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VAT Rise - How Retailers Need To Adapt
Tue 22 June 2010
Following the Government announcement of a VAT rise to 20%, Tim Ogle, CEO of Retail Eyes, advises on what retailers need to do to adapt to inevitable changes in buying behaviour:
“While the VAT rise is bad news during fragile economic times, this is where retailers must draw upon and strengthen their customer retention and brand loyalty by getting service and experience right.
“Adopting aggressive pricing strategies to drive footfall is hard to sustain and doesn’t necessarily lead to brand loyalty; customers just choose the store that offers the best price or bargain at that time. And now customers will be more cautious that ever over their purchasing decisions, scrutinising and debating over every purchase they make.
“As customer buying behaviour becomes more cautious, quality of service is where retailers can make the difference and deliver more value for money.
“Customers will be looking for businesses to deliver service and experiences that they feel give them the best value for money, giving them the reassurance to spend and increasing the chances of them returning to your store.
“The role of your staff in delivering this experience will be more important than ever. Ensure staff are well trained on the expected standard of service and clear on the difference good service can make. Make sure they know the importance of customer interaction and they acknowledge and are attentive of customers as soon as they come in the store.”
“Businesses that want to ride this bumpy road to recovery and come out the other side stronger, should be investing now in continuous customer feedback through programmes like mystery shopping and customer satisfaction surveys, to ensure staff are delivering to expectations. Without this, you’ll never know if you’re providing an ‘experience’ that is building customers loyalty and retention or if there are areas that still need improving.
“Retailers need to review their plans to ensure improving the consumer experience is a core focus throughout the business if they're to ensure they're ready for the challenges that will arise with the increase in VAT. There are several companies such as JD Sports, Republic and Pets at Home who we are working with us to drive this focus and they have been bucking the trend with strong financial results.”
Tips from Retail Eyes on improving your customer experience:
Tip 1: Be polite! It’s the first rule of customer service. A simple warm welcome and a friendly farewell will really help attract and retain customers. Even when it’s frantic, it’s important to be polite – it doesn’t cost anything to do but poor manners can cost you business. Retail Eyes’ research shows that 56% of customers will leave an establishment before making an intended purchase if they get poor service – so good manners will have a direct impact on your bottom line.
Tip 2: Acknowledge and interact. Acknowledge the customer’s presence in the store with a friendly hello and politely ask them if they need help. If they don’t need help, don’t be pushy but just be aware of them in the store in case they do need assistance. If assistance is needed, be attentive to their personal needs and offer advice and recommendations.
Tip 3: Stay calm at all times. When customers are experiencing longer than usual waits and queues, staff often bear the brunt of the customer’s frustration. Remember to be calm, don’t raise your voice and treat the customer with empathy and understanding. It’s unlikely that they will expect this response so you can turn the situation to your advantage. Generally, Britons are happy to queue up for something they value, and by communicating with them you can make their experience a much more positive one.
Tip 4: Train temporary staff. Treat temporary staff like any other employee and make sure they get all the training they need on your business and customer care. If they’re not treated like normal staff they will not interact with the customers in the same way. They’re just as important at projecting the image of your store as your regular employees so make sure they feel involved and valued.
Tip 5: Customer feedback is key. In a survey by Retail Eyes, only 6% rated high street retailers and hotels as delivering good customer service. To maintain or improve service, it’s vital to get customer feedback. Only then can you be confident that you’re meeting customer expectations and operating your business to the best standards.
“While the VAT rise is bad news during fragile economic times, this is where retailers must draw upon and strengthen their customer retention and brand loyalty by getting service and experience right.
“Adopting aggressive pricing strategies to drive footfall is hard to sustain and doesn’t necessarily lead to brand loyalty; customers just choose the store that offers the best price or bargain at that time. And now customers will be more cautious that ever over their purchasing decisions, scrutinising and debating over every purchase they make.
“As customer buying behaviour becomes more cautious, quality of service is where retailers can make the difference and deliver more value for money.
“Customers will be looking for businesses to deliver service and experiences that they feel give them the best value for money, giving them the reassurance to spend and increasing the chances of them returning to your store.
“The role of your staff in delivering this experience will be more important than ever. Ensure staff are well trained on the expected standard of service and clear on the difference good service can make. Make sure they know the importance of customer interaction and they acknowledge and are attentive of customers as soon as they come in the store.”
“Businesses that want to ride this bumpy road to recovery and come out the other side stronger, should be investing now in continuous customer feedback through programmes like mystery shopping and customer satisfaction surveys, to ensure staff are delivering to expectations. Without this, you’ll never know if you’re providing an ‘experience’ that is building customers loyalty and retention or if there are areas that still need improving.
“Retailers need to review their plans to ensure improving the consumer experience is a core focus throughout the business if they're to ensure they're ready for the challenges that will arise with the increase in VAT. There are several companies such as JD Sports, Republic and Pets at Home who we are working with us to drive this focus and they have been bucking the trend with strong financial results.”
Tips from Retail Eyes on improving your customer experience:
Tip 1: Be polite! It’s the first rule of customer service. A simple warm welcome and a friendly farewell will really help attract and retain customers. Even when it’s frantic, it’s important to be polite – it doesn’t cost anything to do but poor manners can cost you business. Retail Eyes’ research shows that 56% of customers will leave an establishment before making an intended purchase if they get poor service – so good manners will have a direct impact on your bottom line.
Tip 2: Acknowledge and interact. Acknowledge the customer’s presence in the store with a friendly hello and politely ask them if they need help. If they don’t need help, don’t be pushy but just be aware of them in the store in case they do need assistance. If assistance is needed, be attentive to their personal needs and offer advice and recommendations.
Tip 3: Stay calm at all times. When customers are experiencing longer than usual waits and queues, staff often bear the brunt of the customer’s frustration. Remember to be calm, don’t raise your voice and treat the customer with empathy and understanding. It’s unlikely that they will expect this response so you can turn the situation to your advantage. Generally, Britons are happy to queue up for something they value, and by communicating with them you can make their experience a much more positive one.
Tip 4: Train temporary staff. Treat temporary staff like any other employee and make sure they get all the training they need on your business and customer care. If they’re not treated like normal staff they will not interact with the customers in the same way. They’re just as important at projecting the image of your store as your regular employees so make sure they feel involved and valued.
Tip 5: Customer feedback is key. In a survey by Retail Eyes, only 6% rated high street retailers and hotels as delivering good customer service. To maintain or improve service, it’s vital to get customer feedback. Only then can you be confident that you’re meeting customer expectations and operating your business to the best standards.
Stand Out From The Crowd
Customer Experience is one of the most cost effective methods of differentiating yourself from the competition.
Success Through Satisfaction
Customer satisfaction surveys are a highly effective method of gaining feedback from your customers and improving customer loyalty.