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Article CX Execution

Learning From Big Fails: How a Discount Retailer and High End Fashion Co Both Failed the Same Way

We're adding a new series to our portal: Big Fails

Customer excellence is our mantra and we're always on the lookout for great examples of companies achieving competitive advantage via customer centricity.  But we seem to run across more bad examples of companies undermining their market position by neglecting customer experience.  Rather than simply writing a whiny complaint post everytime, we'd rather use these experiences as a vehicle to highlight to our audiences how these companies are missing opportunities to build strength through customer experience.

Two extremes of the retail spectrum. Same story.

This month we’re in Australia meeting with companies in the local market.

And interacting with retail operations at the low and high end of the spectrum. We've experienced two stunningly poor customer experiences that reflect a disdain for customers — not just a neglect of customers.

At the Aldi grocery store, a well known global discount chain that delivers the best prices in every region it operates in. But this week saw extraordinarily rude behavior from a checkout staffer — who answered a genuine question from a customer with a sarcastic attempt to make the customer feel stupid. This one was truly stunning.

At the checkout stand, as a large number of grocery items were being rung up, the cashier suddenly stopped and just stared at our faces. So we asked what was wrong. He said you have to bag the stuff yourself. One of us asked: you don’t bag it for us? He said: if you want to pay more, we can bag it for you. We asked how much more. Then he replied: We’ll have to change our business model, raise our prices, then we can start bagging for all our customers.

We were stunned. The staff member wasn’t being funny — he was acting out aggression. That level of deadpan sarcasm at a customer’s expense would be considered unacceptable by any company. So why is this employee so poorly motivated and trained that he would treat customer with such disdain?

At the other extreme, we encountered poor processes and service at the high end retailer Jimmy Choo. An error by staff in holding a much sought after item, was followed by poor handling of the mistake and ultimately a customer feeling unvalued and treated dismissively.

Again the experience was stunningly poor. First a salesperson who didn’t know the product line and indicating a product was out of stock while it was in plain view on the shelf. Then, when the item was requested to be put on hold for a couple of days, an error was made and the item was taken off hold early and put on hold for another customer. What was stunning was the unwillingness to remedy the error and sell the bag to the first customer. The staff was unyielding and when we complained the answer back was dismissive: ‘You have a right to your opinion.’

Key questions come to light:

1. How long can brands rely on a core strength to get away with poor customer experience? Whether it’s Aldi at the low end relying on its superior prices or Jimmy Choo relying on its product strength, the question remains the same.

The answer lies in competition and competitive advantage. Ignoring customer experience is a slippery slope — while you can seem securely planted in a market position when that position comes under threat, customer experience can be your best friend or worst enemy.
As other brands continue to build product or pricing strength, will Jimmy Choo and Aldi be able to allow customer experience to suffer so badly?

Many companies create a vulnerability by ignoring customer experience and get away with for a long time. But when it comes time to change it, the entrenched culture and lack of systems / processes hinder a quick transformation and more agile customer centric competitors quickly take over leadership positions.

2. Why is there so much inconsistency in how brands operate worldwide?

Brand is the hardest asset to build and globally inconsistency is a major weakness that leaves many companies exposed. That begs the question: why don’t global brands put a value on consistency across international customer experience?

Some argue that it is difficult to manage consistency, but we disagree having successfully overcome the challenges with strong processes, consistent training and careful hiring of leadership in our own businesses. Ultimately, blame falls to a lack of intent or commitment on the part of global management. That in turn begs the question, why is there a lack of understanding of the value of a globally consistent brand.

3. The scourge of dismissiveness to customer complaints

It’s something we see so often that it ranks as one of the biggest weakness in how companies deal with customers. You’ve heard the lines before: “No one has ever complained before.” “You have the right to your opinion.” There are many more.

The key point is the failure to address the core need that customers have — to feel that their complaint is being recognized as a genuine problem. Even if a solution is not immediately possible, at the minimum not being dismissive is always the best practice. So why do so many companies consistently get it wrong? We chalk it up to poor training of employees, who think their job is to defend the company, not the brand. The brand rests in the eyes of the customer, so being dismissive is exactly the wrong approach.


Jan 8, 2015  

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It's impossible for companies to focus on the 'easy' market segments (ie. non millenials) and get comfortable with a less than competitive product or service offering. 

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