Survival of the fittest

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LAKHANI: Loyalty schemes modify customers’ attitudes.

It is seldom that we find someone who is willing to sell to you, very rarely that you get anybody offering advice such as telling customers an item doesn't suit them, up-selling or cross-selling.

"It's almost as if they {employees] feel frightened; they assume that you know what you want to buy. When we are mystery shopping and engaging with employees, their customer service skills do come out once they feel comfortable that you won't bite their head off or be too demanding," he says.

Kaey believes that in the current economic situation and as retailers face greater pressure in this region, stores should be taking their staff to one side for more training in just customer service, but also in product knowledge.

"What we find with the ones we end up working with, major blue organisations across the Middle East, is that they think they have done their part by getting the brand," he reveals.

"Generally speaking they go to the Far East to recruit and then assume that their employees will be able to stand there and smile, say have a nice day and the customers will buy. When we talk to the staff, we find that many of them have not received training," he says.

If retailers recognised to value in the asset, the person serving, their sales would increase dramatically as a result of them offering their employees the right training.

"If there are fewer people walking in the door then retailers need to convert the ones with money in their pockets. Once you can turn it into a financial calculation then the retailers will listen. How many people walked into the store today? How many bought anything?" he explains.

Unfortunately the region's retailers are driven by the balance sheet, he says, and "they have already made the massive investment in the brand, the store and the stock, so they often cut corners in the wrong areas."

Ethos Consulting hires experts from across the globe to conduct one-to-one training with employees, who will go in and say ‘here is the mystery shopping report from yesterday, here is what you said to him, he went out the door and didn't buy anything, and here are the reasons why' and "that hour of training is probably more than they've had in the previous year".

Other factors affecting the in-store experience includes the process of reaching and queuing for the cashier, which Kaey says is often "tortuous".

Whether it means shortening queues or not keeping customers on the phone, the more convenient the experience is, the more likely it is that retailers will get a satisfied customer - and a sale. Retailers must be fast and agile to respond to consumers' demands.

"In the next 12 months, customers are going to show how their feet walk. The value issue is coming more to the fore. Retailers have lower budgets now, so they need to make sure that customers' experiences are excellent," he comments.

Companies that take a proactive stance and invest heavily in talent within their organisations are likely to maintain their leadership and loyal customers in the long-term. One such example is Beiersdorf Middle East.

Managing director Robert Taylor-Hughes says that the company has no cost-cutting initiatives in the pipeline this year. "Our fixed costs are always planned in line with our sales objectives, perhaps the only significant change will be non-essential business travel and we will use our video conference technologies more often, upgrading our bandwidth in our brand new offices to 8mb for improved streaming and global MSN Live meetings."

He says there will no downsizing required as the firm employs just "50+ highly talented multi-national employees in our region, responsible for 16 countries, who probably achieve the same workload as 250 of our competitors' employees.

This is evident by our expanding market shares and ‘best in class' growth. Globally and locally we are three times better than market growth, he boasts.

Although the company will continue to recruit in 2009, it will be "very mindful of HR gaps that can be overlapped internally and use consultants where necessary for specific project work to manage long-term fixed costs."

"We will continue to train our talent during 2009, often this is the first budget area to be cut. We believe in investing for the future of our people and brand equity, we will sail through these headwinds with great team spirit whilst others get caught in the storm," he says.

Priyanka Lakhani, planning and business development director for Dubai-based ICLP, the agency specialised in maximising the profitable impact of retail loyalty marketing initiatives with clients including L'Oréal and Motorola, explains that the firm designs programmes enabling retailers to identify, track, understand and modify their customers' attitudes.

The company strives to protect retailers from fierce competition, increase their footfall without the need for further discounting. However, the "discounting war" has resulted in more and more products leaving stores at narrower margins, she says, and "the public is now well trained to seek out the bargains.

Therefore, it becomes virtually impossible to maintain higher price points based on brand image when there are a number of discount channels available for the product.

Lakhani says this is where loyalty initiatives must be considered, allowing retailers to collect the "vital customer data that makes a customer-centric approach possible."

"They also provide a direct channel of communication and a rewards process that supplies additional footfall."

She warns, however, that poor loyalty programmes have been " used to do little more than promote sales events."

With the current economic climate, retention is crucial and enhanced engagement strategies will offer retailers a genuine business advantage, she adds.

RELATED LINK: Back to basics for survival

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