Customer Centricity is Social

Customer Centricity  - How to Leverage Social Media

Social networking has been an area of focus for many retailers, yet few have a handle on precisely how to fully capitalize on the burgeoning trend of social sites and social users.   While these Social Media sites often offer a new delivery channel for advertising, there is far more potential to the Social infrastructure when taken into the context of Customer Centricity.

Customer Centricity is a paradigm shift where the retailers view their customers as the organizations Core Asset - and find products that match the individual; as opposed to viewing the product as the Core Asset, and the role of the organization to be finding customers to which they can sell their products. I blogged about this recently here.

In the context of a Customer-centric philosophy, the more I know about my customer the more I can intelligently meet their needs.  Existing Retail data can only take us so far, as I can make assumptions about past purchases, but I am not often aware of enough about a given individual to be truly personal in my communication.  For this reason, many Marketing departments have leveraged third party sources to augment their data in meaningful ways, such as gaining demographic information, and in some cases psychographic data.  These exercises have been meaningful in segmenting groups of customers, but typically not leveraged in highly personalized communications.

I often say that it is the in-store associate that is the most customer-centric part of any retail environment. This is due to the open dialogue with the customer, and the ability to ask targeted questions about needs, lifestyle, life events, etc.   This is a fairly typical part of any mid to high-service environment.   

With the advent of Social Networking, and open API’s, however, there is a wealth of information available to retail organizations that answer many of the questions an associate might ask, and can in fact provide details well beyond the capability of an associate to ascertain.  There is a wide variety available for most Social sites which can provide a wealth of information unique to a very specific customer. Likes, friends, favorite sites, comments and more are available through the many Social APIs. From this data retailers can now get a true 360 ° view of a customer – related to the retail brand, but also in a more social environment.

The immediate challenge for retailers is in linking Social customers with in-store and on-line customers. This requires technologies capable of storing the data consumed across these new channels, as well as incentives for customers to share this data with the retail organization. While these are clearly not small obstacles, many retailers are coming up with creative ways to do gain access to data, and top technology vendors are providing solutions that can leverage this data (more on this topic in an upcoming blog).

The future of Customer-centric solutions is one where there is a view of the customer as an individual – inside the store, online, and in social engagements. Armed with this true Omni-channel data, retailers are then equipped to provide highly personalized and unique value to each customer through real-time recommendations, offers, promotions and more. 

Retail Mobility – Today’s Technical Challenges

Retail Mobility – Today’s Technical Challenges

For any Retail CIO, the rapid changing technology landscape is making it difficult to deploy in-store mobile solutions. There are a number of implications to deploying mobile technology on the store floor, ranging from the selection of the device, to the solutions available by device platform, to security and potential privacy concerns.  And while all of these issues exist, it is clear that a large number of retail organizations feel it is imperative to get technology on the floors, so as not to be left behind.

The technology landscape has changed dramatically in the last 5+ years. Consider the following:

• New Channels – Consumer Mobile, Social Media, Publically available API’s  
• New Devices – iPhone, iPod, iPad, Android Phones and Tablets, Windows 8 PCs, phones and Tablets; each with different screen resolutions and screen sizes
• New Operating Systems – iOS, Windows 8, Android; each with a different development environment for native application deployment.
• New Data Access Requirements – Cloud, On-Premise, Hybrid deployments. Social and Public APIs. Omni-channel real-time connectivity.

Most retailers have been caught a bit off-guard with all of these changes.  Not that they didn’t see any of them coming (we have all known the potential of mobility for some time), but the speed of the changes, and the urgency to deploy technologies now has come as a bit of a surprise.  

Let’s be honest. Retail is often not the most up-to-date in the technology department – at least not on the store floor. There are certainly legitimate reasons for this – cost and risk to name the two most obvious. Putting new hardware and software into every store, adding wireless infrastructure, bumping up bandwidth, etc. all come with a cost associated with them. Then there is the risk. Take POS as an example. POS is mission critical, and having registers down for any period of time can have dramatic impact on the sales of the organization. This is true of most in-store solutions, as issues at the store can have dramatic impact at the head office. As a result, retailers have most often followed the adage that slow and steady wins the race – or at least it was until a few years ago.

Then along came Mobility. Mobility impacted customer perception in three important ways:

1. Consumer adoption of mobile smartphones became ubiquitous, and the ease of use of the devices, on the go, became commonplace. In fact, combined with the always connected Internet at home, consumers were beginning to enter the store with as much knowledge as their associates working for the retail store. Expectations began to rise. 
2. Apple Stores came out with a new way of ringing up customers on the iOS devices, which was seen as a far better user experience (although forms of mobile POS have existed for many years). Mobility was suddenly seen as sexy and not just practical for line-busting. 
3. New form factors began to arrive, creating the potential for a joint Associate/Consumer experience. While tablets have been around for over a decade (I was personally involved in a Clienteling deployment using Windows Tablets over a decade ago), the ease of use of the iPad and Android tablets made it far more feasible to deploy applications that were easy to use, with little training. And these solutions could actually augment the relationship with the in-store associate.

As Executive Management began to understand the impact of mobility (if not just from the point of view of consumer perception), more and more initiatives were created to leverage these new capabilities.  The obvious low hanging fruit was POS, but without some other technologies also being supported on the same device, the ROI was sometimes hard to justify. For this reason, many retailers looked for deploying in-store solutions other than POS in parallel with their mobile POS initiatives.

This is when the real challenges began.  First, the easy approach to mobile POS was to “bolt on” the mobile solution provided by the existing POS vendor. The challenge here was that not all vendors had a mobile solution; or those that did may not have had a solution on the device type of choice by the retailer. The iOS platform was gaining the largest acceptance (particularly in the US), and many vendors committed to creating solution on the iOS (iPod, and now iPad). Unfortunately this created additional issues for retailers in the form of security and privacy, as well as internal expertise. In addition, most PC-based solutions remained on the Windows platform, as this has been the hardware of choice for a number of years in the retail stores. As a result, IT now needed to support multiple hardware platforms.

Globally the device of choice was not always the iPod or iPad, as Android began to gain momentum.  While Windows was clearly late to the game (unfortunate due to the more robust security in the platform by nature), even Windows Mobile platforms were no longer supporting past application development (such as Windows Mobile 6.5), so now vendors were faced with a new set of Operating Systems for which to design, and retailers new devices (and corresponding OSs) to deploy.   Add to this that fact that traditional hardware vendors such as HP, NCR, Motorola, etc., were unable to deliver iOS hardware solutions due to the proprietary nature of the Apple platform.  As each of these vendors looked for ways to compete in the mobile device space, they looked to Windows or Android for their solutions; which has ultimately led to more competition, and even less clarity.

Making Sense of It All

So what is a retailer supposed to do in the midst of all of these changes?  What follows are my thoughts on how many of these challenges might be addressed.

In order to handle the problems associated with the above issues, retailers should be looking for solutions that provide the following four capabilities. The solutions should be:

• Platform Agnostic – solutions should be able to be deployed on myriad devices and Operating Systems - natively. While not 100% standardized today, HTML5 solutions provide the best cross-platform capabilities, and with the use of cross-platform development tools, these solutions can now be installed on devices natively, which provides for a much richer user experience. While there may be issues in the myriad screen resolutions and dimensions, these tools offer the promise of building code once and running it on existing PC hardware and on various mobile devices. 

• Data Agnostic – solutions should be able to access data from a variety of existing data sources real-time, and operate as though the data exists within the particular solution itself. While Web Services (SOAP and Restful) are clearly meaningful, a complete Data Access Layer that can draw data from a variety of sources into a logical data model, and then operate on this logical model can be even more significant. With the availability of data providers, this can now be a reality. Such a full extraction and separation of concerns allows a software solution to integrate in a variety of ways based on the retailer’s specific environment and data availability. 

• Deployment Agnostic – while retailers were cautious about storing data in the Cloud due to security risks, more and more retailers are seeing the benefits of doing just that. Hosted solutions, or Software as a Service (SaaS) has become commonplace in most industries, and retail is beginning to follow. Some information, however, does currently reside in-house, so a migration to the cloud is not practical, so solutions that allow for a hybrid deployment is a perfect compromise. This provides the benefits of the Cloud (cost savings, distributed data access, scalability, etc.) and the gradual migration of prior investments. Of course for those retailers with large IT organizations, the on premise model should also be available. 

• Flexible and Extensible - solutions deployed in retail must be flexible and extensible through SDKs and configurable capabilities whereby a retailer does not have to rely on the solutions vendor to add new features, or modify the way the solution works today. While there are clearly advantages to certain features being incorporated into a base solution, there are times where a retailer may wish to leverage prior development efforts, or to create a unique set of features which provide a degree of competitive advantage they may not wish to share. This extensibility is critical to future-proofing a solution to allow for the lowest total cost of ownership.

Conclusion

Advancements in technology and in consumer expectations have made deploying mobile solutions a high priority for many retailers; however the range of solutions, platforms and devices has made the choice of the ideal solutions increasingly challenging.

By leveraging technology and software development advancements, however, retailers can now begin to address these challenges with little risk. Solutions that can run on any device platform, can access data from a variety of sources, can be deployed in the Cloud or on-premise, and are fully extensible, are now not only a possibility, but a reality. Such solutions provide the retailer the flexibility needed to leverage existing systems, and the comfort in making decisions on their future hardware and environmental platforms.

In-Store Retail Solutions - Managing Culture

The Importance of Cultural Change Management

I have been involved in in-store solution deployments for over a decade; and if there is one thing that is consistently underestimated it is need to manage cultural change through a formalized process. I refer to this as a Cultural Change Management program, and insist on a minimum block of services in any engagement for which I am involved.  

In-store technology, and specifically Clienteling, is all about changing behavior. The goal is to change the behavior of the associate, of the store management, and even the customer. The associate is expected to perform new tasks (or the same tasks in a different way), management is expected to manage through a different process and perhaps use different metrics and KPIs, and of course the end goal is to influence customer behavior before, during, and after a sale. Ultimately, this can only be done through effective Cultural Change Management.

Without exception, the new initiatives that have the greatest success have been rooted in a commitment to improve the behaviors and specific activities of the sales associates and in-store managers in a managed and controlled fashion – and from the top down. Simply deploying a new technology is not enough. However, deploying technology with the appropriate foresight, planning and monitoring can pay tremendous dividends. These dividends come in the form of increased organizational commitment, improved service levels, increased associate productivity and increased sales and margin.

The following highlights what I believe to be the ideal phases (and steps within each phase) in any change management program. I must admit that few retailers will go through every one of the steps, but I encourage them to do so, as each provides incremental value.  

The six most important phases are:       

• Business Impact Analysis
• Change Management Assessment
• Change Management Strategy
• Program Design
• Execution/Training
• Monitoring and Review 

Business Impact Analysis

Goal: to assist the retailer in articulating the anticipated Return on Investment and the desired impact to the business of a full roll-out. The Business Impact Analysis provides very meaningful numbers that can serve as the foundation for an effective program. It includes the following:   

Baseline Analysis – The Baseline Analysis should provide valuable insight as to what is influencing customer behavior today and therefore what activities should be encouraged tomorrow. For example, most retailers are quite familiar with basic metrics such as average transaction value, average items per transaction, and customer frequency. However, they likely do not know how these are impacted by the customer/associate relationships. In other words, what is the average transaction, items per transaction and customer frequency when a customer shops with the same associate? In most instances this relationship significantly impacts these numbers – often more than doubling each of the metrics listed. A Baseline Analysis identifies this sort of direct correlation which can then spotlight the activities required in the store, as well as provide a baseline for modeling future impact.

Business Impact Model - The Business Impact Model is designed to model the likely benefits of an in-store initiative, and the future benefits. It can be used for ROI purposes, as well as for a compass for success.  While a number of metrics may be considered, a typical Business Impact Model will include assumptions related to such things as increase in Traffic, Conversion, Average Transaction Value, Margin, Frequency, etc. As described above, the Baseline Analysis will often provide real-world numbers which can be extrapolated across a larger set of customers to provide very realistic, and often enlightening, business impact.    

Change Management Assessment

Goals: to discover the overall goals and vision of an in-store initiative, as well as to define the business activities and best practices that are to become institutionalized. To design and manage the process and implementation of the application in the store, in order to assure the greatest success.

Visioning – A Visioning session is designed to allow key stakeholders at the corporate level (typically not store level) to fully articulate the goals and vision of an in-store program. A critical element of any such initiative is total alignment to a common set of goals and long-term vision. As part of this Visioning session, the retailer should establish a set of Key Performance Indicators (KPIs) that will be the primary focus of the program, as well as articulate how the business will be different in six months, one year and beyond (customer engagement, associate management, internal communications, etc.) By understanding the specific goals and metrics that will be tracked to validate successful execution, the retailer is in a much stronger position to design a program that targets a specific end result, and keeps focus on very specific long-range goals.   

Discovery and Assessment - The Discovery and Assessment process is performed in order to assess the current capabilities within the organization, and to identify any gaps that should be filled for optimal success. This is a critical review of technology capabilities, data availability, systems functionality, as well as existing engagement models (Campaign, Credit Marketing, Loyalty, etc.), and to look for opportunities to leverage or shore up these capabilities through the new in-store program. This discovery and assessment process will also highlight potential risks to a successful implementation.

Best Practices Session – The Best Practices Session is a review of current in-store practices. This review will result in a summary of current store-based operating practices gained primarily from observations in-store. While existing corporate policy may define certain activities, it is extremely common to find that what actually happens in the store is quite different – sometimes much better, and sometimes worse. This is an assessment of what happens in the stores today that works, what does not work, and what should be happening but is not today. One-to-one interviews with top associates can be quite helpful in understanding the process they follow, gaps in existing system capabilities, and wish list items for the future. The end goal is to define four to five “best practices” that can be standardized and institutionalized across the organization.  

Training Capability Assessment - The Training Capability Assessment is performed in order to define the current training capabilities and resources within the organization. Training methods, approaches and materials should be discussed, with an end goal of identifying the likely training methods, internal training strengths, and areas of weakness that can be shored up. Areas to include are associate training, store management training, regional management training, and IT and Administrator training.

Change Management Strategy

Goal: after a complete analysis and assessment of current needs and goals, it is important to define the following three strategies:   

Communication Strategy - A key element to any effective change management program is the Communication Strategy. The Communication Strategy sessions should focus on the who, what, when, where, and why of communicating throughout an in-store implementation and subsequent roll-out. The focus is on what is communicated to key stakeholders including executive management, regional and store management, as well as the critical communications with the sales associate. Topic should include:

• Awareness – is everyone aware of the goal, and why a specific action is required?
• Desire – how do we motivate the individual to participate in the change (goals, contests, rewards, etc.)?
• Knowledge – how do we assure the individual possesses the knowledge needed to make the change (selling skills, computer skills, solution training, etc.)?
• Ability – are all of the tools in place that will enable the individual to complete the task at hand (solutions properly configured, appropriate letter templates created, etc.)?
• Reinforcement – is there specific monitoring needed to provide valid and consistent reinforcement?

Monitoring Strategy   - Effective change management can only take place through monitoring and feedback. As such, the monitoring strategy is critical to providing the information that is to be used to evaluate success and compliance, as well as to give the feedback needed to make minor course corrections if results are not what is anticipated. The monitoring strategy focuses on identifying the key metrics (KPIs) to be tracked, how they are to be communicated, as well as how to most effectively use the feedback at all levels of the organization. 

Training Strategy – Tied closely to the communication strategy, the training defines the specifics of how associates are to be trained both in reinforcing of sales processes as well as on the software solution itself. It may include the types of associates to be trained based on selling skills and technology proficiency, as well as the most optimal approach to getting associate engagement. Additional strategy should be formed that focuses on how to engage managers and others (i.e. Champions and training personnel) to become the most effective in their roles as well – ultimately empowering associates through use of the solution.

Program Design

Goal: to assist the retailer in designing very specific programs to be used in supporting an in-store technology initiative from the communication, training and monitoring perspectives. Program design may include such things as naming the initiative, identifying the appropriate mission statement, developing key messages and media to be used, as well as a host of other material preparation.

Training Program Design – Training Program Design includes the creation of specific training materials and processes for all user types (admin, manager, associate, etc.) and all training phases (phase 1, phase 2 and follow-up). The program design will consist of defining and creating specialized programs for step by step training (such as Seven Steps to Success), as well as materials to be used for pre-live, go-live and follow-up sessions.  
 
Communication Design – Communication Design includes development of communication documents, reports and dashboard elements to be used by each of the levels within the organization. Communication design may include such items as dashboard or report views for Executive Management, exception reports for Store or Regional Managers, as well as core messaging for associates. The primary deliverables for associates include pre-launch communications (with appropriate message and branding considerations), Go-live communication documents, as well as updates, monitoring and feedback documents or reports.  

Monitoring Program Design – Monitoring Program Design includes the creation of key reports, metrics and dashboard that provide the feedback required for each level of the organization. Tied directly to the Communication Strategy and Design, the Monitoring Program makes sure that all key metrics are available in the appropriate format for the specific user. The Monitoring Program Design assures the appropriate data elements are available and articulates the reports and dashboards required to deliver them.  

Execution / Training

Goal: to execute on the previously defined strategies. To provide training to the store associates, managers, and administrative staff. The training for the store associates should consist of basic sales training intended to support articulated best practices as well as application training. Training for managers should consist of methods and tools used to support best practices, coaching of associates, and application training. Administration training typically consists of environmental overview, application configuration, and Admin application training. Training may often come in phases, with pre go-live training as well as phase 2 follow-up sessions. Training methods may include CBT, Train the Trainer, Classroom training, WebEx training, etc. 

Application Training – The in-store training performed in this phase focuses on the identified best practices the retailer wishes to implement. This training covers a refresher on the basics of selling (i.e. customer contact, needs identification, presentation of merchandise, close of sale) as well as more advanced selling concepts designed for up-selling, cross-selling and suggestion selling.  This training may also cover the general best practices of selling including such things as outbound communications, follow-up, proactive selling, appointment / tickler practices, etc.

Admin Training – The training for management and administrators will allow them to become proficient at basic setup and configuration of the technology solutions. This would include setting up associate data, permissions and security settings, creation of custom form list data, etc. In addition, this training also helps to define how the identified sales practices can be further automated, or how messaging technology might provide assistance through prompting or recommendations.

Manager Training – The training provides the skills required for gaining compliance, identifying opportunities, augmenting best practices, identifying coaching opportunities, coaching, and feedback. It also typically includes training on the use of the application, use of “team” functionality and an overview of monitoring, coaching and opportunity assessment.

Follow-Up Training – Follow-up training provides additional training for subsequent phases or refresher training. These sessions are typically on-site with either in-store associates or with the training department (particularly relevant with a phased training approach). Follow-up training can be a critical element to the entire change management approach, as problem areas or specific individual strengths can highlight the most important areas to train.  

Monitoring and Review

Goal: To monitor compliance and success relative to pre-defined KPIs, and  to locate training and coaching opportunities. Monitoring also provides the ability to highlight areas of great success, or areas with lack of success, which can then provide incremental course corrections or new strategic initiatives.   

Monitoring and Review –The establishment of Key Performance Indicators (KPI’s) is crucial at the outset, as it provides measurable benchmarks needed to gauge success. In addition to setting the benchmark and goals, monitoring behavior and usage from the beginning of the application roll-out identifies knowledge areas or desired practices that need additional focus.  This may include mentoring individuals that are not completing the tasks assigned to them, individuals that are less effective than the average, or even practices that are not producing the desired results. By refining the processes in a scientific manner, the retailer is in a better position to act quickly and respond appropriately once an issue has been identified.  New standards and benchmarks may be established as the organization improves, and as new practices are implemented over time.

Conclusion

Implementing new processes and procedures at the store level can have less than desired results, if not effectively managed. Day to day activities are typically rooted in the culture of the organization, and without planning for changing this culture, most organizations fail to see the full benefits of any new initiative. And the more people who are relied on to implement a change, the more challenging this becomes. With in-store technologies, a retailer is hoping to affect change with what is most typically the largest group of employees in the company. As a result, effective Cultural Change Management is a must.

Without exception, the new initiatives that have the greatest success have been effectively managed from the top down. Without a clear mandate from Executive Management, most initiatives will fall short of expectations. An effective Cultural Change Management program should consist of a set of progressive phases, each building off of the prior. These phases must define where you are today, where you wish to be, a strategy to get there, an execution plan, and the appropriate monitoring and review. Without a comprehensive approach, retailers will fail to see the full potential of any in-store initiative.

Clienteling - A New Clienteling Platform

A New Clienteling Platform

You might enjoy this video on the new Raymark Clienteling solution. It's an impressive solution capable of running on iPads, Android, and Windows devices, and accessing data from within a retail organization.

Expect to hear more about it in the coming months.

#Clienteling has never been better.



Learn more here...

Customer Centricity is Still in its Infancy

Customer Centricity is Still in its Infancy

I ran across an interesting a article, and thread of comments on the topic of Customer Centricity. The post is an assessment of a Whitepaper that declares Customer Centricity to be all but dead, and wondering what's next. I found the author of the post to be fairly on target with his assessment, but couldn't help but notice the impassioned discussion as well. 

You can follow the thread here.

I believe much of the discussion, and much of the potential confusion comes from the fact that there is no real definition of Customer Centricity. As such, interpretations become overly broad, and the true meaning is lost. I recently published an article myself on the topic called 1:1 Customer-Centric Retailing.  

While I did not go into how such a strategy might ultimately be executed, I will state that I believe technology will allows us to finally accomplish our goals, but we are very much still in the infant stage of life. I see a future where each and every communication done by a retailer (other than the 1:1 interactions with in-store associates which already do this) can be personalized down to the "segment of one". Furthermore, this communication can be timed based on a customers preference, taking into account their past purchases, needs, lifestyle, stage in the customer life cycle, social interests, etc. 

My years in the Clienteling and CRM business have proven to me that customers want to have relationships with the retailers with whom they do business; and once a relationship is forged, they are more than willing to provide more information if they believe it will provide benefit to them. By then leveraging this information on a customer by customer basis, a retailer can finally see the true benefits of Customer Centricity. 

While CRM is not yet capable of this true 1:1 relationship management today, it is most definitely heading in that direction. 

Clienteling Pilots - Avoiding Six Potential Pitfalls

Clienteling Pilots

Avoiding Six Potential Pitfalls

Executive Summary

Today’s economic challenges have more and more retail companies looking for opportunities to increase top-line revenue with in-store initiatives. The promise of increased sales through Clienteling is extremely attractive in attaining these goals. However, capital is more constrained than ever, inducing senior managers to look for early proof that projected returns for any new technology or process improvement are in fact achievable. These cash starved organizations are equally concerned with the up-front costs associated with any new revenue-enhancing investment. As a result, more companies are looking to start small and pilot technology initiatives in order to justify the expense of moving to a company-wide roll-out. They are in essence “buying an option” against the total cost of this large scale investment.Pilots typically have a few important advantages:

• Lower initial investment
• Knowledge and Feedback (KPI’s, Business Process, Training Requirements) 
• Subject to specific conditions, a way “out” if the pilot is not successful

However, pilots often have distinct disadvantages – not the least of which is gaining adequate corporate focus and alignment with core organizational objectives. Since pilots necessarily have a smaller initial investment, often they do not gain appropriate levels of visibility across key areas of the enterprise. Similarly, because many pilots are approached as a “test” of a solution’s capabilities or usefulness, the initiative can be marginalized suffering from inadequate organizational priority, resources, focus or planning. If corporate goals, measurements and success-based accountability are not put into place early and consistently communicated to all constituents regularly, pilot initiatives often wander aimlessly. This results in many solutions never being given a real opportunity to provide their potential corporate value. 

Pilots require specific goals and a well defined path that the “rank and file” can follow to achieve success. Defining, communicating, measuring and managing your team will require a well designed change management processes. While the final roll-out of an implementation may be designed differently than a Pilot program, the Pilot must have a comprehensive multi-disciplined program as its foundation, which includes appropriate caveats, goals, rewards and risk identification.

The objective of a pilot needs to be exactly the same as the objective of the future broader full roll-out, albeit on a smaller scale. As a result, a significant percentage of the work needed to ensure long-term enterprise success must be performed early in the pilot initiative. To do anything less undermines the validity of the test, and can actually negatively impact the likely success of a subsequent roll-out.The six pitfalls to avoid during a Clienteling pilot include:

• Lack of Executive Sponsorship / Involvement 
• Lack of Defined Goals and Measurements of Success 
• Inadequate Resources, or Authority/Accountability Disconnect 
• No Mitigation Strategy for Potential Impediments 
• Lack of Full System Integration 
• Unmanaged Cultural Change / Lack of Program Design 

By recognizing these potential pitfalls in advance and by developing a plan accordingly, retailers can be assured of seeing the true benefits of a pilot, and can feel confident that their results are truly indicative of an enterprise wide roll-out. 

Six Pitfalls to Avoid

What follows is a discussion of six common pitfalls to pilot initiatives that may limit the success of a pilot, and negatively impact the desired results. The common theme throughout pertains to effective planning and execution of a cultural change management program. Unfortunately, well-intentioned retail decision makers often embark on a pilot, inspired by the promise of dramatic business improvement without a clear understanding of what it will take to change the established cultural norms and behavioral patterns to make the project a success. All too often the amount of preparation and oversight required to deploy a pilot is deeply underestimated. Failing to recognize and address these pitfalls will lead to less than optimal pilot results or, in extreme cases, failure of the pilot to succeed in any meaningful feedback for a subsequent rollout. 

 

1. Lack of Executive Sponsorship / Involvement

Executive sponsorship, and the specific understanding of this sponsorship to all constituents at the store level and above, is imperative to pilot success. The pilot initiative must be elevated as a top agenda item for senior management. Without top-down ownership of the initiative, other store priorities (i.e. floor moves, markdowns, staffing issues and other operational tasks) will inevitably supersede the extra effort of learning and using a new tool. While these other operational tasks are important, they don’t generate incremental revenue. Simply put, Clienteling is just too important to growth to be vying for leftover mindshare. Once store personnel understand that senior management is fully invested in the outcome of the pilot, in-store commitment and willingness to strive toward success increase exponentially.

Keeping the team aligned and committed requires consistent down-stream communication from Executive Management that highlights pilot objectives and projected business benefits. As with any new initiative, results are ensured by instituting accountability down the chain of command.

2. Lack of Defined Goals & Measurements of Success

Without clearly defined goals and a means to measure progress your pilot initiative is likely to wander aimlessly. If you want an associate to get from point A to point B, it is imperative that you tell them precisely where point B is, and that you ensure that they have the tools and abilities needed to reach that destination.

In order to determine the specific Clienteling activities that will provide the greatest benefit, start by articulating your corporate goals, and extrapolate that into specific in-store goals. It is important that the number of initial goals is limited to that of top objectives that can be reasonably achieved; usually 2-4 goals are best. Once the goals have been established, determine how the success of these goals is to be measured and how these Key Performance Indicators (KPI) will be communicated. In-store goals should map directly to a corporate goal.

     Example     
     Corporate Goal = Increased Frequency
     In-store Goal = Outreach results related to Potential Lapsed Customers

After appropriate measurements are determined, the method to deliver ongoing feedback must be instituted for each level of the organization. Corporate and store level KPIs should be visible to executive management, while individual associate and store level metrics are available to the associate, store manager and regional managers.

3. Inadequate Resources or Misaligned Accountability

Constrained capital often plays a major role in choosing to implement a pilot prior to committing to a full roll-out. When resources are tight it is common to staff a pilot with resources borrowed from other projects, and on a part time basis. While appropriate for some roles, it is important to note that there are two critical roles where this will have a significant negative impact. The two roles that require dedicated resources are the IT/Technology Project Owner, and the Business Owner.

Typically, there are an array of technology skills and resources that must come together to implement a Clienteling initiative, but ultimately there is one individual that must own the technical success of the project. This person’s role is to manage all technology aspects of the project, to test and validate all aspects of the project, and to act as the liaison between the stores, IT and the vendor. While this role is not likely to be a full time job for the entire life cycle of the engagement, there are times when the initiative will take up the majority of this person’s workday or workweek. Coordinating the internal efforts involved in integration, implementation, testing, validating, etc., require time and a single minded focus.

The business owner is perhaps the most critical individual resource in most in-store initiatives, pilot or otherwise. This person acts as the coordinator, helping to finalize the overall project as it relates to KPIs, Best Practices, Training Strategy, Communication Strategy, Monitoring Strategy and total program execution. This individual also needs to coordinate the efforts of the Users for application configuration, data validation and User Acceptance Testing.

While it is not uncommon for this person to fall outside of the direct store chain of command, this can create significant issues if not managed properly. This is true for two reasons:

• Accountability – If the stores do not feel they report to this person, the individual has no authority to hold the stores accountable.

• Priorities – While this initiative may be a major priority for the company, without direct involvement from the appropriate chain of command, other day to day tasks, always seem to be of higher priority. 

For these reasons, it is recommended that the business owner is either from the store chain of command, or that Executive Management communicates very explicitly how important the initiative is, and remain fully engaged from the goal setting, training and accountability aspects throughout the life of the pilot. Ideally the Business Owner should report directly to Executive Management related to the initiative. Division/Region managers must also be involved in the planning and execution, and held accountable the actions of their stores, and the prioritization of the initiative.

4. No Mitigation Strategy for Potential Impediments

There are an array of potential impediments to a project that range from overcoming existing cultural issues, to technology shortcomings, to process conflicts, to available resources. Every corporate culture is different, and each retail organization is supported by existing processes and tools. For this reason, there is no easy cookie cutter approach to identifying impediments. Instead prior to moving forward, the business must undergo a thorough analysis of existing processes, technologies and current culture to identify such issues.

Once the potential issues are identified, a mitigation strategy must be defined for each of the key elements. This strategy can then be put into practice and communicated throughout the entire lifecycle of the project.

The following is a brief list of potential impediments:

     1.      Competing agendas and processes

     2.      Unique technology restrictions (lack of access to data, etc.)

     3.      Resources

     4.      Culture and Attitude

Competing Agendas

Of the four potential impediments, competing agendas is the most common, and has the greatest risk of negative impact. When there are competing agendas, associates will tend to gravitate to what is comfortable, or known. This can create unspoken resistance, which is often difficult to identify. If an old technology or manual process delivers some of what is the scope of the pilot, or associates are rewarded for using different methods, or DMs or RMs stress different priorities, there is immediate ambiguity and resulting risks to the project. For this reason, all potential competing agendas should be identified and addressed prior to the pilot initiative.

• Features of the application currently available through other technology
• Features of the application currently available through manual processes
• Reports or key metrics where associates, managers, GMs DMs and/or RMs are being held accountable that may be inconsistent.
• Areas where the current incentive plan may conflict with the initiative
• Cultural issues related to client interactions 

Unique Technology Restrictions

While not often a critical impediment, there are certain technology restrictions that should be identified and addressed in the overall strategy and program design. Examples of such restrictions might include the absence of wireless infrastructure or dead-spots in the stores (mobile only), poor data integrity between existing systems, or legacy POS incapable of running web or third party applications. While some of these restrictions may continue to exist during the pilot (i.e. duplicate customers in the database), they must be managed to eliminate negative feedback or pilot performance. In some cases, simply acknowledging an issue and describing the future roadmap is all that is needed.

Resources

The number of resources in the store is rarely an issue with a pilot (or at least not beyond the constraints with which the store is already faced), however getting IT and Head Office mindshare can be a major problem. As discussed above, the alignment and accountability of resources is critical.

While the above discussion focused primarily on those that will effectively manage and motivate the in-store staff, there are a few other key stakeholders where lack of involvement will hinder a project’s success. Continued involvement from resources in the following functional areas is typically required in a Clienteling initiative:

• Marketing 
• Loyalty / Rewards
• Training 
• Merchandising 

Each of these business areas has a vested interest in the success of most in-store pilots, and each should engage early in the process, and remain engaged through the life of the initiative.

Culture

Cultural issues abound in many retail environments. Some retailers have a very strong sales culture, while others do not. In some environments the “Rock Star” associate is left to do what they wish, while in other environments associate behavior is quite regimented. Ultimately the retailer knows their business best; so a review of strengths and weaknesses must be done using an “introspective lens”. While existing cultural issues should never prevent a successful initiative, they must be recognized and addressed as part of the overall strategy of engagement to assure the appropriate level of buy-in from the associates and management.

5. Lack of Full System Integration

With pilot initiatives there is often a desire to go live with as little capital outlay as possible, attempting to identify business benefit for the least cost. After all, this is a pilot. One element that is often stricken from the pilot budget is fees related to full system integration.

Examples include:

• Direct tie into POS to launch the application
• Direct 2-way access between pilot initiative and other systems – (i.e. POS for client add, client search, etc.)
• Push task capabilities from current Loyalty or CRM system
• Real-time access to product quantities, or product price per store
• Access to data from external sources such as Alterations, Sends,UPS, FedEx, etc.

While lack of integration is unlikely to prevent achieving some level of success for the pilot, there are significant shortcomings inherent in not performing this work, and this should be recognized as a potential impediment to seeing all of the benefits. While it is often not possible to give the associates everything they want on the first day, it is critical that associates understand the long-term intent for the clienteling application and to have some visibility into the roadmap for the future. These system-related issues cannot become excuses for associate to not use the solution.

Perhaps more importantly, lack of full system integration does not provide a completely valid test in comparison to the solution that will be rolled out. Since in most cases, the final solution is to be fully integrated, such a pilot initiative is not reflective of this end state. While it is true that a partially integrated pilot solution should show even greater results once fully integrated, there is a risk of less than optimal pilot results without approximating a final roll-out environment whenever possible.

6. Unmanaged Change / Lack of Program Design

While listed as the sixth potential pitfall, unmanaged change can be the most important item on the list. It is last only as it encompasses aspects of nearly every other item mentioned before it.

Possibly more than any other initiative in retail, successful Clienteling is rooted in cultural change. The change required comes in the form of what is done, how it is done, and how it is managed. While many top associates understand the benefits to clienteling, and likely perform certain best practices today, Clienteling is about institutionalizing core best practices in a manner that is manageable and measurable. It is a combination of process and practice re-engineering.

Without proper change management in place, any pilot is likely to meander; producing less than the desired tangible results. In a worst case scenario, resistance and/or complacency from the stores may become so great that the pilot never truly gets off of the ground. In this situation the retailer is left with very difficult decisions about how to proceed – knowing the benefits of Clienteling, but not being able to prove the results.

While the above five potential pitfalls will impede successful cultural change, even if all five of these have been sufficiently addressed, change will not happen without effective execution.

In general, any change management program must answer three fundamental questions:

1. What are the specific goals?
2. What activities will accomplish these goals?
3. What are potential impediments, and how do we address them?
4. How will associates be engaged, and buy-in accomplished?

Without first answering these questions, the retail organization is failing to lay down the appropriate foundation to develop a plan. Without a planned, measured approach, execution will be ineffective and change will not happen.

Inadequate cultural change management is most frequently a result of insufficient planning and execution of one or more of the following:

• Communication – what is to be communicated, to whom, when and how?
• Training – what will be trained to which segments of associates, at what time, by whom, and how? 
• Monitoring / Feedback – what will be measured, by which method, provided to whom and in what time intervals? What are follow-up measures based on various metrics? How are people recognized, rewarded or held accountable?

Clienteling is all about change management. A complete change management program must be created before attempting to go live in the stores.

Conclusion

Pilot initiatives have very valid business goals and are based on sound business reasons. Unfortunately they are also faced with unique challenges, and if not managed properly are likely to generate less than desired results. Avoiding the six most common pitfalls can assure a successful pilot that generates significant, tangible results. The six pitfalls to avoid include:

1. Lack of Executive Sponsorship / Involvement
2. Lack of Defined Goals and Measurements of Success
3. Inadequate Resources, or Authority/Accountability Disconnect
4. No Mitigation Strategy for Potential Impediments
5. Lack of Full System Integration
6. Unmanaged Cultural Change / Lack of Program Design 

By avoiding these pitfalls through effective change management program design, a retailer can effective manage the activities of the associate, and attain the final end results they desire.