Friday, July 15, 2011

Customer Service - still going!

If the press are to be believed, the current downturn in Australian retail sales is either because of the confusion being created about the new carbon tax or because of come other reason beyond the control of the retailers.


The main reasons why people don't buy are pretty simple:
  1. They don't know that the goods or services are available
  2. The goods or services that are available are not those for which they are looking and/or need
  3. The goods or services are not considered good value for money
  4. The service (or lack thereof) provided by the seller is such that the customer considers it "just too hard" to buy
Yes, economic confidence affects the way people think and it certainly affects their buying patterns, but what this generally means is that people become more discriminating as to what they buy and from whom they buy it. And, yes, the current debate on the carbon tax (accompanied by much misinformation and deliberate attempts to mislead by appealing to fear) certainly has lowered consumer confidence because of the way in which the Australian economy is being talked down. But the reason why retailers are suffering lies primarily with the retailers themselves.

Ken Varga ( has some interesting things to say about this issue - perhaps even to some of the affected retailers.

I believe that a key problem is that so many of our major retailers have moved away from their core business. Where once stores like Myers and David Jones employed their own staff, trained those staff, and ensured that their staff knew about far more than just the small area in which they worked, today this is not the case. Our retailers seem to have moved to a situation in which various brands lease parts of the store and each is interested only in promoting their brands. In addition, because employment costs are seen as an expense rather than an investment, the stores have moved to a minimalist position on staffing levels and pay those they do employ the lowest possible wages they can get away with. The stores show little or no loyalty to staff (apart from the middle to senior managers and executives) so why should the staff show loyalty to them?

Good customer service requires engaged staff. To get staff committed to what they are doing, to their co-workers, and to their organisation, requires a vastly different type of leadership from that which is currently being provided. Unless an organisation is consciously set up to create an environment in which employees at all levels have a high probability of being successful, then customer service (and profitability) become a random end variable - which is, I guess, exactly where many organisations are today.

More information about Doug Long at

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