Editorial / Research and Intelligence

Australian Retailers Drop the Ball on Customer Service

Australian retailers drop the ball on customer service

Results from the American Express survey on customer service reveal how Australian retailers are getting the most fundamental part of their business wrong. How does your business stack up?

There is something rotten in the state of Australian retail.

In recent times, bricks-and-mortar retailers across the country have cried foul, blaming their poor performance on everything from unfair GST legislation, high rental costs, outdated penalty rates and the very presence of online retail.

Of course, not a single one of these retailers has displayed the gumption required to put their hand up and say, “Perhaps the problem lies with our own approach to customer service”.

In fact, these retailers will be the first to claim that their levels of service are, in fact, peerless; that they will always go that extra mile for any customer on any sale, no matter the size or importance. I can only suppose that honest self-appraisal is yet to be listed as a requirement for applicants to senior management roles of large businesses, regardless of the lessons learned from the events leading to the GFC.

That isn’t to say Australian retailer managers have anything close to the ability to cause another GFC, but they do have the future viability of their own businesses in the palm of their hands. Unfortunately, as the results from the latest American Express Global Customer Service Barometer reveal, retailers seem content to continue sitting on their hands, refusing to do anything more than shift the blame.

According to the survey, a full third of local consumers believe businesses are paying even less attention to customer service in the current economic climate than they were one year ago. In fact, of the 10 countries identified in the survey, Australians are the least happy with the service they receive, barring the French.

The report also shows that two-thirds of Australians will abandon a sale due to poor customer service, while more than half will spend more with a company that is able to provide good service.

Managing Director of American Express Australia Lisa Vehrenkamp spoke with Fairfax about the results, saying that the report should be a wake-up call for Australian businesses.

Vehrenkamp highlighted the fact that businesses are currently taking the easy way out in their cost-cutting endeavours by reducing staff training – a move which is more likely to cause further damage to their business. And just because customers aren’t necessarily providing this feedback to those businesses upfront doesn’t mean there isn’t a problem with their service.

In a similar report released late last year, Australians were revealed to be adept at complaining, yet displayed an unwillingness to complain directly to the business at the root of their concern.

“They are less likely to call it out in the moment,” said Vehrenkamp, “but are more likely to walk out and tell friends about their terrible experience.”

So tell me, how exactly will halving penalty rates improve a retailer’s ability to provide good customer service? If a retail business ‘can’t afford’ to have adequate staff on the sales floor to meet the needs of their customers, is the internet to blame when they shop online? Does a bear… you know what? Life is too short for stupid questions.

Retailers, the stakes are high. This latest report shows that your potential customer base is willing to spend up to 12 percent more if you can prove to them that their business is valued. Across the industry, that could result in millions of dollars injected back into this floundering industry.

Online retailers have no trouble spending on training staff to handle customer service issues of all shapes and forms via email, telephone and live chat software. Sure, this survey doesn’t differentiate between these different types of businesses – Australians are generally unhappy with all of them – but what we do know is that the online players are usually the first port of call for consumers to turn to when they are unhappy with the service they get in-store. Let me tell you; the online retailers aren’t complaining about it.

Suggestions:

If a retailer’s dedication to providing for the customer isn’t priority one (and that of every other employee in your business), perhaps consider a different industry.

Secondly, it pays to consider that a retail business doesn’t even need a strong online sales presence in order to cut costs. Training offsite customer service representatives to interact with people via email, phone or live chat may well help to streamline this side of your business. Let the quality of service provided by these staff serve as an example for any under-performers on the sales floor.

Next, an ‘every sale is the last’ attitude is crucial in today’s retail environment. If everyone in a retail organisation treats every customer and every sale like the business depends on it, consumers will respond and sales will increase.

Finally, if a bricks-and-mortar store isn’t performing and the staff aren’t the embodiment of the brand’s service values, then you are truly better off closing down and reinvesting those resources online.

There is no ‘competing’ with online by hoping for penalty rate reductions, wage cuts or extended hours. Simply ensure there’s an online offering to catch the sales that happen to occur when the bricks-and-mortar staff are at rest.

4 Comments

  • Interestingly Myers just announced a cut of 100 jobs mainly in IT and HR. In their statement they said that customer service jobs would be “quarantined” I guess that means no cuts. They also announced guidance of a 15% profit drop from 2011.

    It is pretty apparent to anyone who has been shopping in the USA retail stores that they have a different view of customer service. But the reality is also that our labour rates, overtime penalties and work practices make it hard to provide the level of service that could be expected. So in that regard I think that there is real issues with outdated penalty rates. So I don’t think you should exclude the impact.

    However employees of those large retailers have to accept some of the blame for customer service levels. When 3 or 4 assistants in a large retail outlet think it is more important to stand in a group and have a chat rather than serving a customer then it is not the pay rate to blame. It might be lack of training and supervision or just plain bloody minded lack of interest. Unfortunately you can see the attitude regularly and it just makes you feel like you should not be bothering them. So guess what happens next….

    John

    Reply
    • prancer
    • 12th July

    If consumers hadnt been trained by the likes of ACA and other intelligence insulting programs to act in an insulting and arrogant manner, demanding the impossible and un-realistic, perhaps retailers would provide genuine customer service.

    Consumers, along with the ACCC, are raping retailers AND their suppliers with their attitude and “its not my fault” perceptions.

    Unfortunately as an employer of a large retailer, I see first hand that the majority of consumers have little, if no respect for service staff. The mentality of the average consumer is a disgrace to humanity, and i defend the notion that service is not what it once was, because the average consumer does not deserve it. There is a minority that receive amazing service, because they are genuine customers with some sense of compassion and common sense.

    Online consumers are worse, many cannot perceive reality, or have the inability to read, and these are another breed of the impossible consumer.

    Consumers expectations have changed, if you cannot get service… have you ever thought of asking? If you dont like the service you have received, have you yourself looked in the mirror?

    Start treating retailers with a bit of respect, take responsibility for your own stupid actions, and you may get some genuine service. Retailers will provide you with service, when you deserve it.

    Reply
    • Wow that surprised me. @Prancer are you an employee or employer in retail? I think that your whole diatribe basically sums up the problems with the Australian retail industry. There is an old adage in business “the customer is always right”. Sorry but they are the ones that decide and have the only vote and they vote with the wallet and their feet.

      Reply
    • Tony
    • 13th July

    Are you for real Prancer?
    If you are an “employee” of a large retailer (I imagine you were auto-corrected to write employer instead- otherwise it is you who cannot read), I think you are Exhibit A for the prosecution demonstrating the attitude that delivered the AMEX survey results and this article in the first place.
    I don’t watch ACA by the way and I do treat retailers with respect- but you know what buddy? True Respect has to be earned. If you just expect it? Well, I feel sorry for you employer, if their customer-facing staff have that attitude to customers

    Reply

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