Low-cost store-level improvements can produce high returns, especially when these changes help a chain develop a reputation for delivering a consistent, positive customer experience at each site. Eric Nelsen, a director in the fuels marketing and convenience retail practice of Mercer Management Consulting, says that many improvements to differentiate stores from the competition involve little or no capital outlay.

Constant improvement makes the difference when it comes to customer loyalty, Nelsen believes. "Customers tell us it's not the store's visual image, it's not the new products on the shelves or the perfect layout. The reason they return is the service and experience delivered by the staff." Considering that a good many customers could be visiting the store 10 or 15 times a week, making lots of small purchases, it's important to grasp the underpinnings of customer loyalty.

A Consistent Experience
"Retailers should ask themselves, 'How consistent is my customer experience?'" Nelsen says. If the chain lacks a strong operating system or some stores do
well while others do not, "there are likely opportunities for operational improvements."

A common problem with site operations, according to Nelsen, is not optimizing the work effort of employees beyond their duty to serve customers. For example, employees should spend their "customer downtime" vigorously making the store presentable. This requires constant straightening and cleaning, "facing" products, replenishing fast-moving products and keeping bathrooms clean.

One of the biggest complaints he hears in customer interviews (sometimes called "intercepts") has to do with how presentable the foodservice area appears. During high-traffic periods, Nelsen says, someone should be cleaning up the coffee area and tidying up the condiments every five minutes.

For these activities, especially for store cleaning, Nelsen finds that the best chains have a detailed regimen from start to finish, involving 20 or 30 specific steps. The result is not only a more thorough cleaning, but the process also goes faster as the employee repeats it over and over a certain way. So when it comes to training employees properly, he recommends a standard, chainwide approach. "A single manager will try, but even the best won't have the collective knowledge of the organization," he says.

Interacting With Customers
The final part of consistent service execution is the employee's interaction with the customer. Nelsen is amazed when he discovers that store managers are not telling employees what to say and do when interacting with customers - "the general message, how you greet them, thank them and say goodbye." This training should lead to systematic responses - responses that appear seamless - for a variety of service-related situations: reaching out to a customer who looks confused, who mentions that food or coffee tastes bad or who spills a soda on the floor.

"How about replacing the soda for free and cleaning up the mess promptly?" Nelsen suggests. "If a problem is quickly solved and the customer doesn't have to argue to get satisfaction, their loyalty is there for life."

Nelsen believes that training matters all the more in a retail business, where wages are not as competitive when compared to other jobs, and where high turnover "makes it difficult to get employees to deliver." Some of the best trainers he's seen are former store managers who have been promoted because of their proven experience in executing the topics they are training.

Rewarding the Best
Stores can improve their revenues dramatically through such systematic improvements, Nelsen has found, and typically, three-year increases of 10 percent, 20 percent or even 30 percent are not uncommon. Moreover, the best chains will reward their managers regularly with bonuses based on such improvements in sales and profits as long as they also achieve one or two customer-service related measurements.

Smaller retailers often feel that they're not big enough to spend time on making improvements. Nelsen allows that they're probably right, if the goal is to immediately create an entire system. "But if they work on some things as they can, keeping the broader vision in mind, they will see improvement," he says, "especially if customers have the opportunity to experience this improvement."

Nelsen's comments are based on a Mercer report, "Your Customers Want a Consistent In-store Experience," which he co-authored with Mercer's Bob Orr and Robin Sahota.