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Sat 14 Feb 2009 04:00 AM

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Are you being served?

Gulf retailers may find that investing in customer service is a small price to pay for more loyal shoppers.

As consumer spending turns down across the region, Gulf retailers may find that investing in customer service is a small price to pay for more loyal shoppers.

It is the stuff gulf expat dinner parties are made of: the raised eyebrows over tales of customers forced to pay service charges for returning faulty goods, met by knowing nods from the old timers with a rose-tinted view of the past.

It is easy to dismiss these complaints as a means for disgruntled expats to let off steam. But has customer service in the Gulf really plummeted to the depths that some would have it, or are homesick residents simply making unfair comparisons? For retailers battered by slowing tourism and a stronger dollar, it might be worth finding out.

I honestly believe that many people [in Dubai] complain about something and nothing in many instances…it’s almost a malaise.

"Somewhere between 50 and 80 percent of people's perception of a brand is driven through its people," says Michael Hughes, executive director of strategy at The Brand Union Middle East.

And when times get tough and consumers are forced to cut back on their spending, they will continue to favour the brands they like.

Naeem Ghafoor, chief executive of retail consultancy Skyline Retail Services, says most of the customer gripes he hears are valid. "I can understand if people are upset because generally, the levels of customer service here are pretty bad," he says.

Inadequate training, a transient workforce and cultural differences all contribute to shopping experiences that fall short of the five-star mark. In addition, customer service in cities with high tourist figures can suffer due to the low number of recurring customers.

"Because we're in a bit of a cultural melting pot, your staff must be well versed in how to deal with multiple nationalities," Ghafoor says.

For example, while shoppers from the US are used to salesmen engaging in casual conversation with them, people from Russia and China generally like to have some time on their own before being approached.

Poor service cannot always be blamed on employees. Some retailers, though not all, provide staff with virtually no training at all, wary of investing in employees that may leave. "A lot of it has to do with the growth rate [of businesses] here being so high that companies are having to play catch up all the time," Ghafoor says.

Still, some of the larger firms should be able to provide employees with more training than they currently do. "If they're big enough, they should have their own internal retail training programmes. I know that the majority of franchises that they run provide them with good sales training material."

Even with training, motivating an employee who only plans to stay in the country for one or two years with a view to making some extra money could be difficult. Some sales staff are educated to degree level in their home countries and have gone into retail simply to make ends meet. They can become disillusioned when they realise the true cost of living in the Gulf compared with their wages, Ghafoor says.

Mohi-Din BinHendi, president of luxury retailer BinHendi Enterprises, franchise-holder for brands including Calvin Klein and Hugo Boss, believes customer service in his stores is good, but acknowledges that there is room for improvement.

"There is a customer service that has reached to a very good level, but we need to get to the ultimate," he says. "We are trying to train the people that we have and it is an ongoing thing to take people to the international level of customer service."

Still, BinHendi, whose hospitality division includes casual dining restaurant Ruby Tuesday and coffee chain Second Cup, concedes that customer service in one of Calvin Klein's New York outlets may be superior to that in the UAE. Gulf consumers need to become more demanding, he argues.

"The expectation of people there is so high that the staff must be five-star or those people will immediately complain. People here don't complain. I would advise people to give their remarks on customer service, only then can you improve it," he says.

There is also an onus on international brands to ensure their franchise outlets are maintaining their service standards, says Ghafoor. "They're not as concerned as they should be about it. I think they should be more involved in what's happening with their franchises."For the head of the region's largest customer service consultancy, however, Gulf customers are far from always right. Robert Keay, managing director of Ethos Consultancy, believes Dubai specifically has turned into a city of whingers.

"I think the UAE, and Dubai in particular, has developed its own culture of complainers," he says. "I honestly believe that many people complain about something and nothing in many instances... I have lived here for almost seven years now and I have gotten used to a number of people complaining for the sake of complaining. It's almost a malaise."

Gulf expats who say service is better in their home countries often have a short memory, Keay claims. Customer service in the region's retail sector is often patchy but is by no means worse than in other developing economies. "If you take it in context, I actually think that for an emerging country, the customer service delivered by many organisations here is pretty good compared to the West."

[When] you have to go out of your way to make a sale, that’s when you really know how good your staff are.

When the customer experience is poor it is usually because Gulf retailers hire inexperienced staff and provide them with inadequate training, he adds.

Ethos provides companies with mystery shoppers to help them rate staff and has seen a 30 to 40 percent increase in its order book for this year. Demand has been particularly strong from the retail, banking and government sectors.

"Someone said to me the other day that we must be the only company in Dubai still recruiting," Keay says.

But many clients fail to implement the findings of the company's studies, choosing instead to leave them with their research departments.

Keay believes it is hard to make generalisations about customer service in any given sector. "We've been benchmarking the retail banking sector for four years now and generally speaking we have seen service dip in that four-year period. But we've seen half a dozen banks improve their services," he says.

UK-based business training consultancy Joshua is about to release its second survey on customer service trends in the Gulf region, which shows a widening gap between the level of service customers expect from retailers, and what they are actually getting.

Managing director Ruth Fields says staff behaviour is what has changed most dramatically since she first began working in Dubai seven years ago.

"It's about recruiting the right people with the right attitude, and then actually giving them the right skills to do the job correctly," she says. "I know that an awful lot of the labour force may only stay for two or three years, and very often organisations don't see the value in actually training them.

"But of course it doesn't matter if somebody is only staying for two years: the organisation still has a responsibility to their customers."

Increasingly, companies in the region are starting to see the value in differentiating their brands through customer service. This means moving beyond what Hughes of The Brand Union calls "generic" customer service, or quick service with a smile. For example, five-star hotels that fuss over guests to the point of annoyance may have to rethink their strategy.

"One of the brand values may be consideration, and is that [behaviour] something that is in line with the brand? No, it's not," he says.

After years of breakneck speed expansion, the consumer slowdown could be just what the region's retailers need, as companies are forced to work harder to attract business.

"When times are good, nobody complains because everybody is making money," says Ghafoor of Skyline Retail Services. "But when times get tough and you have to go out of your way to make a sale... this is the time when you really know how good your staff are."

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