Subscribe to my Feed
« Will airline mergers improve customer service? Probably not … | Home | Is anyone else sick of spin? »
Signs of business failure come as no surprise
By Lauren | April 21, 2008
Worried about how the nation’s economic woes will affect your bottom line? Check out AOL’s recently-posted list of companies identified by customers as most likely to fail if you’d like a quick recipe for how to avoid crashing your business.
Personally, I disagree with AOL’s decision to put Starbucks on the list. Yes, the coffee giant has probably opened about as many retail venues in the U.S. as it can; between its own stores, kiosks and the supermarkets, there can’t be many malls or airports left in America that don’t offer consumers a way to get that kick of mega-voltage caffeine. There’s also no denying that Starbucks’ coffee is more expensive than the competition. But Starbucks has many advantages: prime locations, solid if occasionally slow customer service (that Starbucks is working hard to improve) and, above all else, really good coffee for those of us who like to be awakened with a hard shake in the morning. Even though the frothier – and pricier – concoctions at Starbuck’s have become an easy target for the finger-pointing Puritans among us, I can’t imagine America giving up its mega-mocha-caramel-latté anytime soon.
Otherwise, however, it’s easy to see the consistent patterns in how the companies on AOL’s list are making customers uneasy. Cheesy, outdated merchandise, slow, rude or nonexistent customer service, empty shelves, dirty stores and inadequate temperature control are dead giveaways that a retailer is threatening to give up the ghost. And those signs can quickly become self-fulfilling prophecies. Given a choice, consumers will almost always be willing to pay a little more to shop in a clean, comfortable, and well-stocked establishment with a sufficient number of pleasant and well-trained salespeople. They’ll avoid sickly, depressing businesses like the plague.
If we tumble into the recession that the pundits are predicting, retailers may leap to cut corners on the theory that lower prices will lure customers to their doors. My guess is that doing so will almost always be a mistake. Despite what some economists say, price is not the only factor in a purchasing decision, especially when the product in question can be picked up more cheaply on the Internet (as so many products so frequently can). People may be buying a little less, but that doesn’t mean they’re going to settle for shabby surroundings and shopworn merchandise. If anything, retailers’ best strategy to weather the economic downturn will probably be to slap on a fresh coat of paint, be more selective about the merchandise they stock, and train their sales team to perfection. The better the shopping experience, the more loyal customers are likely to be.
Topics: Business Ethics, customer relations |
April 21st, 2008 at 10:52 pm
[...] The Business Ethics Blog wrote an interesting post today on “Signs of business failure come as no surprise” Here’s a quick excerpt…”
April 22nd, 2008 at 6:52 pm
I agree with you. I find it very difficult to believe that Starbucks was added to the list.
April 23rd, 2008 at 1:36 am
Dana, thanks for writing in. I mentioned Starbucks to several friends just to get their reaction. They all agreed that there are too many Starbucks stores and that the coffee is embarrassingly expensive, but everyone also agreed that the product is a good one. My guess is that Starbucks will be with us for a while.