May 7, 2007

Study Finds That Problems Related to Salespeople are the Most Detrimental to Retailers

Philadelphia — A new study released today finds that Americans clearly deem front-line sales staff the single biggest detriment to their shopping experience, resulting in more lost business and negative word of mouth than any other shopping problem.

These were the findings of the Retail Customer Dissatisfaction Study, conducted for the second year in a row by the Verde Group, a leading customer dissatisfaction consulting firm, and the Baker Retail Initiative at the University of Pennsylvania’s Wharton School. Researchers compiled data from 1,000 American consumers surveyed in March, 2007.

“Our goal was to find out what annoys American consumers most when they shop and the answer came back loud and clear: SALESPEOPLE, especially those who don’t have the product knowledge they should have,” says Paula Courtney, President, the Verde Group. “A host of issues — including the disappearance of salespeople when they are needed, long check out lines, over-solicitous and insincere salespeople, and being ignored by sales staff — is alienating shoppers and losing big bucks for American retailers.”

The study found that not being able to find a salesperson is the most critical retail shopping issue of all and is experienced by 33 percent of all consumers who reported a problem. Notably, many of these shoppers are so annoyed by the lack of sales assistance that they won’t go back to the store at all. Ultimately, the findings show that American retailers lose a full 6 percent of their shoppers due to lack of help.

Equally damaging to business is that 25 percent of all consumers who report a problem when they shop are ignored by sales staff, receiving not so much as a smile, greeting or even eye contact. This turns three percent of customers away from the retailer permanently and is the number one problem customers are likely to share with others.

“And share they will,” says Stephen J. Hoch, director of the Patty and Jay H. Baker Retailing Initiative at the University of Pennsylvania’s Wharton School. “One in three customers spreads negative word of mouth about their shopping problems and each person tells an average of four others. I

nterestingly, it’s the younger consumer between the age of 18 and 29 that is least satisfied with their shopping experience and the older you get, the happier you are with your shopping experience.”

Adds Courtney, “US retailers are not improving or paying enough attention to the front line competencies that are required to win and retain customers. This is particularly true of ‘Category Killers’ — large retail chains that dominate their product category — as no matter what time of year it is, they are responsible for the greatest number of shopping problems (66 percent). Consumers rate department stores better, but shoppers still report problems 52 percent of the time.”

Based on the Retail Customer Dissatisfaction Study findings, the team at the Verde Group and the Baker Retail Initiative at Wharton has identified the four core competencies salespeople must have in order to drive loyalty and keep customers coming back for more.

They are:
Educator — explains products, makes recommendations and tells the customer where items can be found.
Engager — approaches the customer, smiles, makes eye contact and helps the customer no matter what else they are busy doing.
Expeditor — sensitive to the customer’s time constraints and helps them speed through long check-out lines.
Authentic — lets customers browse on their own if they want and is genuinely interested in helping regardless of whether a sale is made or not.

The Retail Customer Dissatisfaction Study was conducted for the second year in a row by the Verde Group, a leading customer dissatisfaction consulting firm, and the Baker Retail Initiative at the University of Pennsylvania’s Wharton School. One thousand telephone interviews were conducted nationally with American consumers between March 9 and 19, 2007. All respondents were randomly selected and qualified if they had purchased products at a retail store in the past month. Respondents were asked to exclude liquor, beer, grocery, and prescription drug purchases, or items valued at more than $2,500. The results are weighted to reflect the current US population distribution (based on census data) and are accurate to within +/- 3.1, 19 times out of 20.