The single concept that has dominated management thinking for the past decade is the brand. How do you build it? What makes it strong? How do you make it work for you? In reality, neither smart logos nor a clever tagline can build a successful brand. That would be like a great uniform making a great baseball player.
A store's brand is an operational promise to the customer. It is the set of store interactions that defines the customer experience, good or bad. When a customer comes to your store and is delighted by her experience, that is your store brand at work. From here on out, we call this the "operational brand."
With increasing competition from different retail formats, a superior operational brand may be the only way to ultimately win. The outcomes of a winning operational brand are increased numbers of shopping trips for your customers, greater wallet share and extensive word-of-mouth referrals. So how does one create this thriving operational brand that perfectly hits the sweet spot of consumers? With the following four-step process: listen, reflect, act, check.
Step 1: Listen
As in, listen to the customer. This should be done in a very particular way.
There is a set of customer variables that drives the ideal customer interaction with your store. We are looking for the top 10 to 12. Each variable should capture some unique and important aspect of the customer experience, and each should be measurable. To make the list, use your own experience as a manager, scan customer comment cards or ask your customers, "Why do you shop at the stores you like?" Not just natural products stores, mind you; there is a lot to be learned from Best Buy and other national players.
The list might include category selection, product availability, parking availability, employee friendliness, employee knowledge, product safety, product quality, average prices, sale prices, store environment and checkout wait time.
Once this list is generated, we need three more pieces of information for each variable: importance, expectation and perceived current performance.
Say that Neville's Naturals has identified three variables that are important to customers: product safety, parking and employee friendliness. Neville then develops a short customer survey that workers with clipboards administer in the store in exchange for a small incentive such as a coupon or a piece of chocolate.
Remember, each variable should be measurable, if only by a 1-10 rating scale. "Expectation" describes what a customer expects to find at every visit if he is to be a loyal customer. After surveying 50 customers, Neville puts together the results into a scorecard (see Figure 1 below).
This scorecard tells the whole story of what Neville's Naturals needs to do to delight customers and create dramatic business results.
Is the two-minute expectation for parking reasonable? Is the score of employee friendliness exactly right? It really doesn't matter. What matters is that these results are meaningful in terms of the potential to improve the customer experience.
Step 2: Reflect
This kind of operational branding effort (or any initiative to improve organizational quality) works best when led by senior management and "owned" by everyone else within the organization.
So now Neville sits down with his management team and talks about what must be done. He tells them that the store has begun a new operational branding process and that actual customers of the store have issued a report card. He may even emphasize that failing on this scorecard means that a person who might otherwise be living a healthy lifestyle, courtesy of Neville's, is now forced to wallow in conventional food at the Super Hefty Mart down the street. Finally, he states that the scorecard is everyone's responsibility, regardless of department or status, and that he is expecting their cooperation and creativity in moving things forward.
The team tears into the scorecard findings. Since there is a measurable gap in the most important variable (product safety), they start there. Neville's grocery manager, Sheila, suggests maybe it's time to formalize the store's purchasing policy and post it in the store. Someone else observes that this purchasing policy should not only list what the store doesn't carry but also what it seeks out and emphasizes.
The team decides to pass on parking for a while and focus on employee friendliness. Neville decides to cut out the guesswork and go back to the folks who filled out the survey to ask why they feel the staff is unfriendly. It turns out that the problem mostly has to do with stockers crowding the aisles and ignoring customers in need. The department managers commit to making a change.
Step 3: Act
Sheila leads a team that formalizes the purchasing guidelines and ensures all purchasing managers use them. She sees to it that the guidelines are posted in the store and on the Neville's Naturals Web site.
Department managers institute new training procedures for stockers and create a bonus pool that will be paid out to all line employees the moment the tracked Employee Friendliness number hits 9.0 or above.
Neville makes sure that everyone stays on track and tells them that he can feel a very positive energy shift going on in the store.
Step 4: Check
Generally speaking, a quarterly tracking survey will keep the operational branding process rolling. You don't need to retest importance or expectations for a long time. The only issue that really matters is current customer perceptions (See Figure 2 below).
Neville shares the new findings with the team and celebrates real improvement in the two targeted areas on which everybody has been working.
The team now spends some time on the deteriorating parking situation. Creative brainstorming creates three solutions: Staff will no longer park within two blocks of the store, Neville's will lease four spaces from neighboring Joe Bob's Hardware, and the store will begin offering a 5 percent discount to those who bike, walk, carpool or take public transportation to the store.
At this point, Avelard the deli manager stands up and questions the continuing low ratings for employee friendliness. No one has ever seen a staff person being mean to customers. Neville counters that it really doesn't matter. For all intents and purposes, customer perceptions are reality.
Step 5: Breakthrough
Companies with world-class brands are famous for moving the bar—not just meeting customer expectations, but exceeding them. The branding scorecard not only shows what expectations must be hit to create loyal customers, it also shows the areas in which the little things will turn customers into champions.
At Neville's, this might lead to a discussion of how to improve the perception of friendliness when everyone in the store is already helpful and friendly. Team discussions might point out that customers don't want staff to be in their face, but certain friendly programs (free hot drinks on cold days; drive-through grocery pickup) may yield dramatic results from a small investment.
This insight has led more than one world-class hotel to send warm cookies and cold milk via room service to its customers. Such a gesture won't do a thing to improve customer satisfaction ratings if the bed is hard and the towels are dirty, but if the customer's expectations have been met on the basics, you can count on the milk and cookies to push that satisfaction score through the roof.
Woody Smith is president of Blue Sky Marketing, a strategic consulting firm in Traverse City, Mich. Contact him at 231.883.2835
Natural Foods Merchandiser volume XXVII/number 3/p. 74, 76, 86