FOR EXPERT COMMENT: Keeping Holiday Customers Merry is Essential

MU professor says high customer satisfaction, not bargains, is key to important holiday sales season

November 15th, 2010

The views and opinions expressed in this “for expert comment” release are based on research and/or opinions of the researcher(s) and/or faculty member(s) and do not reflect the University’s official stance.

By Brad Fischer

COLUMBIA, Mo. – Soon after Halloween, retailers put up Christmas trees and red trim next to cardboard cutouts of Frosty, Rudolph and Santa. These familiar symbols of the holiday season signify the most important time of the year for retailers: when the yearly bottom line can go from negative to positive in a matter of a few weeks. Although bargains dominate holiday advertising, a University of Missouri marketing expert says retailers should focus on more than just bargains when trying to attract customers and drive sales during the holiday season.

“Stores can attract and maintain consumers by offering quality products,” said Christopher Groening, assistant professor of marketing in the MU Trulaske College of Business

. “However, they have much more control over customer service than product quality. Customers that are satisfied are more likely to spread the word, purchase more items and purchase more expensive items. This is especially important around the holiday shopping season because customers purchase more during this time than other times of the year.”

Groening says while there is a segment that cares only about low prices, many consumers focus, at least partially, on customer satisfaction when deciding where to shop. He says customer service starts before the customer drives into the parking lot. Keeping lots clear of snow, offering valet service and providing a welcoming atmosphere are a few pre-purchase considerations important to maintaining high customer service. Once inside the store, lines must move quickly and staff should be friendly and knowledgeable. After the purchase, consumers look for ease of returns and staff to answer questions about items. The same holds true for internet retailers, which need easy-to-navigate websites, secure checkout systems, clear return policies and package tracking.

Groening has a few tips to help stores stand out during the holiday season. He says companies should attempt to achieve customer “delight,” meaning customers are more satisfied than they expected to be. Stores can do this by doing something unexpected, such as giving small coupons as customers enter the store, or offering other unexpected perks such as free gift wrapping or hot chocolate. However, the best ways to obtain customer delight are by doing things tailored to the individual needs of a customer. For example, a consumer looking for a certain shirt size that was unavailable at one store location could be delighted if the store called other store locations to find the correct size and then made it available for pick up at the store location closest to the consumer. This type of experience will help produce a delighted customer, one that is more likely to return as well as tell their friends about their shopping experiences.

He says stores should focus on dealing with dissatisfied customers as well. If a store does nothing to help the dissatisfied customer, the store may lose the customer forever and increase the risk of negative word-of-mouth. He advocates a standardized process for dealing with dissatisfied customers to make sure that their problems are dealt with quickly and in a satisfactory manner from the customer’s viewpoint.

Groening is an assistant professor in the University of Missouri Trulaske College of Business. His research focuses on customer service and satisfaction. Prior to earning a master’s degree and doctorate from the University of Pittsburgh, Groening worked for nine years at several multimedia start-up companies in Silicon Valley. Groening also has published research about customer satisfaction in the Journal of Marketing.