Retailers, Coupons Can't Mask The Lack Of A Great Experience
By Bob Phibbs
An upscale restaurant chain CEO called and asked me to speak to their franchisees about discounting. He felt it was destroying the perception of their brand in customers’ minds. He knew I’d written the book blasting Groupon as one of the worst ways to market a retail business, so I seemed like a natural fit to him.
Even though he had read my book, Groupon: You Can't Afford It--Why Deep Discounts are Bad for Business, some franchisees kept offering Groupons, which was reducing profits and affecting other locations. I told him in order to kick the habit of offering Groupons, they had to do the hard work of creating a better customer experience in each location.
“No.” he said, “ I need you to show empirical data showing why discounting is so bad.”
“And you think that will stop it?” I asked.
“Yes, you’re the retail expert; they’ll listen to you.”
I replied, “No, they won’t. If they read the book and are still using heavy discounts to attract customers, then obviously those franchisees believe the discounts are working. They feel if they stop the Groupons, everything will crash.” And then I reiterated, “Unless they change the experience, they’re kidding themselves.”
Needless to say, he didn’t hire me to speak.
The hardest thing for any retail business, service provider or brand is to do the hard work of looking at the experience your customers are having in your stores and valuing yourself enough to do the heavy work of hiring better, training better and selling better.
The big messages in retail are that technology and big data are going to create a world where discounts become automatic and instant in-store disruptions…
Where customers walk past a storefront and their smartphones receive a message that says, “Come in and get a freebie or a discount today.”
Once in the store, another app would automatically wake up your phone and send you a message, “Welcome to (name of store) (your name)! Get 10% off your order today by clicking here.”
Ibeacons, small wireless sensors that pinpoint your location in a store, will then send your phone notifications of items around you that are on sale or notify you of items you may be looking for.
If coupons are always available - automatically generated by an app, your customers will be programmed to not buy anything without one.
Some customers, of some chains, already won't...
While some feel smartphones and big data can remove pain points for customers like waiting for a salesperson, waiting for stock checks or waiting for a cashier, most of what I’m hearing is big retailers will use big data – all previous purchase information, online searches and shopping history - to push discounts to customers.
Technology is all some larger retailers have in their quiver to juice future sales.
The problem is, it still hasn’t addressed the experience of your human customers in the store.
And if you’ve been marketing with coupons to get people in the door and complaining you’re not making enough due to the economy...
I can’t tell you how many retailers I’ve heard from who are struggling with their one shop. Traffic counts are down. Customers are haggling for deals – which they give them. They look everywhere but where it counts – the experience.
If you have Bitter Betty on your sales floor – you know the ones who suck the life out of you, the ones who complain, moan and generally are there for a check – get rid of them. Even if you’re married to them!
If you have employees who are walking zombies, who disconnect their heart the moment they step through the doors, the ones who minimally help customers and only lighten up when the store is empty – get rid of them.
If you yourself don’t believe 100% in your pricing, if you feel like a sham by working retail, if you are embarrassed to say you sell at retail – you have some work to do on yourself.
Much like a person who is unhappy in a marriage needs to work on the relationship, you need to work on the relationships in your store.
Offering more coupons and discounts, like having an affair, only masks the real trouble – it’s not working.
And someone is paying for it, most likely you and your family.
Look, I’m not some Luddite believing the world doesn’t need technology, but it has to be technology with humanity.
I do not believe in a world where smartphones direct the customers like rats to the cheese is a foregone conclusion.
What to do
If you are willing to open your heart, remove the barriers you’ve erected in your own head about what you are trying to sell…
If you are willing to not settle for Bitter Betty…
If you are willing to do the hard work necessary to compete in a global economy…
Then you won’t need to kid yourself that coupons are helping you.
You’ll be able to create a destination customers will happily drive to – past several of your competitors because it is such a human experience.
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