The great metrics debate - Are companies going too far?

[Irving Patrick Freleigh]

And here's another thing: Basic sales approach dictates that some customers aren't going to want certain things or be receptive to certain offers. The idea being to get an idea of customer needs and then, if you feel the needs line up with something you're selling, you start in with the pitch.

Hence stores requiring every customer be asked if they want a loyalty card/extended warranty/whatever regardless of circumstances are rather silly.

True, but the people who really want a loyalty card or warranty with their purchase, or just can't stand up to a sales pitch don't have this tattooed on their foreheads; so you have to ask everybody.

The problem is when you get so pushy you don't take no for an answer and drive people away.

I guess I don't have much of a problem with my company selling extended warranties, but the way they push it sometimes I wonder if we are in the business of selling products or selling warranties.

[PepperElf]

I've seen and heard about employees going to all kinds of lengths to make these quotas, such as:[list of 7 items]

1) what can we do about this?

Considering some of the infractions you've seen/heard about are in fact unethical or downright illegal (#1, 2, 3, 5, 6) my first suggestion as to what you can do about it is notify the FTC or another legal authority of your choice. I'd prefer the FTC myself just because they can pretty much sanction a business for breaking the laws.

2) how far will it go?

That depends on question 1 - what people do about it. The more this is reported, the more companies can be taken to task for encouraging - even sanctioning - illegal actions to boost numbers.

Remember the old stories about AOL, how they would downright refuse to cancel people's contracts? Customer complaints to legal authorities got that shit stopped. I don't know when the other states took action, but I know that by 03 or 04, NY state law specifically prohibited the practice of giving employee bonuses based on retention levels, simply because people were boosting their numbers by refusing to let customers leave.

[mhkohne]

People will try to meet whatever metrics you rate them on. That is to say - they'll do what you tell them! Fancy that.

The problem is that most corporations have NO IDEA what they've told their employees to do! They THINK they've told them to get more loyalty cards out there. But they've really told them 'badger every customer'.

Metrics are great, IF YOU PICK THE RIGHT METRICS. If you pick the wrong ones, heaven help you.

Case in point:
An obvious way that one unfamiliar with the industry might try to rate the productivity of a computer programmer is by counting how many lines of code that programmer writes in a given time period. Unfortunately, what that tells the programmer IS NOT 'get the job done'. It tells the programmer 'write lots of code'. Anyone who has done any programming will know that the two things are not even vaguely related.

As such, no one in the industry tries to use this method anymore (heck, they figured out this wasn't working before I was ever in the industry).

I think the focus on incorrect metrics is something that retailers are doing because they don't know what else to do - and it's one of those things that produces improvement when you implement it, but where the improvement falls off over time. So it's really hard for the guys with the spreadsheets to understand that they aren't actually getting anywhere!

I don't know how to deal with it, other than to not deal with retailers who are a pain in the neck. Unfortunately, this means Amazon is going to get more business than ever, but at least they don't bug me about protection plans (yet).

[CrazedClerkthe2nd]

True, but the people who really want a loyalty card or warranty with their purchase, or just can't stand up to a sales pitch don't have this tattooed on their foreheads; so you have to ask everybody.

The problem is when you get so pushy you don't take no for an answer and drive people away.

I guess I don't have much of a problem with my company selling extended warranties, but the way they push it sometimes I wonder if we are in the business of selling products or selling warranties.

I forgot to mention earlier that in a lot of cases I know the reason companies push these kinds of things is because they are big money makers. The extended warranties are a great example. For example out of every 20 people who buy the warranty, 1 or 2 may actually use it. Those other 18 warranties? Pure profit.

I think stores get money from the credit card companies for getting people on the store cards too.

The logic behind this was explained to me as the marketplace is so highly price driven these days that it's tough to make much a profit margin on product alone. You have to find other ways to make money. Since these items represent a "golden goose" for the companies, it makes perfect sense they'll do everything they can to shove them down customers throats.

[fireheart]

I was so lucky that I didn't need to make "quotas" on anything except for two things: the first was to meet a scanning rate (which was around about 15 items per minute), the second was to get around 25% of loyalty cards scanned per week. (so that's 25% of your customers)

[bainsidhe]

I forgot to mention earlier that in a lot of cases I know the reason companies push these kinds of things is because they are big money makers.

QFT. The reason Media Play offered magazine subscriptions was because the store would earn $11 for every subscriber that kept the subscription beyond the initial 8 free ones. Which would be a lot of people, since most don't realize they're on the hook or else they just forget to cancel.

[CrazedClerkthe2nd]

QFT. The reason Media Play offered magazine subscriptions was because the store would earn $11 for every subscriber that kept the subscription beyond the initial 8 free ones. Which would be a lot of people, since most don't realize they're on the hook or else they just forget to cancel.

You've REALLY got to watch for that stuff, especially with so-called "Free Trials". Sales reps love to tell you there is "no obligation" to get you to sign up, of course they forget to mention that "Free" becomes "Paid" within a set timeframe unless you call to cancel.

[Pixilated]

When I first saw the title here I was thinking "metric" as in measurement ... kilometre versus mile and so on.

Good point. The only sales training I ever got when I worked retail was by way of laughably cheesy corporate videos or a relatively useless "role play" scenario with my manager.

*snip*

Those 'role plays' really can be a waste of time. We had them with the training sessions offered by our new owners at the time I was hired, and of course after you went through the approved patter, the 'customer' was buying well into three figures worth of stuff. In real life? Not hardly. If management actually believes it works this way, they've obviously not been on the floor in a long time, if ever.

High management also demands that we work in rigidly enforced "zones." I lost an $80 sale on my last shift because of these bloody "zones" -- I was talking to some customers about a fairly high-priced item. They left, saying they'd think about it -- when they came back, my zone had changed and I literally could not go out onto the floor to meet them -- so a coworker got the sale. To say I was pissed (not at the coworker) is an understatement, to the point where the manager actually took me off to one side later to ask what was wrong. What's wrong is I really hate being micromanaged to the point where it negatively affects my work, that's what's wrong.

*snip*

I also don't like pushy sales tactics. The best way to combat it, is to let corporate know you don't appreciate it and *gasp* actually never shop at the place again. (Instead of just threatening to and showing up again the next day.)

I second your comment on pushy sales tactics, which is why I (and many of my coworkers) won't use them. Our corporate trainer seemed to be a little ambivalent on them; the new company does require much more aggressive sales tactics than the old one did but ... she is aware that such methods do not go over well *ahem* over here, so I think she is willing to cut us slack provided our sales are good.

[Food Lady]

I don't know. I have a replacement plan on an appliance I know is going to die before the 2 years are up, because they always do. New espresso maker for $7? I think so. Also, we have store cards I talk to people about all the time because I have one and am very happy to have it. If they aren't interested, fine, but a lot of them come back to get it later.

[PepperElf]

Metrics are great, IF YOU PICK THE RIGHT METRICS. If you pick the wrong ones, heaven help you.

Well, for one metrics at least my last company explained why they picked it - credit card apps.

According to them, whenever customers used credit cards they paid out about 4 bucks (or 7 i forget which) for the transaction. On big items it didn't matter, but on small items it meant a profit loss. (this is why some small companies refuse cards under a certain dollar amount even if they're not suppose to).

However, if a customer uses the store-brand card, there is no usage fee so the company gets to keep the money. Plus they claim that people with cards spend more.

[Dreamstalker]

I stopped into a store yesterday to get some more reeds for an oil diffuser we have (I have since discovered that the 'reeds' they sell are junk compared to the ones I got with the thing, but not much I can do about the pack we already put in it). I hadn't been in said store in quite awhile and wasn't even sure they sold them so I asked. And was hit with a credit card pitch as soon as I had them in my hand. This was crafty because it first sounded like a free rewards program (points for purchases, birthday coupon) and it wasn't let on that it was a credit card until about halfway through. The last thing I need is another CC; also, I rarely shop there and never make the large purchases (furniture, etc) that they like people to.

[Pixilated]

When I get hit with a CC sales pitch (or any other, in person or by phone), I usually just say, "Sorry, I'm unemployed." The vast majority of the time that ends the pitch very quickly.

[CrazedClerkthe2nd]

Plus they claim that people with cards spend more.

I believe it has been established through research that people are less focused on how much they're spending when using a card vs. seeing the actual cash disappear from their hand. Another reason I very much like cash.

Those 'role plays' really can be a waste of time. We had them with the training sessions offered by our new owners at the time I was hired, and of course after you went through the approved patter, the 'customer' was buying well into three figures worth of stuff. In real life? Not hardly. If management actually believes it works this way, they've obviously not been on the floor in a long time, if ever.

A role play can potentially be very effective, but that's only when the person playing the customer is acting realistically. You'd think it would be easy to conduct such a role play, since most anyone in a customer facing position knows what customers are actually like, but effective role plays seem practically non-existent in the corporate world.

[the_std]

If I can offer an insight into the push for extra warranties and cables in electronics stores...

Prices on the majority of electronics are (relatively) lower than they have ever been in the history of their existence. This adds an extra-sticky twist to the sales system - the available profit on these electronics is at razor-thin margins. It's now harder than ever to make money by selling electronics, so much so that electronics retail giants like Best Buy and Futureshop have resorted to selling health and beauty items (shampoo, Q-Tips and suchlike) through their website.

Anecdotal evidence: the department I manage is up overall in unit sales (meaning we've sold more of the items we carry) but down in dollars total (meaning we've made less money). It's a hard situation to work in, because we know we're good sales-people, but we cannot make the profits simply appear out of nowhere. Therefore, there is more pressure to add extras to every sale to boost the money we actually make off the transaction. Don't even get me started on the saying, "Provide the best customer service, give the customer the best possible information, and you'll see your sales soar!", cause it's outdated and now completely inaccurate. I spend a large part of my days educating customers on their options, helping them figure out what's best suited to their needs, only to watch them write down the model number of the unit they've chosen and walk out the door to buy it online. I'm sure there are many people on these boards who don't do that, but I would comfortably wager 60% of my customer base does this, even though we now match online pricing.

So, while it's true that cables and other add-ons tend to be "overpriced" through these stores, the reality is that these add-ons help keep the stores afloat... However, this is turning out to not be enough. Most of the stores that rely solely on electronics are in major financial trouble; the only viable option for a store to sell electronics and keep their doors open are to sell other things as well. Wal-Mart, Target and other large combination-stock stores are going to have to be the only way to go soon enough. The profits they make on the other things they sell, like food, clothing and household items help to balance out the dent that selling electronics makes in their financials.

TL;DR - it's very hard to make money off of electronics, so the pressure tactics about add-ons and extra warranties are rapidly becoming the only solution to keep a store in the black.

[Pixilated]

I believe it has been established through research that people are less focused on how much they're spending when using a card vs. seeing the actual cash disappear from their hand. Another reason I very much like cash.

A role play can potentially be very effective, but that's only when the person playing the customer is acting realistically. You'd think it would be easy to conduct such a role play, since most anyone in a customer facing position knows what customers are actually like, but effective role plays seem practically non-existent in the corporate world.

I keep planning to go back to cash for that very reason ...

My brother, who was in town for a few days when we had this training, offered to drop by and play the customer. Now that would've been an accurate depiction. (Needless to say, the trainer declined the offer ...)