January 1, 2018
Front-line flexibleBY DIANE STEWART-ROSE
Building retail brand loyalty with value-added service
Competing on the basis of price and in pursuit of profitability, Big Box stores allow front line staff little flexibility in offering value-added services for their shoppers. While this likely improves the bottom line in the short-term, it imperils their brand in the long run — but may offer opportunity to independents that compete for consumer attention.
Recently, in a chain restaurant, a young order-taker pleasantly asked if I would like my order delivered to my table. “Lovely,” I thought, and said I was sitting outside on the patio. “Oh, we’re not allowed to deliver out there,” she replied, making it seem like the patio was in a different neighbourhood and I was some kind of experiment in customer relations.
To confirm the latitude allowed for front-line salespeople in chain stores, I ask a 20-something commission salesman in a retail environment what latitude he has to offer a settlement to an unhappy customer. Or to ramp things up and add to the experience of a satisfied customer. “Zero!” he says. “There used to be a policy where you could offer free goods on a completed sale, but this policy was stopped because the salespeople were just giving away too much free product! Managers used to be able to offer a volume discount of 10 per cent as directed by the corporate offices, but this practice, too, was discontinued.”
Then how can an independent retailer capture this opportunity and turn it into an advantage in the marketplace? Assume the independent garden centre sector retailer chooses not to compete on price, as they simply do not have the buying, marketing and advertising power of the massive international Big Box stores. In that case quality, selection and value-added service are effective alternate strategies.
During the summer of 2017, an acquaintance travelled by boat from her island cottage in Muskoka, docked the boat and hiked to the grocery store in the nearest small town. At the checkout, she became aware she had forgotten her wallet and was unable to purchase bread and milk. “No problem” apparently, the owner of this locally-owned grocery store gave the customer $50 and invited her to shop and pay him back at her convenience. This story combines the elements of generosity and service-minded intent that could elevate the owner to hero status.
The decision to give away free cash may be reserved for the owner of the business, but can successful independent garden centres empower their front-line staff, to also make decisions that may even involve revenue? What tools do they have at their disposal?
How much structure and policy is required to guide staffers in such circumstances? Are the policies flexible, or do they vary within defined parameters?
Do customers come to expect a pervasive attitude of generosity? Could this approach work in either a rural or urban setting and will it work across Canada?
Service starts hereI asked owner/operator Paul Reeves of Plant World in Toronto if he and his staff practice front-line flexibility in servicing customers.
“We certainly do practice this philosophy,” Reeves explains. “However, not all levels of employees are given the same amount of flexibility. Our seasonal cashiers and carryout staff are not able to make these decisions as many of them they are only here for approximately eight weeks and we wish to have consistency and control, both internally and for our clients.
“As in most retail operations, the more senior a member, the more flexibility. Our sales staff are encouraged to keep or make the customer happy when it comes to returns, warranty extensions, etc. If it is reasonable, they go for it. Our managers obviously have more flexibility on anything from comping an item like Myke, discounting a purchase or squeezing in a delivery when our schedules are fully booked.”
What and whenValue-added services may take many different forms — from advertised messages to generous return policies and could include any of the following tactics:
- Broadly or narrowly advertised “value-added services” may include sale or event previews.
- Extending a sale past the set dates or offering the sale early.
- Discounting merchandise below standard mark-up as a gesture of recognition for volume purchases.
- Extending warranties where the plant is in poor health or growth could be delayed due to a late growing season.
- Free services or goods to recognize a customer who has performed a valuable reciprocal service. For example, they allow you to photograph their garden for use in advertising.
- Loyalty programs (where a client registers and provides personal contact information) can allow regular shoppers to accumulate credits for future purchases.
- A discount may be assigned to an immediate replacement purchase from a particular product category or a partial refund could be assigned towards a future purchase in a non selective category. (Sorry about the dahlia bulb, but here is something towards your next purchase) Assuming there is a paper trail, this practice may be tracked effectively.
- Store credits can be applied to an in-house loyalty account for future purchases (compared to an outright refund).
I have heard people speak about how plants from independent garden centres cost a little more, but always seem to thrive in the garden. The consumer usually adds, “It is worth it to spend a little extra.” This perception, along with a superior selection in any live-goods category, can be perceived as “value-added service” and be broadly advertised.
The best way to express appreciation to loyal customers is to address them as a group by distributing mail over geographic regions known to supply-dedicated customers, or by creating a loyalty program with a private mailing list or even by collecting email addresses. This private distribution list will be useful for widespread offers of sale events, special offers and other privileges. Loyalty programs can also offer a wealth of data about shopping habits such as history, average purchases and frequency of excursions. Front-line managers accessing this information can easily answer the question: Is this customer a regular shopper?
Walk the lineOver many years of dealing with consumers on the front line, I have been asked by owners and managers alike: What action is required in these circumstances to make this customer happy? To be asked this question is an empowering experience, encouraging the employee to find a solution that is right for both the garden centre and its customer.
In the words of Nelson French, Assistant Manager at Plant World, “This kind of latitude builds confidence, breeds leadership, and instils a sense of ownership among staff, encouraging solutions tailor-made to the unique situation at hand.”
Owner Paul Reeves agrees. “I absolutely believe this does. If everyone in the company except the manager or the owner must
defer a decision, then it constantly chips away at the value the rest of the team brings to the table. It has taken time, but as an owner, I’m fortunate to say that I rarely get asked to address a client’s concerns because we do give that flexibility to our people. I often ask my management team: If the client is looking for more than you are willing to provide and you are calling me in, what am I to do?
“Should I agree with my team member and perhaps make a customer unhappy? Or override my associate and undermine their ability to do their job? In most cases they know how I will handle it and use their judgement on whether the request is reasonable. It is important for members of our service team to work out a reasonable resolution as circumstances require.”
Walking the line between what makes any customer completely happy and reasonable expense to be absorbed by the business can be a tricky affair when this policy is applied on a practical level, requiring patience and diplomacy in pressure situations. In a busy garden centre with rotating staff schedules and a high rate of seasonal turnover, it can be really difficult for employees to identify loyal customers, and tough to train new employees to apply policies with finesse.
Dave Flatters, owner and operator of Carleton Place Nursery, has a lean management team between himself and his customers. His experience is slightly different as a result. While he and co-owner Heather have endeavoured to empower their front-line employees to offer extra services and discounts to make customers happy, Flatters finds sometimes front-line workers can “be intimidated by the responsibility.” Perhaps the simple explanation is, “They don’t sign the cheques.” While Flatters notes empowering employees in this way is the current fashion, he has better luck with actual policies supporting the approach. For example, Carleton Place offers structured discounts on high volume purchases. Employees are comfortable offering this service to customers, because they know what the owner would offer. On warranties and replacements for live goods, front-line workers understand they have full latitude. Analysis reveals that Carleton Place’s live goods replacement costs are very low, making it easy to extend generous service.
With just a few simple policies in place, front-line workers at Carleton Place can smile, look the customer in the eye and shake hands knowing the owners will applaud any employee for making a customer happy.
Let’s make a deal for serviceDiscounting volume purchases can be risky, and even discounting on special sale dates can create ongoing expectations. Although the reasoning behind a sales-driven strategy may be solid, discounting quality product may “foster an entitlement mind-set and an on-going expectation of special treatment,” according to Nelson French.
“In my experience, shoppers can become accustomed to discounting and request discounts on non-sale days and for smaller purchases,” says French. “How do you avoid this mindset? Applying service with equanimity in mind seems to provide a good solution.”
Paul Reeves states, “It is important to treat all customers equally, a $40 client is just as important as the client purchasing $1,400 — our offers would be the same for both. We are not a ‘Let’s make a deal’ kind of company; we believe this erodes our reputation and relationships over the long run. In retail, we get asked daily if someone can have a discount. We offer special days every week, like Senior’s Day, but we stick to those days. This is where staying consistent as a team is important. However, extending a sale on an item when the date has expired or there is some cosmetic damage, or adding an extra year of warranty to a previous plant purchase because it seems to be struggling, are all acceptable practices by our managers.
“No questions asked is the premise for our return policy. However we try to engage in some coaching to assist the client in being more successful with new purchases. A bill of sale and the item are required for returns unless they are part of our Loyalty Program.
“I think it is extremely important to have some common sense. It’s important for our team to think about how they would like to be treated if they were on the other side of the counter. Also, unreasonable requests create opportunities for our team to help in some manner, but not necessarily granting the specific request.”
Counting on Mother NatureIn the garden centre business, we are all prepared to add value when Mother Nature fails to co-operate. A cold, wet and late spring can generate a line-up of customers wanting to claim refunds for dormant hydrangeas. A hot, dry summer can stress newly-planted trees and shrubs. A humid and wet summer can produce aphids. For each situation, we need to cover Mother Nature’s back!
Service staff may take this opportunity to educate gardeners, although they may not be in the mood to hear about how Mother Nature works in mysterious ways. Education is a value-added service too, available only from garden centres with informed and knowledgeable staff. Additional sales may be achieved through education.
When I call Art Knapp in Kamloops, B.C., I get a telephone routing system that offers an option to “Choose #1 for the Information Line.” I like the suggestion that informing the public is a high priority.
Forward-thinking owner and operator Maury Hik at Art Knapp Garden Centre and Florist recently reviewed his policy for empowering front-line workers. Hik has come to think that, “as a company grows and changes, it looks towards a future where front-line workers can do more and act independently.”
Hik draws my attention to Pike Place Market in Seattle. “The entry level job of a fishmonger has gone from a very difficult, sometimes unwanted, job to a front-line exciting job that is world-renowned and represents the level of customer/employee interaction that we are striving for.” He now embraces the concept that staff can add value with service.
With typical high turnover, Art Knapp does not enable all staff to add value, but leaves customer recognition to year-round employees. His full-time cashiers, Hik reasons, “really do know and recognize regular customers and are permitted to offer on-the-spot incentives of merchandise rewards such as a free package of seeds or a long-stemmed rose.
“Requests for heavy discounts flow directly to managers. As a small business, we watch every discount and every dollar,” said Hik.
Experience is the best teacherWhile there are obstacles to flexibility, the strategy differentiates independent garden centres as offering value-added service.
Independent garden centres should address regular customers as a group with advertising, information services and front-line policies applied with flexibility and equanimity. The clear upside of empowering employees to find creative solutions is that it will build capability, enhance a sense of fairness for all parties and result in reciprocal loyalty from customers.
As Maury Hik of Art Knapp says, “We are in the process now of stepping back to look at the whole picture of discounting, working to build brand loyalty in our family-owned business, so we can offer service-oriented alternatives to price discounting, while continuing to develop a positive experience for our regular customers.”
Paul Reeves observes the best results are achieved when policies are applied with fairness in mind. “I believe it builds trust and loyalty when there is a consistency amongst the team and departments. There will always be a few customers expecting constant special treatment, but we are honest with them and simply say, unfortunately we can’t do anything extra this time, as we need to treat all our customers equally — you are all important to us!”
Diane Stewart-Rose is a Toronto-based freelance writer.