I wore a faded pair of jeans, a T-shirt, and a baseball cap. I didn’t tell anyone I was coming to visit, and in most cases I didn’t let anyone know afterward that I’d been in the store. What I wanted was to experience Office Depot in the same way our customers do. Over the next several weeks I visited 70 stores in 15 or more states.

At each location I followed the same routine. First I pulled into the parking lot and just watched customers go in and out for a few minutes. When I went into the store, I’d spend 20 to 30 minutes observing what was going on. I’d talk to customers, in the aisles and as they were leaving the store. Some of the most interesting conversations took place when I followed people out who weren’t carrying shopping bags and asked them why they hadn’t bought anything. Some of them gave me an earful.

I could tell you a lot of stories about the things I saw, but two scenes stand out in my mind. In one store I watched an employee argue with a customer about whether or not we carried a calculator that her son needed for first grade. An employee arguing with a customer—it was unbelievable.

At another store, I parked and saw an associate leaning up against the brick facade smoking a cigarette. Meanwhile, customers were walking out without any bags. This employee did nothing—he just watched them leave empty-handed. At that point I had a tough decision to make: Should I blow my cover and alert the store manager, or should I stay silent? I sat in the car a few minutes, thinking it over. Finally I decided, I just can’t let this go.

I went into the store and looked at the stanchion that stands at the front of every location, displaying the name of the manager and his or her picture. Guess who the store manager was? Yes—the guy smoking outside the store. So I went up to him and introduced myself, and we had a good long talk. He was ashamed of his behavior—and he was sweating during the conversation. He promised he’d do a better job of taking care of customers, and I promised to keep in touch. Even today we exchange e‑mails every month to discuss his performance.

Get In, Get Out
During most of my visits, though, I managed to stay incognito, and I came away having learned a big lesson: Our mystery-shopping scores were correct. You know what was flawed? Our scoring system. We were asking the wrong questions. We were asking, Are the floors clean? Are the shelves full of inventory? Are the store windows clean? Have the bathrooms been cleaned recently? Think about that for a moment: How often do you go to the bathroom while shopping for office supplies? It turns out that customers don’t really care about any of that. Those factors don’t drive purchases, and that’s why our sales were declining. It would be easy to blame our associates for ignoring shoppers, but under the system we’d built, they weren’t doing anything wrong. They were doing exactly what we’d asked them to do—working to keep stores clean and well stocked instead of building relationships with customers.

My conversations with customers gave me three insights into how we should transform our business to become more competitive: One, we had to reduce the size of our stores. They were too large and too difficult to shop in. Two, we had to dramatically improve the in-store experience for our customers. That meant retraining our associates to stop focusing on the things our existing system had incentivized them to do and focus on customers instead. Three, we had to look beyond office products to provide other services our customers wanted. They wanted copying, printing, and shipping. They wanted help installing software and fixing computers. We needed to expand our offerings if we were to remain relevant to our customers.

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Rewarding Employees for Good Feedback

One of the biggest questions I get from clients is, “How do I get my staff to “buy-in” to new training, skills and motivators?”  The brief article below gives you some ideas to use.  You must emphasize the importance of any new program from top management down; if the staff senses that not all management supports or is serious about change, they won’t be either.  It doesn’t cost much to reward/recognize staff.  And the average employee cares about recognition most…so you don’t have to spend a lot, just make sure you recognize those who do well...loudly AND proudly.  That motivates staff more than anything else. 

I hope this snippet gets you thinking about ways and ideas for your situation.  I’d love to hear how you reward/recognize/motivate staff…we welcome your comments.

--Kathy Shook

Rewarding Employees for Good Feedback.

After beginning a training program for our people, I asked for feedback on how we could make the training more effective. At first the group responded with blank stares and benign comments like, “It was just great!” I wanted more, so I offered an incentive for them to give me their ideas. When I received one good idea, I presented the individual with a coffee shop gift card in front of his peers. The group took note, and they understood that I was serious about the training and making it the best it could be for all involved.

By - Stan McBroom, Security Plumbing, Arvada, CO

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HOLIDAY SHOPPING: A GREAT OPPORTUNITY FOR ALL BUSINESS

John Tschohl, author of Achieving Excellence Through Customer Service, urges store owners to keep their eyes on service throughout the holiday season.

“Regardless what your business is, you are always first and foremost in the service business,” says Tschohl. “Take your eyes off the customer experience and it could be the kiss of death. You have a store full of customers in your shop during the holidays, but why not really wow them and turn them into loyal customers who come in during the rest of the year?”

His tips:

Empowerment is critical this season. Not everything is going to go as planned. Employees must make empowered decisions in favor of the customer. Managers need to let their employees know that it's okay to make a decision in favor of the customer and there won't be any repercussions for doing so.

Companies spend so much money on advertising, but they don't take care of the customers who are standing right there in front of them. Make sure you are properly staffed; that your employees can answer questions and direct customers to specific areas of the store; are friendly, smile, and show a genuine attitude of concern and wanting to help.

Service is key to business, and it's how you're going to keep customers from going to the competition. Taking care of the little things will make all the difference. Offer plenty of free samples, free gift wrapping, free coffee and drinks, and make sure your employees are knowledgeable about the items in their departments.

Give your customers these five things during the holiday rush, and they'll becoming back the rest of the year: They are price, quality, service, empowerment and speed.

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You Can't Hide Bad Service

YOU CAN’T HIDE BAD SERVICE

by John Tschohl -October 10, 2011

Social Networks Share Customer Complaints With the World

Never before has timing been as critical to an organization’s success as it is today. While it certainly is critical to, for example, the introduction of a new product or the infusion of cash, it is equally critical when it comes to solving a customer’s problem.

Technology—specifically social networks—has driven the need for timely customer complaint solutions to a new high. Those networks have put businesses throughout the world under a technological microscope, as disgruntled customers share their experiences with thousands, if not millions of people, in a matter of seconds with a simple click of a button.

In the past, customers who had a problem with a company would tell, on average, 20 of their friends, coworkers, and family members about it. Social networks, however, allow anyone anywhere to share their customer service complaints quickly and with people in every corner of the globe.

The power and appeal of social networks is undeniable. Consider this: More than 800 million people are active users of Facebook, and each of them has an average of 130 friends. More than 350 million of those users access Facebook through mobile devices such as cell phones, which means they are in touch with their friends even while they’re on the go.

What do those numbers mean to you and your organization? It means that, if one of your customers has a problem, and you don’t solve that problem quickly, that customer can—and probably will—blast you to hundreds, if not thousands, of friends. And their comments and complaints often remain on social network sites for years.

Let me give you an example: When United Airlines broke a passenger’s guitar in 2009, that passenger put a posting about it on YouTube. It’s still there—and it has had almost 11 million hits. Another YouTube video, posted in 2006, involves a Comcast technician, who fell asleep on the customer’s couch while he was on hold for an hour with the company’s central office. That video has had almost 1.7 million hits.

Consumers of all ages are increasingly turning to social network sites before they make decisions on where to spend their money. My daughter Christina is 31 and lives in China. Before my wife Pat and I visit her, she logs onto various social network sites to check out hotels and restaurants for us. My friend, Vicki, is 62 and uses Google—which has 1 billion visitors each month—to be directed to sites, including Trip Advisor, that provide customer reviews on hotels before she finalizes

her travel plans. Other popular sites are www.my3cents.com, and www.screwedbyforums.com.

You can spend millions of dollars on advertising and marketing, but if you don’t solve your customers’ problems, you will suffer bad publicity that will cost you millions more in the loss of potential customers. No longer do you have the luxury of waiting a few days or a week to handle a customer’s complaint; you must do it within a matter of minutes. That means you must empower your frontline employees to do whatever it takes to satisfy your customers. If you don’t, your sales, along with your chances of survival, will plummet.

About John Tschohl:

John Tschohl, the internationally recognized service strategist, is founder and president of the Service Quality Institute in Minneapolis, Minnesota. Described by USA Today, Time, and Entrepreneur as a “customer service guru,” he has written several books on customer service and has developed more than 26 customer-service training programs that have been distributed throughout the world. John’s monthly strategic newsletter is available online.

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Seven Steps to Coaching Your Employees to Success

Greetings! Following is a great article about coaching employees. Remember, growth and improvement happens with consistent practice, training and reinforcement. I love the question: “What happens the other 364 days of the year?” as posed below. I hope you enjoy this article from Entrepreneur Magazine.
                                                                               -Kathy Shook, Shoppers, Inc.

Seven Steps to Coaching Your Employees to Success
Many employers sit their workers down once a year for a review. At that time, the employee finds out what they've been doing right or if there are areas in need of improvement. But what happens the other 364 days of the year?

Coaching is a different approach to developing employees' potential. With coaching, you provide your staff the opportunity to grow and achieve optimal performance through consistent feedback, counseling and mentoring. Rather than relying solely on a review schedule, you can support employees along the path to meeting their goals. Done in the right way, coaching is perceived as a road map for success and a benefit. Done incorrectly and employees may feel berated, unappreciated, even punished.

These seven steps, when followed, can help create a positive environment for providing feedback.

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Positive Tip: The Power of Thank You

HI:  The following article expresses my thoughts this week.  I am so grateful for our clients, our co-workers, our company and each of you reading this article.  Have a wonderful week and Thank You so much. 

Kathy Shook

The Power of Thank You

In the spirit of Thanksgiving I'd love to share with you the benefits and power of two simple words. THANK YOU.

They are two words that have the power to transform our health, happiness, athletic performance and success. Research shows that grateful people are happier and more likely to maintain good friendships. A state of gratitude, according to research by the Institute of HeartMath, also improves the heart's rhythmic functioning, which helps us to reduce stress, think more clearly under pressure and heal physically. It's actually physiologically impossible to be stressed and thankful at the same time. When you are grateful you flood your body and brain with emotions and endorphins that uplift and energize you rather than the stress hormones that drain you.

Gratitude and appreciation are also essential for a healthy work environment. In fact, the number one reason why people leave their jobs is because they don't feel appreciated. A simple thank you and a show of appreciation can make all the difference.

Gratitude is like muscle. The more we do with it the stronger it gets. In this spirit here are 4 ways to practice Thanksgiving every day of the year.

1. Take a Daily Thank You Walk - I wrote about this in The Energy Bus. Take a simple 10-minute walk each day and say out loud what you are thankful for. This will set you up for a positive day.

2. Meal Time Thank You's - On Thanksgiving, or just at dinner with your friends and family, go around the table and have each person, including the kids at the little table, say what they are thankful for.

3. Gratitude Visit - Martin Seligman, Ph.D., the father of positive psychology, suggests that we write a letter expressing our gratitude to someone. Then we visit this person and read them the letter. His research shows that people who do this are measurably happier and less depressed a month later.

4. Say Thank You at Work – When Doug Conant was the CEO of Campbell Soup he wrote approximately 30,000 thank you notes to his employees and energized the company in the process. Energize and engage your co-workers and team by letting them know you are grateful for them and their work. And don’t forget to say thank you to your clients and customers too.

I hope you have a wonderful Thanksgiving. I’m thankful for YOU.

by Jon Gordon

What are you thankful for? Share one or two things that you are thankful for in your life...

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The Myth

I thought everyone would enjoy this article, a reminder that growth and improvement happen over time. Especially in companies: we cannot give our employees one shot of training or motivation and expect that to last indefinitely. Everyone needs consistent training, encouragement and feedback for lasting growth! Enjoy and we appreciate your comments. Kathy

Posted by Jon Gordon

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(Excerpt from Training Camp by Jon Gordon)

There is no such thing as an overnight success. Too many believe in the fantasy that superstar athletes, actors, musicians, doctors, pianists, researchers, Olympians and others were born that way or simply stumbled on their success overnight. After all, the best of the best make what they do look so easy that people either think anyone can do or that a select few are chosen to do it.

This myth is perpetuated by the media. On television we see the successful person performing his/her craft. We see the concert, the movie, the computer program, the game, the play, the miracle surgery, the lecture, the Nobel Prize, the latest discovery or the Olympic event. We see the end result—the outcome. But what most of us don’t see are the countless hours of sweat, toil, dedication, practice and preparation that lead to greatness.

The tennis champion hit a million backhands before winning the US Open. The rock star sang for countless hours before reaching stardom. Technology designers spent thousands of hours to create new and revolutionary products that make our lives easier. The teacher spent a career preparing and practicing ways to better connect with and teach her students before winning a teacher of the year award. The symphony practiced thousands of hours to create music that brought the audience to tears. And the sales team spent a year preparing for the important meeting that landed their biggest client.

The ideal of the overnight success is a myth. Just as the Olympian must train for years for one defining race, you must wake up each day and practice, prepare and train to be your best. Don’t settle for mediocrity, but strive each day for excellence. It requires hard work, preparation and hours of effort, but it’s worth it.

Do you agree with The Myth? Post a comment below…

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Reduce Costs and Improve Morale

Wow, can you believe it’s November already? This year is flying by! I thought you’d enjoy this great article about cutting costs and improving morale…therefore improving customer service. Enjoy!
-Kathy Shook, Shoppers, Inc.

Reduce Costs and Improve Morale
How? Ask your employees. In an uncertain economy, CEOs scramble, looking for ways to cut costs and keep their businesses afloat. The most common step they take is to reduce the workforce by terminating employees, which reduces payroll but also has a devastating impact on morale and on customer service. It’s a short-term solution to a long-term problem.

What these CEOs should be doing is looking for ways to reduce day-to-day costs without sacrificing quality or service. Often, when they decide to do so, they hire high-priced consultants come in, look over their operations, interview employees, and then develop a glossy report of their findings. It’s an expensive and lengthy process. And most often it focuses on looking for ideas that will save $100,000 to $1 million in one shot.

Those CEOs are correct in turning to experts to identify areas in which they can cut costs—but they’re turning to the wrong experts. They should be asking their employees. Those employees already are on site. They already are knowledgeable about your people, processes, products, and services. They know what changes could be made to improve productivity and cut costs. They’re just waiting to be asked for their ideas—so ask them.


-John Tschohl, Service Quality Institute

And, if you need an inexpensive means to survey your employees, contact Shoppers, Inc. We can set up an online employee survey for you at a very low cost!

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IMPROVE CUSTOMER SERVICE…STEP 3

We are working on our Service Improvement Plan – our SIP; in order to make our customer service outshine everyone.  To exceed our customers’ expectations the first time and every time, so they become FANS of our company and rave about us to all their friends and family.

Before we did anything, we made a plan.  We don’t want to throw money at the problem before we know the following:

1.  How does our service quality rate today?

2.  How good should it be?

3.  How do we get from #1 to #2?

We’ve surveyed customers and employees and have that data readily available to analyze.  We’ve determined what we do right and also what frustrators in our procedures that kept our customers unhappy.

Step 3:  How do we succeed?

What we do right:  Since we now know what things make our customers happy, what they like about it, let’s emphasize it:

• Communicate the positive feedback to our staff 
• Take advantage of what we do better than competitors:  Brag about it!
• Improve our staff’s skills at these items and reward these behaviors

What we do that frustrates customers:  With the feedback we obtained earlier, we know what they don’t like. 

• Streamline procedures to work in favor of speed and service
• Communicate to staff; encourage their ideas and participation
• Improve our staff’s skills so the frustrators are removed

           

On both issues above, the key item is IMPROVE OUR STAFF SKILLS.  Provide the customer service training they need so everyone’s skills are excellent.  We all assume that everyone knows to smile, greet and thank.  But they don’t…TELL them what we expect. This gives staff the support needed to show our full, serious commitment to improving customer service.

And, don’t forget to practice what you preach.  Great customer service is for EVERYONE; not just outside or “external” customers.  Teach your staff to provide great service to each other, too.  Start calling co-workers “internal” customers:  so everyone is positive and helpful to each other.  You’ll be amazed and the attitude improvement and teamwork that evolves.    And that will lead to better service outside….which will lead to customers SELLING for you:  they’ll tell their friends how great you are!!

Follow our blog and our Twitter feed (#shoppersinc) for more information.

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American Express Survey Reinforces Value of Mystery Shopping

The results of a survey by American Express released on May 3 quantify the business benefits of mystery shopping and reveal the effect of customer service on the bottom line. The study shows that a large majority of Americans are willing to spend appreciably more with companies that provide excellent customer service, a finding that suggests investments in customer service can have significant financial returns. Mystery shopping companies are enthusiastic about the study because it reinforces their assertion that measuring and managing the customer experience through mystery shopping has a positive ROI.

Dallas, TX (PRWEB) May 11, 2011

The results of a survey released on May 3 by American Express clearly bode well for companies that conduct mystery shopping programs and act on them. The American Express® Global Customer Service Barometer quantifies the business benefits of good service and the penalties for poor service, providing more evidence in support of the value of implementing mystery shopping programs.

Good service is not just something Americans expect; it is something they are willing to pay for. American Express says seventy percent (70%) indicate they are willing to spend up to 13% more with companies they believe provide excellent customer service, the survey showed.

According to the American Express study, Americans are placing more and more importance on the value of good customer service while, at the same time, they believe the quality of service is slipping. Moreover, says Jim Bush, Executive Vice President of American Express World Service, "Getting service right is more than just a nice to do; it's a must do. American consumers are willing to spend more with companies that provide outstanding service, and they will also tell, on average, twice as many people about bad service than they will about good service. Ultimately, great service can drive sales and customer loyalty."

A key finding from the American Express study reveals that 78% of customers have opted to cancel a transaction or did not complete an intended purchase because of a poor customer experience. Conversely, three in five Americans would try a new brand or company for a better services experience.

Members of the Mystery Shopping Providers Association (MSPA) are enthusiastic about the release of the American Express study because it demonstrates the requirement that businesses pay close attention to the level of service they deliver to their customers if they are to be successful. "We see the study as providing further support for the value of mystery shopping," says MSPA President Lynn Saladini of ath Power Consulting Corporation. "Mystery shopping enables businesses to measure the extent to which they are delivering on their brand promises through the customer experience and to identify and correct deficiencies. Using the statistics from the study, you can calculate that two otherwise identical businesses would have very different revenue pictures if one had excellent customer service and one did not. If the one lacking in excellent service was a $10 million dollar business, its identical competitor could have revenues of $10.93 million. That $930,000 revenue differential is a compelling argument for using mystery shopping to improve customer service."

About Mystery Shopping and the MSPA
Mystery shopping is a process in which pre-recruited and qualified consumers measure the extent to which a customer's interactions with a business mirror the experiences the business intends. The purposes of this customer experience measurement include evaluating customer service and the degree to which a company's brand promises are being executed in the customer environment.

With more than 300 member companies worldwide, the MSPA has a diverse membership, including marketing research and merchandising companies, private investigation firms, training organizations, and other companies that specialize in providing mystery shopping services. Its goals are to establish professional standards and ethics for the industry, educate providers, clients and shoppers to improve quality of service, improve the image of the industry and promote the membership to other industry associations and prospective clients.

About the Subject Study
Details about the American Express study may be found at:
http://about.americanexpress.com/news/pr/2011/csbar.aspx

Contact

• John Swinburn
  Mystery Shopping Providers Association
  214-389-7018 11

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Don’t Hire Employees Who Don’t Like People

John TschohlCUSTOMER SERVICE

If there is one thing a company can do to help ensure that it will attract and keep customers, it is this: Hire the right people. While that might sound like a rather simple solution, it isn’t. The hiring process is crucial to the success of any organization and should be handled with great care. In the case of employees who will be dealing directly with customers, the hiring process is especially important.

At one time or another, most of us have had contact with employees who clearly do not enjoy dealing with people. They don’t make eye contact, they don’t smile, they aren’t helpful, and they send the message that they wish you would just go away. That’s bad for you, as a customer, and even worse for the company that hires them.

At Commerce Bank, if the applicant doesn’t smile during the first interview, there will be no second. When Commerce, which I consider to be the most customer-focused bank in the country, opened its first four stores in Manhattan, it interviewed 3,400 people and hired only 42 of them. Southwest Airlines also hires very carefully—only one out of every 100 applicants. Other airlines think their airplanes are their most valuable asset; Southwest knows it’s their employees.

I strongly believe that it is more important to hire an employee who has a good attitude and genuinely enjoys working with people than it is to hire one who has good technical skills. Technical skills can be learned; good attitudes cannot. A bad hire could be doing irreparable damage to your business by driving your customers away from you and into the waiting arms of your competitors.

The first step in the hiring process is to develop a job description, one that includes detailed descriptions of the tasks and responsibilities you expect the employee to fulfill. Next, you must prepare for the interview. Let’s face it, someone could walk into your office, feed you a great line, and walk out with a job offer. It happens every day. Those people have prepared for the interview— and you should do likewise.

Develop a list of questions to use during each interview so you get answers that are easy to compare and evaluate among applicants. Ask questions that require more than stock answers, ones that will require the applicant to share real experiences.
James Schrager, President of the Great Lake Group consulting firm in South Bend, Indiana, recommends two questions: What was your biggest failure? Can you describe a situation when you didn’t get along with a co-worker and how you handled it?

Fred K. Foulkes, a Professor of Management Policy at Boston University says you should never hire anyone after just one interview. He also recommends that you involve other people in the interview process, especially if they’re going to be working with the new hire. That does two things: It gives you their input, and it gets their commitment to the success of the person you hire.

Once you have hired a person, it might be a good idea to put her on probation for three to six months. That gives you time to ensure that she is capable of doing the job before making her a permanent member of your workforce. Hiring the right people is the first step in the process. Training them and treating them well is the second. Even when you hire high-performing, customer service-driven employees, you must train them to meet your service standards— and you must do so within their first 30 days on the job.
If you hire the right people, train them, and treat them well, you will reap great rewards in the form of customer loyalty and increased profits. There is no other step you can take that will have a greater impact on your bottom line and the success of your organization.

John Tshcohl -described by Time and Entrepreneur

magazines as a customer service guru, is also

an International strategist and speaker.  He

can be contacted at John@servicequality.com

THE RETAIL OBSERVER JANUARY 2010

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IMPROVE CUSTOMER SERVICE…STEP 2

We are working on our Service Improvement Plan – our SIP in order to make our customer service outshine everyone.  To exceed our customers’ expectations the first time and every time, so they become FANS of our company and rave about us to all their friends and family.

Before we do anything, we are going to make a plan.  We don’t want to throw money at the problem before you know the following:

1.  How does our service quality rate today?

2.  How good should it be?

3.  How do we get from #1 to #2?

We’ve surveyed customers and employees and have that data readily available to analyze.

Step 2:  How good should our service quality rate?

First, let’s analyze the results of the surveys:

• What do we do right?
• What are the top 3 frustrators for your customers?
• What are the top 3 frustrators for your employees—what keeps them from doing a better job with your customers?

List all the things done well first.  They tell us the basic skill level of the staff AND what customers like about doing business here.  These are the building blocks for our plan.  Did we find anything surprising on this list?  Did the things we thought were done well show up…or not?  How we feel about what is perceived as done well?  

Next, let’s really concentrate on the frustrators.  We have two lists:  things that frustrate customers and things that frustrate employees.  The employee list may not seem as important, but it’s really the key list here.  Employees know what they are supposed to do for customers, AND they know what hinders them from doing that well.  Pay attention to their list:  they work with customers and procedures every day.  They are the experts.  Most things on their list will be things that can be fixed.  So let’s highlight those items and put change into motion to streamline procedures, update documents, pricing, equipment where needed.  This gives staff the support needed to show our full, serious commitment to improving customer service.

Now, how about customer frustrators?  As we review the list, we keep in mind that many of these items are perceptions—and maybe things that we first think cannot be fixed.  But we are wrong.  Perceptions can be “fixed”…but maybe not by specifics, but by overall service.


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The Simple Truths of Service by Barbara Glanz

Once in a great while you will see something that will bypass the brain and go straight to the heart. I guarantee that this short, 3-minute movie will be one of those times.



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training, bad customer service sample, good customer service, customer service training

Poor Customer Service?

Here's a cute cartoon of Mr. Bean and a great example of some poor customer service skills.  Enjoy!

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