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Refocusing The Business Strategy and Learning System Drives Retailer's Customer Loyalty And ProfitsHow Listening To The Profitable Customers
Helped The Chairman
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The Situation: | |
| • Regional retailer acquired four local chains • Implemented "low-price" strategy driven by customer surveys • Experienced a steady decline in: — Employee Satisfaction — Customer Loyalty — Same Store Sales & Profits • Store managers beginning to "go their own way" |
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The Challenge: | |
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• Redefine the business strategy so that it drives profitable growth • Create a consistent, compelling brand • Gain store manager commitment to the new strategy and brand • Rapidly build same store sales | |
The Solution | |
| • Re-analysis of customer data found that the most profitable customers were: — Working mothers shopping for a family of 4 - 5 — Completely satisfied — Spending 95% of their money in the store — Made 24% of their purchases in a 32 hour window — Valued service with competitive pricing • Shift strategy from low-price to branded service strategy • Define the new brand and service experience based on what are the most profitable customer segment • Train employees in behaviors that delight profitable customers • Modify store staffing to increase service during 32 hour window • Reward store leadership for coaching/reinforcing front-line • Reengineer key processes to improve store operations | |
The Results: | |
| • 5% increase in profitable customers • 5% improvement in price perception - despite raising prices • 4 - 5% increase in customer ratings of all service behaviors • 9% increase in same-store sales • 25% increase in operating margins • 10% increase in employee satisfaction | |
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