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Customer service is the missing link to improve store profitability

A well-managed store starts with the right people.

We are now four years past that fateful time in March 2020 when our businesses changed forever in response to the COVID-19 pandemic.  It was a time of great uncertainty. It was also a period that resulted in profound ingenuity. On-line ordering, curbside pick-up, virtual meetings enabled by technologies such as Zoom and Teams became the norm.  Businesses showed resilience, including the ability to change and execute new processes at warp speed. 

The past four years have witnessed business improvements to the standard operating process of the pre-pandemic period. These improvements have become part of our day-to-day lives. Can we, for example, imagine a day without a virtual meeting?  

What has been lost, however, during this time, has been the ability to focus on exceptional customer service. We are now past the business survival period and need to refocus our efforts on the basics.  

There is a case for hiring, training, and leveraging great customer service professionals.  Businesses will be more efficient, and importantly, set up for success with increased attention to the customer.

An IPSOS survey in 2022 indicated that consumers “…are increasingly seeking personal interactions, having been deprived of physical social contact during pandemic lockdowns.” 

The convenience industry is well positioned to meet this need because of the nature of the transaction: you cannot buy gas virtually and many times the customers enter the store to buy convenience items.  We must therefore capitalize on this consumer need and convert this consumer need into increased sales.

Customer service may seem like a daunting topic given the challenge of merely hiring and maintaining staff members. The 2023 Convenience Industry Council of Canada State of the Industry report indicates that convenience stores reported an 82% turnover rate in staff. 

The question is how to focus the efforts on customer service in the correct area to result in the greatest return on investment. Should the investment be in customer service personnel or in technology focused on enhancing the customer experience? The answer will be unique to each organization.  

The first step is a needs assessment. 

Store management needs to assess what their store’s strengths and weaknesses are and where they have the greatest opportunity: what is their competitive advantage?  

If, for example, the store has an opportunity to increase its foodservice offering, what is required to do this efficiently and effectively without causing undue workload for the staff. The answer could be in the equipment and technology used to produce and sell foodservice items. Therefore, research and planning are required to ensure that stores operate as efficiently as possible with the least amount of labour.

Another important assessment is to determine where the organization is leaving money on the table. If frontline store staff were trained in effective interactions with the customer to not only help them meet their immediate needs, but upsell them as well, the results could be exponential. 

Consider the case where a store has on average 450 customers per day: If they could sell just $2 more to each customer on average, the result would be an extra $900 per day in revenue.  The gross profit from this incremental sale could easily pay the wages for that employee for the day. 

The question is how to extract these incremental sales?

A well-managed store starts with the basics: the right people who can consistently execute the vision for the store to WOW the customers, keep them coming back and sell them more. What is it that you want your store to be? What are your strengths? How can you leverage that?

Every Monday for the month of June 2024, the Operational Excellence series will focus on helping store management achieve consistent operation excellence in their stores. Topics will include best practices for hiring, training, and managing staff, effective up-selling techniques, and how to drive customer loyalty.

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