Give Your Customers a Raise

Apr 06, 2011 11:49 PM  By

As a merchant, “Your job is to give your customers a raise, in terms of price and experience,” says Phil Terry, CEO of strategic customer experience consultancy Creative Good.

If you can do both, Terry told attendees during his April 5 keynote address at the National Conference on Operations & Fulfillment in Las Vegas, “you’ll be in a great position. Go out and watch your customers.”

Terry, who has an MBA from the Harvard Business School, is known as a consumer-centric guru. He referred to Peter Drucker’s 1954 book, “The Practice of Management,” which states that the fundamental purpose of a business is to create a customer.

“A transaction does not a customer make,” Terry said. “What happens before, during, and after a transaction is what creates a customer relationship.”

With little discretionary income these days for families, Terry said it’s the operations and fulfillment people who have a significant opportunity and are “sitting in the catbird seat” to enhance the customer experience.

Terry said Walmart founder Sam Walton always knew what was best for the customer, but the company made a strategic mistake in 2008 when it reduced its SKUs, which led to a drop in same-store sales.

“We have to look at customer behavior,” Terry said. “Focus groups and surveys, people will read whatever they want into them. Going out and watching your customers will give you a cognitive and emotional experience.”

Terry said Apple cofounder/CEO Steve Jobs, is a fanatic when it comes to watching customers use his products. “It’s the single most important thing you can do.”

Another example is Warby Parker, which sells prescription eyeglasses online at highly competitive prices. Terry said this company, which launched in early 2010, has taken off due to its great pricing and superior customer experience.

Strong service and good prices usually translates to success, Terry said.