The false facade of American business

Written By Jeffrey Gitomer
@GITOMER

KING OF SALES, The author of seventeen best-selling books including The Sales Bible, The Little Red Book of Selling, and The Little Gold Book of Yes! Attitude. His live coaching program, Sales Mastery, is available at gitomer.me.

#741

There’s a headline in today’s USA Today (money page) that says, “Beloved stores get a lot more than a new name.” The subheading is “Macy’s swoops in big changes to Field’s, Hecht’s, and others – but a few old touches will stay.” Federated Department has bought them all, and will change their names to Macy’s.

Basically what the article says is that they’re giving big stores a merchandising facelift along with the name change. They’re trying to present customers a “new look” in the stores, I guess with the hope that they (customers) will “spend” more money. They’re keeping some of the old ornaments like clocks and places where people met, but revamping their style, their name, and the way they offer products — I assume, in hopes of growing their business.

The Federated CEO was moaning about declining retail in-store sales, but forgot to mention the word “Internet.” He also says that their three main focus areas are customer service, private labels, and store layout/amenities.

For a customer service face-lift there was one sentence, “We’re spending lots of time telling employees it’s going to be great.” What is that? Internal BS, to match their external BS.

Meanwhile their archrival Nordstrom is doing nothing. They don’t have to. They already get it. They don’t need a multi-million dollar face-lift. They hardly need advertising. People don’t “spend” at Nordstrom, they “BUY.” And like Harrods, customers come from all over the world to do so.

Here’s what will happen at Macy’s and the other Federated stores: people will go to see the new store once – some will like the “new look,” some will hate it. Their existing customers won’t spend an extra dime. The new people who show up to gawk may buy something, but they will only come back to the store to buy again if the service is great.

AHA!

Nowhere in the article does it say that these department stores are going to put in a better-trained and friendlier staff — or that they’re going to provide Nordstrom-like service. Why? Because they have no concept of “human capital investment.”

Think about it. Millions on a face-lift. Not a dime face-lifting their salespeople.

The net result of their investment will be a short-term, small increase in business (so that the corporate bigwigs can brag to their shareholders that their dollars were invested prudently). And then all the customers who came to see the circus parade will go back to Nordstrom where the service is great and the people care.

As a special service to Macy’s, I’m offering a “sales and service face-lift” in hopes that one of their bigwigs will find it, and use it. Meanwhile – this investment/training formula will also work for your business.

1. Invest an equal amount in people as you do infrastructure.

2. Invest an equal amount in loyal customers as you do in trying to attract new ones.

3. Teach your people to sell, not just serve.

4. Teach your people to up-sell – once the customer’s wallet is open – empty it.

5. Teach your people to serve in an unexpected, pleasant way. At Nordstrom the clerk takes your credit card and rings up the sale without you having to wait in line at the cashier. That’s pleasant. At Nordstrom (thanks to a Fujitsu cash register that’s also an all-store inventory search computer), if the store you’re in is out of a size or color or style, they can find it at any other store in the country in five seconds, call the store to be sure it’s there, and ship it to you. That’s service. No face-lift required.

6. Give EVERY employee a business card. At Nordstrom, all clerks have personal business cards – they present it with style – hand delivered with your receipt – and a handshake. That’s memorable service.

6.5 This is my personal observation – not just as a sales-customer service expert – as a shopper. I shop at Nordstrom and Barney’s, sometimes Saks Fifth Avenue. They seem to have the nicest and most helpful people. I shop other places as well. Too many to name here.

But the bottom line is: the product offerings at EVERY department store in America are about the same. The difference is the people, the service, and the technology – not new signs and shelves. Create that atmosphere in your stores and every employee will begin to hear non-stop ringing in their ears – the ringing noise made by cash registers.

If you’d like a few more ideas for setting a buying atmosphere in a retail store, go to www.gitomer.com – register if you’re a first time visitor – and enter the words BUYING MOOD in the GitBit box.

Jeffrey Gitomer is the author of The Little Red Book of Selling and The Little Red Book of Sales Answers. President of Charlotte-based Buy Gitomer, he gives seminars, runs annual sales meetings, and conducts Internet training programs on sales and customer service at www.trainone.com. He can be reached at 704/333-1112 or e-mail to salesman@gitomer.com.