Serving to pay the bills

GOOD service is not just a useful marketing tool, with statistics from a national survey suggesting service also pays.

More than 41 per cent of the consumers surveyed said they would be prepared to pay a premium of up to 6 per cent for good service.

This is good news for retailers – particularly small business, the traditional heartland of personal service.

Interestingly enough, the survey, undertaken by local company Marketing Focus, reveals a narrowing gap between service levels at the major retailers and small businesses.

It’s a competitive edge small business can ill afford to lose.

Mystery Shopping International is a local business that carries out undercover surveys for retail outlets to assess a number of factors, including service.

Managing director Peter Rogers said big business in the retail sector had been very successful in implementing a business system with a focus on service delivery.

“In small business the business system is really the proprietor, and it boils down to how good he or she is,” he said.

“The larger retailers have probably been successful in designing service delivery systems and they have the resources to do so.”

In a large retail outlet a good service delivery system is a replacement for the personal drive of the owner.

The McDonald’s fast food chain is a very good example of the implication of a strong service delivery system across a global food retail chain.

There are several factors driving this trend, including a new group of individuals buying businesses following retrenchment.

“In the last decade we’ve had a lot of people retrenched and they’ve gone out and bought businesses,” Marketing Focus managing director Barry Urquhart said.

“What they haven’t realised is you have to be competent and upgrade everything regularly, and that includes service. The other stream is that big business has reaped the advantages of the government training levy.”

In the major department stores, training is built into the business model and is used as an incentive to attract top-line employees.

Many small businesses still consider staff training as an unnecessary expense when the focus is on the bottom-line.

Carole Walker is the principal of local company Service Audits and Market Research, and she said the research her business had undertaken highlighted a number of issues for retail service staff.

Less that 50 per cent of the staff surveyed in local stores even offered a greeting to customers, Ms Walker said.

“However, about 65 per cent used a positive tone of voice but they didn’t deliver the goods in other ways,” she said. “The conversion of customers to sales (in specialty stores) is quite low, it’s only about 15 to 17 per cent.”

At the same time as customer service levels are declining, research suggests the public is spending less and less time browsing for consumer items.

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