Brands focus on service

24 November 2010

NEW YORK: Brand owners like Starbucks, American Express and Hewlett-Packard are enhancing their approach to customer service, which has become an essential concern in the difficult financial climate.

Coffee chain Starbucks suffered heavily as the downturn took hold, but has remodelled 1,000 US branches US in 2010, with a similar target for 2011.

It is also installing a new point-of-sale system, now in approximately half of US outlets, which is easier to use and yields quicker turnaround times.

"Our continued laser focus on improving our customer experience is resonating with our customers," said ceo Howard Schulz.

"Despite increased store traffic, every single performance metric, from accuracy, speed of service, beverage taste and overall satisfaction improved in fiscal 2010 from the already industry-high levels.

"We did it by delivering a great experience to our customers, one cup at a time, every day of the week."

Elsewhere, retailer Wal-Mart has adapted its inventory assortment and promotional emphasis to reflect the desires of shoppers.

"We're stepping up our strategic initiatives to help our core customers, as they struggle in the current economy," Bill Simon, Wal-Mart's head of US stores, said.

A leading innovation was creating "action alleys" containing the best deals, enabling visitors to easily locate discounts.

"It's a credit to our store associates that our customer experience scores are at the highest level in three years," said Simon.

"Customers are also happy with the action alley displays, because of the price intensity and product availability that they deliver."

Financial giant American Express found in a survey that 9% of consumers would pay a premium when businesses provided excellent service, although only 33% believed firms placed sufficient focus on this subject.

Over 25% of interviewees further suggested that corporations have either failed to modify their outlook or even downgraded the importance of service despite the recession.

"Companies have a major challenge - and a massive opportunity - to transform service into a real game changer," said Jim Bush, evp, world service, American Express.

"It starts by looking at service not as a cost - but as an investment in long-term customer relationships."

American Express has spent five years refining its strategy, seeking to build strong bonds rather than merely employing "robotic scripts", a move generating tangible results.

"When we reinforce product benefits and features when talking to our customers, we drive an average increase of more than 10% in our 'Recommend to a Friend' scores," said Bush.

"The approach also leads to our customers putting more spending on their American Express cards, driving an 8–10% lift in Cardmember spend."

According to the American Express poll, shoppers typically adopt a critical stance while viewing online reviews, generally affording unflattering remarks greater weight.

Hewlett Packard, the IT group, recently won a "Groundswell Award" from research specialist Forrester, recognising its efforts to engage netizens.

The organisation was lauded for the HP Consumer Support Forum, a free, interactive global community where users exchange tips, ideas and answer each other's questions.

An estimated 13m people have solved problems via this platform thus far, and some 460,000 posts are now available covering topics from printers to laptops, equally supplying a rich seam of insights.

"HP customers deserve the best experience and support possible," said Tara Bunch, HP's vp, global customer support operations.

"With innovative technologies and best practices, HP strives to anticipate and exceed customer needs and continues to grow and improve our consumer support offerings."

Data sourced from Forbes, Seeking Alpha, Hewlett-Packard; additional content by Warc staff