An article that is very interesting from office depot CEO on
how it made no sense on why their mystery shopping scores
were high but their sales were declining...and what he did
to figure out why...

I can think of a dozen companies off hand that fall into this boat...

I posted the relavant part of the long article here since the full article
is not available for free to the general public

"Office Depot's President on How "Mystery Shopping" Helped Spark a Turnaround"

The Idea:

The office products retailer was measuring customer service using metrics— such as the cleanliness of bathrooms—that didn’t drive sales. Its new president is trying to fix that by retraining the staff and transforming the company.

When I became the leader of Office Depot’s retail stores in the United States, in 2010, the first thing I tried to do was figure out the meaning of a puzzling set of facts. Our sales had been declining, and although that’s not unusual in a weak economy, they had declined faster than the sales of our competitors and of retailers in general. At the same time, the customer service scores our third-party mystery-shopper service was reporting were going through the roof. This didn’t make any sense. How could it be that we were delivering phenomenal service to our customers, yet they weren’t buying anything?

To understand these contradictory data points, I decided to do some mystery shopping myself. I didn’t wear a suit. I didn’t wear a blue Office Depot shirt like the ones employees wear in all our U.S. stores. Instead I wore a faded pair of jeans, a T-shirt, and a baseball cap. I didn’t tell anyone I was coming to visit, and in most cases I didn’t let anyone know afterward that I’d been in the store. What I wanted was to experience Office Depot in the same way our customers do. Over the next several weeks I visited 70 stores in 15 or more states.

At each location I followed the same routine. First I pulled into the parking lot and just watched customers go in and out for a few minutes. When I went into the store, I’d spend 20 to 30 minutes observing what was going on. I’d talk to customers, in the aisles and as they were leaving the store. Some of the most interesting conversations took place when I followed people out who weren’t carrying shopping bags and asked them why they hadn’t bought anything. Some of them gave me an earful.

I could tell you a lot of stories about the things I saw, but two scenes stand out in my mind. In one store I watched an employee argue with a customer about whether or not we carried a calculator that her son needed for first grade. An employee arguing with a customer—it was unbelievable.

At another store, I parked and saw an associate leaning up against the brick facade smoking a cigarette. Meanwhile, customers were walking out without any bags. This employee did nothing—he just watched them leave empty-handed. At that point I had a tough decision to make: Should I blow my cover and alert the store manager, or should I stay silent? I sat in the car a few minutes, thinking it over. Finally I decided, I just can’t let this go.


continued next post

I went into the store and looked at the stanchion that stands at the front of every location, displaying the name of the manager and his or her picture. Guess who the store manager was? Yes—the guy smoking outside the store. So I went up to him and introduced myself, and we had a good long talk. He was ashamed of his behavior—and he was sweating during the conversation. He promised he’d do a better job of taking care of customers, and I promised to keep in touch. Even today we exchange e?mails every month to discuss his performance.
Get In, Get Out

During most of my visits, though, I managed to stay incognito, and I came away having learned a big lesson: Our mystery-shopping scores were correct. You know what was flawed? Our scoring system. We were asking the wrong questions. We were asking, Are the floors clean? Are the shelves full of inventory? Are the store windows clean? Have the bathrooms been cleaned recently? Think about that for a moment: How often do you go to the bathroom while shopping for office supplies? It turns out that customers don’t really care about any of that. Those factors don’t drive purchases, and that’s why our sales were declining. It would be easy to blame our associates for ignoring shoppers, but under the system we’d built, they weren’t doing anything wrong. They were doing exactly what we’d asked them to do—working to keep stores clean and well stocked instead of building relationships with customers.

My conversations with customers gave me three insights into how we should transform our business to become more competitive: One, we had to reduce the size of our stores. They were too large and too difficult to shop in. Two, we had to dramatically improve the in-store experience for our customers. That meant retraining our associates to stop focusing on the things our existing system had incentivized them to do and focus on customers instead. Three, we had to look beyond office products to provide other services our customers wanted. They wanted copying, printing, and shipping. They wanted help installing software and fixing computers. We needed to expand our offerings if we were to remain relevant to our customers.

------
Many people think that in order to improve service, you need to hire more frontline workers. But in fact, by finding ways to reduce the time employees spend on functions such as stocking shelves, we’ve been able to repurpose their time for selling to customers. Each of our stores employs 18 people on average; by finding ways to work smarter, we’ve been able to save 80 hours a week—the equivalent of hiring two full-time salespeople but at no added cost.

Once our associates had more time to serve customers, we needed to ensure that they knew how. We simplified our sales process from five steps to three—it’s now called ARC, for “Ask, recommend, and close”—and trained them to implement it. We taught them to ask customers open-ended questions. Our research indicated that in certain departments—such as furniture—sales go up by more than 100% when associates with really good product knowledge are assigned to those zones. So in addition to sales training, we invested in product training.

-----
As we work to make these changes, I still try to visit our stores as frequently as possible. It’s really the only way you can know how your business is doing. You have to see how customers are being treated, and you can’t rely on reports or scores or hearsay—you have to experience it yourself. If you think your company is doing well with customer service, ask yourself, Am I really sure? Do I know what the customer experiences?

What I pay attention to most of all is how many people are leaving the store without a shopping bag. I’d be glad if people came to our stores to browse, but this is not a browsing industry—people are shopping with a very specific purpose in mind. If they don’t make a purchase, something has gone wrong. If we can reduce this “balk rate” by just 10%, it will have a meaningful impact on both our top-line revenue and our margins.

You also have to make sure you’re measuring things that really matter to customers. I can tell you from firsthand experience what happens when you measure the wrong things. I always try to remember that we need our customers more than they need us—and we’d better act like it.



Edited 2 time(s). Last edit at 06/30/2013 01:38AM by techman01.

Great article, thanks for sharing.

I'm sure I'm not the only one who has asked myself, "Who gives a rat's whisker about THIS?" while doing a shop. Nice to see one CEO walked the mile in our shoes to realize how silly some of these things can be that they demand their employees do.

Recently I was on an Ace Hardware shop, where the emphasis is on fast greetings and asking what they can help you find. I came in the south door and the cashier at the north register, who was in the middle of ringing out another customer, interrupted his transaction to call across the lobby to me, "What can I help you find today?" So I cross over to the register, told him what I needed, he picked up the phone, called someone to ask what aisle the stuff was in, told me, and then went back to the other customer.

Any guesses on how THAT customer would have rated the service that day? But he got an "A" on my report for jumping through the required hoop, no matter how counter-productive it was to do so.



Edited 1 time(s). Last edit at 06/30/2013 04:40AM by itsasecret.

I have shopped an Office Depot competitor and I can always count on never being offered assistance, no matter what time of day I shop.

I have seen a new concept Office Depot and they have really streamlined the stores and have a totaly different layout than their traditional stores.

Great article. I hope MSC's use it when sitting down to design evaluation.

I have _never_ asked myself "Who gives a rat's whiskers" about _anything_, but I sure will from now on!!!!!!

That's brilliant! =D

itsasecret Wrote:
-------------------------------------------------------
> Great article, thanks for sharing.
>
> I'm sure I'm not the only one who has asked
> myself, "Who gives a rat's whisker about THIS?"
> while doing a shop. Nice to see one CEO walked
> the mile in our shoes to realize how silly some of
> these things can be that they demand their
> employees do.

My experience at Office Depot was a negative one.

I was supposed to ask the cashier a question...She never looked up at me, she never offered a warm greeting and when she had to point out where something was, she acted like I was seriously bothering her..

About OP's story: The store manager leaning against the wall smoking... has a MORE serious problem. His store is screwed up, his employees insolent to customers, nobody gives a damn.

He really DOES NOT care what happens in his store, so that's why the store is in a dive-bomb-nose-dive to it's inevitable spiral death of profit loss.

I am really surprised the CEO let the lazy store manager feed him a line of Bull**** and his "promise to improve." Too LATE. Your store is already trashed. Time for new help.

I really, truly have to commend the CEO for looking beyond the metrics. So often, corporations get caught up in Mandates From On High that look good on paper but are asinine in practice. Things like hounding a customer to sign up for a store credit card, making it difficult for a customer to get help, making the employees work so fast that CS and accuracy go down the drain. I really feel for cashiers who are supposed to ask the customer three times to sign up for a store CC, even if they are told no, even if they are cussed out the 1st time and the verbal abuse gets worse from there. I honestly am pretty sick of seeing employees punished for making customers happy by violating rules set up by uber-rich suits who are out of touch with reality. This article made me happy - and I bet it had a positive effect on the employees too.

For the record, my husband's company is one that pulls asinine games--management gets a better bonus for screwing over the customers, and the front line workers are the ones who have to take the abuse from angry customers.

Corporate America is a pretty sore subject, I apologize if I got too ranty.

I just had a flashback to something that happened when I was working in Grocery (main office management level, not in the store). I went shopping in one of our stores, had a FULL CART of groceries, over $100 worth, and there was a marked down package of meat with a $2 off coupon because it was on its pull date. Because those coupons had often ended up coming home with me unapplied, I had pulled it off and handed it to the cashier to make sure I got my discount.

Because she hadn't pulled it off herself, she didn't want to take it. Mind you, she had just rung up over $100 worth of groceries for me. I finally told her to get a manager. (She and the manager did not know I worked in the corporate office; I always shopped anonymously.) The manager told her to feel the package for the coupon's backing and IF SHE FOUND IT she could honor the coupon. (Otherwise, I suppose I would have been told to pound sand.) Of course she found the backing.

I went back to work the next day and wrote an anonymous letter to the VP of store operations, commended the cashier for doing exactly what she had been taught to do and for remaining polite throughout, and told him that this was no way to treat a customer who had just rung up over $100 of groceries. I told him that if I didn't work there, I would have been shopping at a different grocery store the next time because I didn't appreciate being treated like a thief. Was a $2 discount worth pissing off a good customer?

Well, they couldn't respond to me because they didn't know who had written the letter (it shouldn't have mattered if it came from a management member or the guy in the mail room so I kept it a secret and never told anyone about the incident). But my jaw almost fell on the floor about two months later at our next annual managers' meeting when the CEO announced a new "employee empowerment" policy in which employees were told that "you can never make a mistake if you make a decision in favor of the customer."

Sometimes you can train your employees to bankrupt your company.

Ha ha, I guess that was my first "mystery shop" report. Never thought of it that way.

Itsasecret, that is AWESOME.

Just yesterday I was in a BIG BOX lumber store...not the one mentioned above....I had been in 2 days earlier buying some cabinets.....BIG signs clearly stating they were 20% off...I reaffirmed with the salesman (men) that were NOT helping us one bit with them....yep on sale. get to the register and thought the total was too high...NOT ONE rung up on sale....she had to call, give them the #s and they gave her the correct price. Went in yesterday to get the last one I needed....SAME THING!!! The cashier said "oh I remember you guys from the other day"....so I asked why they didn't fix the glitch....her answer...."because when they go off sale they could get left in the computer on sale"!!! so in other words if you don't keep your eye on us we will screw you over and not think one thing about it!

Gotta watch that shrink.....

Obviously, the written word hasn't gotten to our Office Depot, yet.

I ran out of ink for the printer and had to go there to purchase some. I sure wasn't going to drive 15 miles back home, load the ink and print out the paper's that I needed to do two shops, that day. I thought ahead. Load those printouts on a flash drive and take it with me, in which I did. Then, just have them print up the copies from the flash.

Let's see, the new ink cost me around $12. How much did they want to charge me per copy? Try, 60 cents each. I needed eight copies, twice - two different printouts, which would total 16 copies.

No, I did not have them print up the copies at those prices. Unfortunately, they have the market pinned in my area as Staples closed their doors a few months ago.

I purchased the ink and was mumbling to myself as I passed the cashier; she interrupts my thoughts with: you really should buy a printer.

60 cents for black and white copies?

I worked for Office Depot one summer, and can share some personal insight. Office Depot does not train their employees, at all. You are a glorified "stocker". You are given so much crap to put on shelves that there is no time to get it all done. You are told to "Put the customer as number one", and when you do and those load of carts of merchandise do not all get put up you get reamed a new one. So, people ignore the customers, actively! The customer is ignored, but by God that merchandise gts put up!
Office depot has great merchandise, and I shop only there even after working there for a summer. But they are medieval in their unsophisticated approach to customer service. And you better sell an extended warranty on anything!

Don


techman01 Wrote:
-------------------------------------------------------
> I went into the store and looked at the stanchion
> that stands at the front of every location,
> displaying the name of the manager and his or her
> picture. Guess who the store manager was?
> Yes—the guy smoking outside the store. So I went
> up to him and introduced myself, and we had a good
> long talk. He was ashamed of his behavior—and he
> was sweating during the conversation. He promised
> he’d do a better job of taking care of
> customers, and I promised to keep in touch. Even
> today we exchange e?mails every month to discuss
> his performance.
> Get In, Get Out
>
> During most of my visits, though, I managed to
> stay incognito, and I came away having learned a
> big lesson: Our mystery-shopping scores were
> correct. You know what was flawed? Our scoring
> system. We were asking the wrong questions. We
> were asking, Are the floors clean? Are the shelves
> full of inventory? Are the store windows clean?
> Have the bathrooms been cleaned recently? Think
> about that for a moment: How often do you go to
> the bathroom while shopping for office supplies?
> It turns out that customers don’t really care
> about any of that. Those factors don’t drive
> purchases, and that’s why our sales were
> declining. It would be easy to blame our
> associates for ignoring shoppers, but under the
> system we’d built, they weren’t doing anything
> wrong. They were doing exactly what we’d asked
> them to do—working to keep stores clean and well
> stocked instead of building relationships with
> customers.
>
> My conversations with customers gave me three
> insights into how we should transform our business
> to become more competitive: One, we had to reduce
> the size of our stores. They were too large and
> too difficult to shop in. Two, we had to
> dramatically improve the in-store experience for
> our customers. That meant retraining our
> associates to stop focusing on the things our
> existing system had incentivized them to do and
> focus on customers instead. Three, we had to look
> beyond office products to provide other services
> our customers wanted. They wanted copying,
> printing, and shipping. They wanted help
> installing software and fixing computers. We
> needed to expand our offerings if we were to
> remain relevant to our customers.
>
> ------
> Many people think that in order to improve
> service, you need to hire more frontline workers.
> But in fact, by finding ways to reduce the time
> employees spend on functions such as stocking
> shelves, we’ve been able to repurpose their time
> for selling to customers. Each of our stores
> employs 18 people on average; by finding ways to
> work smarter, we’ve been able to save 80 hours a
> week—the equivalent of hiring two full-time
> salespeople but at no added cost.
>
> Once our associates had more time to serve
> customers, we needed to ensure that they knew how.
> We simplified our sales process from five steps to
> three—it’s now called ARC, for “Ask,
> recommend, and close”—and trained them to
> implement it. We taught them to ask customers
> open-ended questions. Our research indicated that
> in certain departments—such as furniture—sales
> go up by more than 100% when associates with
> really good product knowledge are assigned to
> those zones. So in addition to sales training, we
> invested in product training.
>
> -----
> As we work to make these changes, I still try to
> visit our stores as frequently as possible. It’s
> really the only way you can know how your business
> is doing. You have to see how customers are being
> treated, and you can’t rely on reports or scores
> or hearsay—you have to experience it yourself.
> If you think your company is doing well with
> customer service, ask yourself, Am I really sure?
> Do I know what the customer experiences?
>
> What I pay attention to most of all is how many
> people are leaving the store without a shopping
> bag. I’d be glad if people came to our stores to
> browse, but this is not a browsing
> industry—people are shopping with a very
> specific purpose in mind. If they don’t make a
> purchase, something has gone wrong. If we can
> reduce this “balk rate” by just 10%, it will
> have a meaningful impact on both our top-line
> revenue and our margins.
>
> You also have to make sure you’re measuring
> things that really matter to customers. I can tell
> you from firsthand experience what happens when
> you measure the wrong things. I always try to
> remember that we need our customers more than they
> need us—and we’d better act like it.

My wife has worked for almost 18 years for OD future merger partner. I suggest the OD prez talk to people like her if he wants real answers. But I doubt if he really wants the truth.

Edited 1 time(s). Last edit at 07/04/2013 01:40PM by imagator.

@Strevel Office Depot is hardly medieval. You may have worked there for a summer, yet I worked there for a little over a year in the early 2000s. I started there as my first job out of the military in their furniture department, and rose to the ranks of assistant manager prior to going into another field. While you are correct in saying that OD has merchandising responsibilities where all employees do a level of stocking (to include those in the computer department), yet the company does do training. And how do I know this? Well geez, I did the training! There were also two other assistant managers that did training, along with the manager and one of the senior leads.

The business model for OD may have changed some in the last 10 years, yet it mainly has to do with doing more tasks with less employees. A typical store nowadays may have 15-20 people tops (including the copying division), with 50-60% made up of part-timers. This also helps to keep the costs of goods down for more people to afford.

I respect your opinion, yet that is what it is: an opinion. If you don't know what you are talking about on the subject matter (in this thread, you don't), please be respectful enough to the other posters on the thread by not pretending that you do.

Thanks.

I love the article and totally agree that some of the mystery shops I do are not capturing a lot of the pertinent information. I can't tell you how many times I have been the customer who is at the register when the cashier stops to help somone else. Very annoying.

There are some restaurant shops that focus 100% on customer service and don't seem to want to know that their food is horrible. If I have great service and horrible food, I am not going back. If I have great food and horrible service, I may or may not go back. I might just try to get a different server the next time. But if I go and get horrible food AND horrible service, I am definately not going back for a very long, long time, if ever. And it will require a substantial coupon to get me back in after I have had enough time to get over the last experience.

Really great stuff techman!! Thanks for sharing.

Interesting article. I have done this type of shop and shared this type of information and had my report rejected. It's as if sometimes they only want a good report or else will find a way to not use your report.
Just my observation with office supply shops.

I read this with great interest.

I am a merchandiser, doing work for computer hardware + software companies as well as other products in Office Depot stores. One of the OD stores I visit regularly (once a week) became a nightmare because of the behavior of the manager and his staff. The manager and associates had begun to carry walkie-talkies to communicate with each other instore. The manager was always running around the store in a tizzy, sweating profusely - obviously very agitated and nervous. His employees were constantly looking to see where the manager was lurking.

As I was doing my merchandising work I observed that the manager would speak into the walkie-talkie: "Mike - female customer wearing blue shirt is in pen display on aisle 7 - get your ass over there and help her." Or: "Steve - customer in yellow shirt entering store. Follow and assist."

This was ongoing to the point of being intrusive to the customers and, frankly, disturbing. He was also rude to me and refused to cooperate with my audits (which he was required to do). He was also making me wait for up to 30 minutes to sign off on my reports. This is so unacceptable. I'm there to help his staff and him, and am representing major suppliers of his store.

So I finally approached the manager, who I've known for about a year, and told him that I'm sorry he's so stressed out. He told me that he could not speak with me because HIS manager was in the parking lot spying on him and counting the number of customers coming through the door. He looked like a heart attack waiting to happen.

The result of this punitive behavior is that I saw many customers leave the store annoyed that they were being followed and that store associates were hovering over them, when all they wanted to do was buy a pen or a mouse pad or something else that didn't require intense customer service.

Also, this is a fairly quiet store, and the walkie-talkies are LOUD! Customers can hear themselves being described and hear the orders to employees.

One customer turned to me in the aisle and asked me, "Do I look like I'm about to steal something?"

Based on my experience in this store, Office Depot has no clue - regardless of what this CEO seems to think of his "enlightenment." He's causing more problems than he is solving.

Wow. Interesting perspective. And a merchandiser in the store for a half hour or more is going to see a lot more than any one customer or a mystery shopper. Maybe you should write that up and send it to the "enlightened" CEO.

I personally find it annoying as hell when workers harass me, even just with a greeting, as I walk through a store. I'm an introvert. I don't WANT to talk to people in a store. If I want help I'll be looking for THEM. I don't want them bugging me when I'm trying to remember what I need to get. It was a bit of an eye-opener for me when I started mystery shopping and found out they were under orders to do that. Why would a company order its people to be annoying? If I want attention, my body language will make it clear and I'll be looking around for a red shirt. If I'm looking at the ground I don't want to be bothered. Since somewhere around 25-40% of us are introverts, that's a lot of customers they're bugging under the belief they are being helpful.

Interesting...it was funny somewhat unrelated but not really. We went out to a very upscale restaurant down at the Jersey shore last night...have been there before, food is good, service was good. Ugh, food was decent last night, service was just awful. That is really the worst. Not that you don't want good food but when your service is awful it doesn't matter how good the food is...I just would never ever go back there. Kind of sad because we have enjoyed it many times previously. Service is a big to-do for me.

Complain to the management, maybe they'll comp you a return visit. It could have been a fluke, maybe someone didn't show up for work and they were having to cover a vacancy. If they're normally good, I'd give them another chance, but let the manager know you were disappointed. I'll bet he'll make it right for you.

The most important thing to get a return on is your time.
---Mark Cuban
The only thing more important then money, is more money.

I beg to differ with Mark. To me the most important thing to get is a return on the effort you make making relationships and helping people. I retired a few years ago. It was difficult. My customers did not want me to retire. When I mentor I do not insist or demand or take a "my way or the highway" attitude. I let time prove me right!

Money will come and more money will come by applying entrepreneurial principals I was taught when I was as young a four years old. The first principle was literally, "There is no such thing as a free lunch" There must be an exchange of value. If you give and do not get in return you are a chump! People are taking advantage of you. You can not "buy" friends or customers. The moment you stop buying is the moment those people will move on.

If you respect the customer you help them get what they want. What do people want? They want to be respected, they want to exchange reasonable value for reasonable value. They do not want to be abused or cheated. You can offer any product or service but when you offer it with the idea of helping and respecting your business or personal partner they will respect and help you by continuing the relationship. If it is a business relationship you get free (which really is not free because you have to earn it) "word of mouth" advertising. If it is a personal relationship you get happiness when you exchange happiness.

When you practice this and teach this to others amazing things happen. People start talking about you to their friends. People love to tell others about a good sale at the store or a good picture at the theater and a good merchant that can be trusted.

Like Kenny Rogers sang. "You got to know when to hold them, know when to fold them, when to walk away and when to run. You must cut the negative people who will not exchange a fair value with you.

I created a value. Before I could sell that value I had to explain to people what that value was and why it was better than what they were doing. I had to get others (“copy cats”) to offer that value properly without cheating or abusing the business partner (the customer). Just me offering the value would not make the value popular or common place. I mentored "copy cats" to perform the concept without cheating or abusing people. The concept is popular and common place.

It is easier to "work" at keeping customers happy than finding new customers when you scam them. When you scam people they tell other people to avoid you. That makes it more difficult to find new people to scam.

I am impressed with the awakening of some of the management identified in the posts. Also, I am appalled at some of the instances of neglect and policies that make the staff inept. I hope this article 'Opens the Eyes' of Corporate America.

I've often thought that the questions asked on the mystery shopper forms were written by people who were a bit out of touch with reality.

I have done some gasoline station shops here and there. I was once doing a reveal shop at a place that was obviously a tow truck/mechanic type place. It was a place where people brought their cars to be fixed or their cars were towed there to be fixed. Selling gasoline was very much a sideline for them. Of course, the client on these shops is usually the oil company that sells the gasoline. I can't remember exactly what he asked, but after I had revealed myself, a tow truck driver asked something like, "Well, why do I have to do that?"

I said, "Because somewhere there is a guy with a suit and tie sitting in an office, and he thinks that's what you are supposed to do."

Sorry, fellows, but it is almost always a guy in those offices.

The Office Depot located near me already closed. I never had any problems there, and I have no complaints about the service or the availability of merchandise, but I did notice that the store never seemed to have many customers. I do not know why.

Staples delivers and you can order online?

Maybe instead of mystery shopping their own stores they need to take a look at what the competition does well. I think Staples advertises in a more memorable fashion too.