Thursday, September 13, 2012

Manage Employee & Customer Turnover

At age 92, Rose Syracuse ended her 73-year career at the flagship Macy’s. Although there may be broad differences between operations in your retail store and what Macy’s puffery calls the “World’s Largest Department Store,” note of Ms. Syracuse’s retirement is an opportunity to appreciate the importance of employee turnover and its relationship to customer turnover.
     Retailing has higher employee turnover than most other types of business. Some turnover in any organization is good. By bringing in new ideas, turnover heads off inbreeding and stagnation. High employee turnover raises customer turnover, though, via its effect on what is called Customer Need Knowledge (CNK).
     CNK is defined by researchers at Germany’s University of Mannheim and University of Bochum as the extent to which a frontline employee in a store—the one who serves customers face-to-face—accurately and promptly identifies each customer’s needs and desires. The researchers found that when the CNK of employees in a store is higher, customers tend to be more satisfied and to say they’ve gotten better value from their purchases. An employee with high CNK pays close attention to each customer they’re with and is concerned with the problems of that customer. The result is lower customer turnover.
     Now here is where the tale of Rose Syracuse may be less instructive. According to the New York Daily News, Ms. Syracuse spent her career at back-office jobs, not the salesperson-to-shopper interactions CNK is about. Therefore, I’ll coin the term Store Need Knowledge (SNK) to refer to the advantages long-term employees can offer in knowing how things operate. For the last three years of her employment, Ms. Syracuse helped organize the Macy’s parades and other special events, using her knowledge of many previous occasions. Whether in back office or front, longer-term employees have more opportunity to learn what a store’s target markets are like and will like.
     Use the talents of your senior staff. Otherwise, they will burn out. Organizational psychologists see the hallmarks of burnout as feelings of exhaustion, suspiciousness about the intentions of others, and doubts about the effectiveness of one’s own efforts on the job. Conscientious employees are at especially high risk for burnout. They end up resigning themselves to doing lower quality work than they believe they’re capable of doing. They’ll perhaps resign from their employment.
     You don’t want to lose the contributions of your hard-working employees. Protect your business by heading off burnout in your staff.

For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more: 
Staff Your Store for Customer Need Knowledge 
Burn Out Resignation of Skilled Staff

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