Retail word of mouth killed by value propositions

By Keri Algar

SYDNEY, NSW: Quality customer service by salespeople has been replaced by discounting, as an increase of internet savvy consumers means buyers are already well researched, according to a leading business educator and sales coach.

The trend is reducing long term profitability from word of mouth sales as good customer service is replaced by retail price competition, David Penglase said.

Penglase used major discounting typical of large retail chains like Harvey Norman, Myers and David Jones to make his point.

“When you’ve got so called value propositions like ‘Lower Prices Guaranteed’ and ‘Everything Is Negotiable’, this simply reinforces to salespeople and customers, that it’s all about price and that what you’re buying is a commodity and therefore don’t expect advice, don’t expect an individual and personalized buying experience,” said Penglase.

Speaking to Current.com.au Penglase said retailers need to teach their service staff to be professional advisers, because while customers may be well researched, they are not the expert.

“Information is free, but clients don’t need the information to be regurgitated to them, they need someone to ask better questions of each client’s individual requirements.

“Teaching the client that they should be reaching for the cheapest price is counter what good business is all about.

“My proposition is that retail Australia needs to be training staff to be expert advisors. They need to ask better questions of an individual customer’s situation.”

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