Sunday, August 18, 2013

Prevail Using Customer Need Knowledge

Small to midsize retailers can find themselves competing with large retailers for the shopper’s dollars. A powerful tool in that competition is your knowledge of individual customers’ needs and preferences.
     A Yesmail survey project, conducted in conjunction with business benchmarking analysts Gleanster, concluded that there were the following particular weaknesses in the Customer Need Knowledge (CNK) among larger retailers:
  • The mix of channels the individual customer prefers to use to get information about items and to make purchases: Store visits? Store website? Social media? Telephone? Catalogs and circulars? Other? 
  • Composition and characteristics of the customer’s household. Number of people? Gender, age, and shopping preferences of each member? 
  • Interests of the shopper herself or himself. 
     Researchers at Germany’s University of Mannheim and University of Bochum explored the relationships of:
  • Customer need knowledge (CNK), defined 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 
  • Customers’ satisfaction with their experiences with the frontline employee 
  • Customer judgments of value in what they purchased from the frontline employee 
     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. Employee with high CNK pay close attention to each customer they’re with and are visibly concerned with the problems of that customer.
     This isn’t surprising. Still, it’s nice to have experimental validation. The researchers did go beyond this to suggest two ways to increase the CNK of your store’s employees:
  • Manage employee turnover. A top facilitator of CNK was the customer having dealt with the employee over a period of time. Longer-term employees get more opportunity to learn what a store’s target markets are like and will like. 
  • Identify and correct for the ways in which your target markets are different from your sales staff. CNK is less when there’s a large age discrepancy between the salesperson and that salesperson’s typical customers. This argues for hiring employees who are similar in age and other characteristics to your typical customers. You’ll want to be sure those employees also can learn retailing skills and that you obey antidiscrimination employment law. 
     A cautionary note: The Yesmail survey depended on self-report by the large retailers. They think they recognize their CNK weaknesses. Do you recognize yours?

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

Click below for more: 
Pay Close Attention to Each Customer’s Needs 
Announce Commonalities with Shoppers 
Make Your Next Best Offer

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