The Making of A Great Retail Store: How To Succeed At Gaining More New Business (Case Study Great Store or Restaurant 11)


This article is installment number 11 of a case study on the makings of a great retail store or restaurant and published in Wine by Cush blog.

Why is that greatest customer service will not result in increasing sales? That is a question I was asked by someone regarding T Mobile winning award after award for its awesome customer service but not benefiting in higher sales. Why is that? That is a good question and can be answered in many ways. I think the problem is it cannot be answered in simple terms and remains a question. I have my own answers. Eons ago when I was training to be a manager, I took many seminars in Silicon Valley and learned a good deal that parallels what one learns in traditional management classes that I have also taken. Seminars are much more practical and do benefit in ways no classroom would. One of the classic and older theories involving motivation is Herzberg Theory of Hygiene. In short, a long time ago an experiment on workers proved if the working conditions were improved, the workers would be more motivated and productivity would increase. There is more to it but it was also learned that the motivation would stop once the problem was solved. These factors were called “demotivators.” Their absence results in lower motivation but their presence only helped until they were no longer absent. If the lighting was bad, or workplace was filthy or what not, the workers would like their work less. Once these were fixed (the hygiene factors), they liked working more and motivation increased. But this motivation increase stopped at that point. If the lighting was changed to the best lighting available, the motivation DID not increase. The absence resulted in less motivation but the abundance did not result in higher motivation.

How about our sales situation? Some carriers have poor customer service or service overall. AT&T gets many complaints. I asked an AT&T rep how many iPhones were in use in San Francisco. He counted in his mind and told me. I forget the number but was huge. No wonder, the unexpected amount of traffic slowed networks and dropped calls. They will get by that problem by acquiring T Mobile which increases their cell site capability by 30%. In the meantime, they are behind in customer service and overall service. The question is what if they did fix the traffic problem overnight, will the subscribers stop whining and be more motivated to be on AT&T and use the services? The answer is obvious. Yes. However, what if AT&T went beyond fixing the service problems that lag its operations and increased its network to a supernetwork and supercustomer service. Would more and more people jump over to AT&T? The answer most likely is no if we are to listen to what our T Mobile question was earlier in this writing! The absence of good network service, and call droppings “demotivated” subscribers from liking the AT&T service but will overabundance of network capabilities mean “overmotivated” subscribers? The answer is not that obvious but is No most likely. Both T Mobile and Sprint have a right and do brag of how WIMAX and HSPA+ 4G is similar to traveling a freeway with SO MANY lanes compared to the few lanes of 3G. That may be true but do they really get that many subscribers based on that? The sizzle of 4G sells but does the actual experience brings folks over? The sales numbers for both carriers shows. I spoke to a Sprint store rep once and the staff quotas are huge but the goals are NOT new activations. The corporate store staff are expected X number of “upgrades” monthly and I was told everyone DID make quota. The existing customers did move over to 4G devices in droves but did the new ones. Sprint announced a few months ago the huge number of its subscribers only to admit later in the announcement, the majority were “no contract.” That is no 4G. T Mobile’s case is not any better. Being the first 4G network to function was great but stops there. The absence of necessities or problems with them do demotivate the subscribers but doing a job over and above the call of duty is simply NICE. Nobody does anything based on it as we see in the case of T Mobile customer service.

One final side question remains, how do we increase sales. The networks are the best. The handsets are the best. The customer service is the best. The sales staff try very hard. What now? Where is the overwhelming response? One thing I can suggest is what I was taught about marketing. Most business people do not understand the difference between marketing and advertising. I was taught advertising is justified for keeping market share. AT&T and Verizon are right in spending whatever they spend on advertising to keep the huge market shares they possess. That is the proper way to go. How about Sprint and T Mobile in their quest for more market share by their 4G networks. Both spent a great deal on advertising and continue to. Does that really bring overwhelming response? It does bring much attention and we see it in awards (which have a little bit to do with public perception if we are to be fair!), the number of “inside” upgrades (in Sprint’s case) and no-contract activations (in Sprint’s case again). Advertising does work for maintaining market share. Nobody should argue with that but what about acquiring new market share. Superb customer service would not do it for T Mobile year-after-year. Super devices would not do it for T Mobile nor did their super advanced network. Their giant advertising efforts did not either. So what is to do? The best in marketing teach us when it comes to new things and gaining market share, etc. “word of mouth marketing” is the way to go. How is that absent in T Mobile and Sprint operations? If 4G is so great and really worth so much and one can increase sales and market share based on it, advertising it will not do. It WILL help but most likely not do it as we see from experience. Advertising will be great to keep what one has since it hits the existing subscribers so much closer to home than the other public. If 4G is so great, and does such great things, the word of mouth should spread ON ITS OWN of how great it is. Word of mouth can be started and managed but needs to run ON ITS OWN. The excited users of 4G networks and devices should be the ones going around (literally and via other means) telling others how great their tools are. That is the marketing key to gaining new market shares or what our T Mobile folks were curious of: More sales. Word of mouth marketing of how great the new services and products are results in “the other public” moving over to this side. What can be done in that direction. Ultimately, products and services need to be strategically placed in the right hands to spread the word. Some companies (I DID NOT SAY SPRINT. You did.) are very stingy while others are more liberal in sharing. No actual, personal and hands on experience means nothing to genuinely share. Enthusiasm is contagious as we are taught in sales. I sell by transferring my enthusiasm EVERYDAY to ALL of my customers. There is no sales pitch. There is not game of salesperson and buyer. It is a conversation between an excited (about some products and services. OOOOH!) and qualified sales professional and someone who will share the excitement and enthusiasm if can be TRANSFERRED to that person. If there is nothing to transfer through sales conversation, or writing or other media, how can word of mouth spread except artificially? Fake word of mouth is worthless and one may as well spent millions on advertising to save face and look good. Let the right people have access, support and USE of products and services and (yes it is risky and such is life.) if your stuff are good as you say, they just may be so excited to have something to pass on to the others. Think of how many good and bad things in our lives SPREAD just because of this one incident: if enthusiasm and excitement is generated, THEN can be shared. Adios. Have a nice day folks.

*This post belongs to this week’s edition of Wireless by Cush blog and published early in World of Cush also.

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