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March 5, 2010

2

The Ultimate Cost of Service

by Marge Laney

by Marge Laney

Seth Godin’s blog yesterday, Open Buying and Open Selling , made me think about retail customer service in a different way.  He writes, “When the customer does a lot of work for the seller, the seller can afford to sell it cheaper.”  And he ends his blog by saying; “The cost and method of selling (and buying) have a lot to do with the ultimate cost (and benefit).”  Sort of a “duh”, but the ideas are brilliant in their obviousness.

I posit the following to all brick and mortar retailers, big and small: It doesn’t matter whether you give your customers one on one personal service or require your customers to service themselves, either way you’re paying for it. 

If I go to a store where I don’t get much help and definitely not expert help I don’t expect to pay as much as I do at a full service store.  If in the case of a clothing store I’m left to schlep in and out of the dressing room trying to find something that fits without help, I don’t expect to pay as much as I would if the staff were attentive.  When I’m finished shopping I’m met with a self-service checkout or a long wait at a service desk, I expect the bill to reflect the inconvenience. 

On the other hand, if I visit a store where the staff is helpful and knowledgeable I expect to pay more for that attention and expertise.  If the associates in the clothing store show me the newest styles, service me in a dressing room by bringing me the correct sizes and complementary items, I expect to pay for that service as well.  And when I’m finished shopping and I need to have a garment altered and the associate lets me know that they can take care of it, I happily pay more for that convenience.

On my next shopping trip, who will I remember and where will I return?  I will probably remember the stores where I had the worst and the best experiences.  Where will I shop again?  Definitely not where I had a bad experience and was treated poorly or where my needs were ignored.  More than likely I will return to the store where I feel like I got what I paid for.

The next time you’re in a meeting and customer service is the topic, realize that whether you require that your customer’s service themselves, or you provide them with great customer service, either way it has a direct impact and ultimate cost to you on your bottom line in margin and customer loyalty.  So no matter how you figure it, you’re paying for it.

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2 Comments Post a comment
  1. Mar 9 2010

    Marge,
    Thanks for reminding us that service is part of the valuation equation, and you’re paying for the true “cost” of customer service one way or another.

    As you said, you expect to pay more for that attention and expertise of the staff. I absolutely agree. That’s why retailers have to make sure they’re delivering the experience they think they are. If not, that service gap is just as glaring as a big price gap.

    Thanks again for a great post.

    Doug Fleener

    Reply
  2. Sep 16 2010

    As you said, you expect to pay more for that attention and expertise of the staff. I absolutely agree. That’s why retailers have to make sure they’re delivering the experience they think they are. If not, that service gap is just as glaring as a big price gap.
    +1

    Reply

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