Organisations spend huge sums of money in market research to understand the customers. There is a whole industry involved in what is called customer analytics and profiling where customer behaviour is dissected in every possible way. The ultimate objective being, a more competitive offering which the customer wants. A friend of mine who used to manage a store once told me a story in this context and said how all these reports cannot substitute an hour of standing in the store.
In that context retail is the most interactive and customer insightful industry. One can get instant feedback and make corrections if they choose to.
This is during the early days of mobiles and one mobile company had tied up with a chain to give a hand set free as part of a contest. Needless to say the interest was high and I remember filling in the various forms I was eligible for hoping to get the phone. One such elderly lady like me was also hopeful of winning the phone, excepting that she expected or rather was waiting for the phone to be given to her. The store manager would be asked every time if the contest was over and when can she collect the phone! She claimed that God has told her that she was going to get the phone.
It was a Saturday and I was shopping at the store when the store manager informed me that someone else had won and the message had just come from the office and he was to display the winners name. He was hoping that he would not be around when the elderly customer came to the store and found she was not the winner. Just as he was telling me this, an elderly lady walked up to him and asked when she can get the phone!
As diplomatically as possible, the manager explained that someone else had won and better luck next time. The customer suddenly became abusive and hurled the choicest of abuses and not content with that made a gesture of spitting to indicate her disgust. I watching this and almost expected the security to lead the customer out.
To my surprise and appreciation the manager walked up to the lady and calmly apologized for disappointing her and gently asked why she was so upset. It was after all only a contest. The lady calmed down, broke down and told her story; Her husband was very critically ill and they had applied for a landline phone which was getting delayed. When she heard of this contest, it was like a sign from God and she had started believing that if she won the phone, her husband would get well as they could summon medical help whenever they wanted.
I was very touched by the story and wondered how often we react to anger with anger, when it actually hides sorrow and fear. Kudos to the manager for understanding customers with more insight than any report can provide.
Retail trivia – Almost every contest works on a probability theory and the prizes are planned for assuming only a certain number of people participating. Also, they are usually a method for data collection, to be used for future marketing efforts. Next time you fill in a coupon remember that apart from the prize you could also get a lot of calls and mails!!
-- This article is part of a series, I wrote for "The Hindu, Retail Plus".
Saturday, March 21, 2009
The lure of a Freebie!
FREE! What a powerful word. Among the most used, recognized and acted upon words in the world. The power of free!
One really does not know when the practice of freebies started. But suffice to say that this has become one of the more powerful promotion tools for any brand owner as also retailers. Many a times the consumer makes a final choice on what is being given Free. Many brands have created fads and cults with their freebies and a good example is the craze for Tazzos which was triggered by a potato wafer brand.
I have seen many situations where the power of free is on display. Children insisting that their parents buy something because a toy is free with it, ladies purchasing a personal product because an utility item is free and so on. However, the power of free was best demonstrated when I witnessed the following incident.
It was yet another opening of a swank, new modern supermarket. Offers and more offers made customers queue up and wait in the sun. Once the store was ‘inaugurated’ the mad rush began. I was a part of this crowd and suffice to say that I was carried into the store with minimal effort, thanks to my co-shoppers excitement. Soon my trolley was full and I rushed to pay and get out before getting caught behind a long line.
I emerged victoriously clutching my bill which said that there were so many interesting Freebies I had to collect. As I waited in the counter where they were handing over these free products I noticed a very upset middle aged lady. She was smartly dressed and was addressing the counter staff in excellent English and not sparing them. After observing the scene for some time I could surmise that she had purchased for a particular value which was almost twice the limit for a promotion and was demanding an additional freebie. Given the intensity of the debate, I got interested in case I had missed out on this offer. The staff were explaining that the free was not only based on the value of purchase but should also include some specific product.
I guess after some time the staff thought that it is better to give one more freebie and avoid the scene as also the ire of customers who were waiting for their turn. I was curiously waiting to see the freebie, which was the triumphant result of the lady’s efforts. To be frank, I was a bit disappointed when the staff handed over a medium sized ordinary looking plastic bucket, to the lady.
The lady picked up the bucket, thanked the person and turned to imperiously hand over the bucket to a smart uniformed person, who I noticed was standing in the side, saying ‘Keep it in the car’. This particular incident intrigued me more than the reality of someone insisting and getting a bucket as free. With growing amazement I watched the lady march towards a gleaming black, imported luxury sedan and get into the car. The driver dutifully placed the bucket in the boot and off they went!
Retail trivia – Many a times we would have asked that the price of the freebie adjusted as a discount and we are told that the discount offered would be a fraction of the price of such a freebie. Its might be puzzling as to why we don’t get the full value as a discount. The reason is very simple. These freebies are sourced in bulk and purchased at a fraction of their stated price. Hence, only that amount can be given as a discount if any customer insists on it. Its better to take the freebie and gift it to someone than lose out on the value by insisting on a discount!
-- This article is part of a series, I wrote for "The Hindu, Retail Plus".
One really does not know when the practice of freebies started. But suffice to say that this has become one of the more powerful promotion tools for any brand owner as also retailers. Many a times the consumer makes a final choice on what is being given Free. Many brands have created fads and cults with their freebies and a good example is the craze for Tazzos which was triggered by a potato wafer brand.
I have seen many situations where the power of free is on display. Children insisting that their parents buy something because a toy is free with it, ladies purchasing a personal product because an utility item is free and so on. However, the power of free was best demonstrated when I witnessed the following incident.
It was yet another opening of a swank, new modern supermarket. Offers and more offers made customers queue up and wait in the sun. Once the store was ‘inaugurated’ the mad rush began. I was a part of this crowd and suffice to say that I was carried into the store with minimal effort, thanks to my co-shoppers excitement. Soon my trolley was full and I rushed to pay and get out before getting caught behind a long line.
I emerged victoriously clutching my bill which said that there were so many interesting Freebies I had to collect. As I waited in the counter where they were handing over these free products I noticed a very upset middle aged lady. She was smartly dressed and was addressing the counter staff in excellent English and not sparing them. After observing the scene for some time I could surmise that she had purchased for a particular value which was almost twice the limit for a promotion and was demanding an additional freebie. Given the intensity of the debate, I got interested in case I had missed out on this offer. The staff were explaining that the free was not only based on the value of purchase but should also include some specific product.
I guess after some time the staff thought that it is better to give one more freebie and avoid the scene as also the ire of customers who were waiting for their turn. I was curiously waiting to see the freebie, which was the triumphant result of the lady’s efforts. To be frank, I was a bit disappointed when the staff handed over a medium sized ordinary looking plastic bucket, to the lady.
The lady picked up the bucket, thanked the person and turned to imperiously hand over the bucket to a smart uniformed person, who I noticed was standing in the side, saying ‘Keep it in the car’. This particular incident intrigued me more than the reality of someone insisting and getting a bucket as free. With growing amazement I watched the lady march towards a gleaming black, imported luxury sedan and get into the car. The driver dutifully placed the bucket in the boot and off they went!
Retail trivia – Many a times we would have asked that the price of the freebie adjusted as a discount and we are told that the discount offered would be a fraction of the price of such a freebie. Its might be puzzling as to why we don’t get the full value as a discount. The reason is very simple. These freebies are sourced in bulk and purchased at a fraction of their stated price. Hence, only that amount can be given as a discount if any customer insists on it. Its better to take the freebie and gift it to someone than lose out on the value by insisting on a discount!
-- This article is part of a series, I wrote for "The Hindu, Retail Plus".
Getting better service
We all as customers expect very good customer service. The question is, how many of us deserve good customer service?
Internationally we are known to be rude, aggressive, tip poorly, treat staff like personal servants and then complain about poor service.
I had a friend who was an air hostess with Air India and once we had a debate about why Indian fliers were treated poorly while foreigners would be helped, smiled at and so on. She stumped with a single line. She said “Without fail most foreigners would say please and thank you, while most Indian fliers would demand whatever they wanted”. That set me thinking and I started observing if we as a consumer class are really so bad.
Retail chains were a good place to observe this phenomenon, especially since they talk so much about customer service and customer delight. I noticed that most chains have instructed and trained their staff to smile, wish ask if any help is required. Most staff did smile and wish, while most customers would either look past them or be mildly irritated.
One day I commented to one such staff member that this must be one of the easier parts of their job. Smile and wish. She said “No sir, this is actually not so easy. A few customers smile back at us. Most just ignore us. I feel very bad when that happens.” The staff became comfortable enough to share a few thoughts and it gave me a very different perspective.
These people come from poor economical backgrounds. Most of them use the bus or cycle to get to work. Their homes are not exactly the epitome of comfort and luxury. On top of all that they also have their personal problems and issues. In that context being cheerful, smiling and wishing is an effort. Doing it again and again when being ignored by many is an even bigger effort. Adding insult to injury are some misguided youngsters who use this as an excuse to make funny comments or remarks.
I resolved to remember this and make it a point to wish and smile back at staff, say please and thank you every time someone does a service. I am just being selfish. I am ensuring that this service staffs do not get so demoralized that they stop giving good service because no one acknowledges it and one day I stop getting good service.
A retail trivia – There is a customer service guideline called the 5 Feet rule. This was propounded by Sam Walton of Walmart and most retailers follow some variation of this. Every customer facing staff is required to smile and wish customers who come within 5 feet. How do they measure 5 feet? Simple, the floor tiles have a defined size and one needs to wish everyone within a particular number of tiles.
Internationally we are known to be rude, aggressive, tip poorly, treat staff like personal servants and then complain about poor service.
I had a friend who was an air hostess with Air India and once we had a debate about why Indian fliers were treated poorly while foreigners would be helped, smiled at and so on. She stumped with a single line. She said “Without fail most foreigners would say please and thank you, while most Indian fliers would demand whatever they wanted”. That set me thinking and I started observing if we as a consumer class are really so bad.
Retail chains were a good place to observe this phenomenon, especially since they talk so much about customer service and customer delight. I noticed that most chains have instructed and trained their staff to smile, wish ask if any help is required. Most staff did smile and wish, while most customers would either look past them or be mildly irritated.
One day I commented to one such staff member that this must be one of the easier parts of their job. Smile and wish. She said “No sir, this is actually not so easy. A few customers smile back at us. Most just ignore us. I feel very bad when that happens.” The staff became comfortable enough to share a few thoughts and it gave me a very different perspective.
These people come from poor economical backgrounds. Most of them use the bus or cycle to get to work. Their homes are not exactly the epitome of comfort and luxury. On top of all that they also have their personal problems and issues. In that context being cheerful, smiling and wishing is an effort. Doing it again and again when being ignored by many is an even bigger effort. Adding insult to injury are some misguided youngsters who use this as an excuse to make funny comments or remarks.
I resolved to remember this and make it a point to wish and smile back at staff, say please and thank you every time someone does a service. I am just being selfish. I am ensuring that this service staffs do not get so demoralized that they stop giving good service because no one acknowledges it and one day I stop getting good service.
A retail trivia – There is a customer service guideline called the 5 Feet rule. This was propounded by Sam Walton of Walmart and most retailers follow some variation of this. Every customer facing staff is required to smile and wish customers who come within 5 feet. How do they measure 5 feet? Simple, the floor tiles have a defined size and one needs to wish everyone within a particular number of tiles.
-- This article is part of a series, I wrote for "The Hindu, Retail Plus".
Power of change
Most of us would have definitely had a situation where we could not complete a purchase because we had no change or had to take some meaningless toffees instead of the change. Having or getting change has not been an issue as wide spread in the fast few years. However in the late 90’s this was a major issue and has given lots of headaches to retailers, especially the new organized chain stores.
During that period a regular customer who used to frequent one such chain store used to expect change as a given. Most cases she would get the change and a few times the staff would ask if she had change and she would grumble and search and try to find change. One day when the staff asked if she had change, customer suddenly lost her temper and started shouting. The others in the line were getting quite restive and it looked like there would soon be a major scene.
Just then another staff who seemed like the store manager came up to the lady and said that she would help. After patiently listening to the lady she had a long talk to this lady explaining about why there is a problem with change and what all they are doing to address this. I was watching to see if the manager’s talk would resolve the problem. Obviously she was quite persuasive and the customer calmed down, found some change, billed her purchases and left.
I congratulated the manager on her customer service and went away. A few weeks later the manager spotted me at the store and walked up to share an astonishing end to this story. The customer had returned the next day with lots of change bundled in her kerchief and gave it to the manager and said “I never realized how much of change I end up having in my house, till you explained how difficult it was to get change. So I thought let me give it to you and help”. I left the store impressed with the manager and with the customer who helped herself and other customers with her small effort.
I am sure that many of us would discover lots of change at our homes if we had a look around. Maybe we should also do what that customer did and give it to our regular store. Or at least carry it with us. Imagine how much money would be lying unused as change!!
A retail trivia – These chains as part of their efforts to get adequate change would approach several innovative sources apart from their banks, the Tirupati temple being one of them. Based on what the manager was telling I gathered that staff would go every week to Tirupati and return with bags of coin. Another interesting source was the various beggar groups. Yes, were amongst the main suppliers of change and made money giving change. They would give change worth Rs. 97 or 98 and get Rs. 100 in return.
-- This article is a part of a series, I wrote for "The Hindu, Retail Plus".
During that period a regular customer who used to frequent one such chain store used to expect change as a given. Most cases she would get the change and a few times the staff would ask if she had change and she would grumble and search and try to find change. One day when the staff asked if she had change, customer suddenly lost her temper and started shouting. The others in the line were getting quite restive and it looked like there would soon be a major scene.
Just then another staff who seemed like the store manager came up to the lady and said that she would help. After patiently listening to the lady she had a long talk to this lady explaining about why there is a problem with change and what all they are doing to address this. I was watching to see if the manager’s talk would resolve the problem. Obviously she was quite persuasive and the customer calmed down, found some change, billed her purchases and left.
I congratulated the manager on her customer service and went away. A few weeks later the manager spotted me at the store and walked up to share an astonishing end to this story. The customer had returned the next day with lots of change bundled in her kerchief and gave it to the manager and said “I never realized how much of change I end up having in my house, till you explained how difficult it was to get change. So I thought let me give it to you and help”. I left the store impressed with the manager and with the customer who helped herself and other customers with her small effort.
I am sure that many of us would discover lots of change at our homes if we had a look around. Maybe we should also do what that customer did and give it to our regular store. Or at least carry it with us. Imagine how much money would be lying unused as change!!
A retail trivia – These chains as part of their efforts to get adequate change would approach several innovative sources apart from their banks, the Tirupati temple being one of them. Based on what the manager was telling I gathered that staff would go every week to Tirupati and return with bags of coin. Another interesting source was the various beggar groups. Yes, were amongst the main suppliers of change and made money giving change. They would give change worth Rs. 97 or 98 and get Rs. 100 in return.
-- This article is a part of a series, I wrote for "The Hindu, Retail Plus".
Small format wins
This was a piece I wrote in April 2006 when the "FDI in retail" debate was at it's peak, about how Kirana stores would always thrive. Is this relevant even now after 3 years?
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In the Indian Retail Scenario, the small format neighborhood store will continue to flourish and grow, midst all the large format discounters. This has been so in most developed countries also. In fact, this development that will sustain any cash and carry operator as this segment next to the hotels is core to any cash and carry operator.
This is because of some very specific factors in the Indian socio economic and physical environment. These are –
Real estate costs and location – Large format discount food formats would have to look at operating in the suburbs, simply because of the rental structure in a CBD. This has implications in terms of a trade off between location and size, which then affects range. Of course formats which leverage the higher margins of general merchandise and offer food as a marginal range might be able to trade off and survive in city centre locations. But for how long is the question in the face of rising real estate costs.
Gap in supply Vs demand of real estate – Linked to the above factor is the gap in supply vs. demand in real estate. This is bound to put pressure on any retail operator with regards to the cost structure. In this context a pure discount led food format, especially a large store would be very difficult to sustain in a sustained manner.
Car ownership – Even with the explosive growth seen in recent year’s car ownership remains much lower than in the west. Take the case of dual car ownership and the situation is even bleaker. Driving to a suburban location, while juggling various other chores and duties would always be a dilemma. Especially, if there are small format stores offering good value in the immediate neighborhood.
Emerging lifestyle – 24/7 is a lifestyle most working couples are embracing if not by design then by default due to the pressures of work. This has redefined the priorities and preferences in a significant manner in most cities. Free time is precious and people choose to spend it in recreation and entertainment instead of engaging in activities that are boring, routine and stressful. With the initial novelty of a supermarket store having worn off, the primary value expected from these operators is one of convenience. It is a trade off between convenience and comfort vs. savings that will determine the choice of going to a large format vs. neighborhood store.
New OPEX cost!!!
Oh and I forgot!!!!
During, one store launch we had to reimburse the cost of a windscreen for a customer's car. Because, a large pumpkin was placed on top of the large format banner to ward off the evil eye that this 'attractive' communication might garner and attract to the entire building. The famous sea breeze of Chennai led to the banner fluttering and sent this pumpkin crashing down!
Since then, I wonder whether the pumpkins help or not!
During, one store launch we had to reimburse the cost of a windscreen for a customer's car. Because, a large pumpkin was placed on top of the large format banner to ward off the evil eye that this 'attractive' communication might garner and attract to the entire building. The famous sea breeze of Chennai led to the banner fluttering and sent this pumpkin crashing down!
Since then, I wonder whether the pumpkins help or not!
Where is the banner/ Balloon rice!!
In the early days of corporate retail, with limited budgets I had to think of every kind of gimmick to stretch the marketing budget. One innovation (Thanks to a Hindi Pop Concert!!) was the large format drop down banner and the large gas balloons. This became such an identification sign that, customers would walk in asking for the Banner or Balloon rice!!
P.S. - Thanks to a concert in the indoor stadium at Chennai, where large format drop downs were noticed by my team mate Usha and myself, this became SOP for launches for some time, leading to the term - Banner rice!
P.S.2 - The large gas balloons were as effective as dangerous. One had to get all kinds of permission and be very careful when using them. In spite of all this care, a balloon flew off during a launch. Last reported; some flights were being diverted to Chennai or Madras in those day! Because, the passengers wanted to purchase the balloon rice!!!!
Friday, March 20, 2009
One choose's what one see's!!!! MATRIX ???
Over the past few years I have carried my camera and captures various images as and when the mood or thought strikes me.... Some of these pictures have revealed amazing insights... If one sees it, the perspective is clear. Else, its another picture!!! None of these have been changed or interfered with, using software, apart from inserting my initials and converting them to a PDF format. Please do comment on your perspective, when you see these pictures.
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