What is the price for a loyal client?

I think many businesses [and law firms] are shooting themselves in the foot when they cut corners on the wrong stuff. For example:

450hg_out_marshall1Discount stores like Marshalls, TJX and Ross are perfectly positioned for a recession when discretionary dollars are tight. The other evening the mid-town Miami Marshalls was teeming with shoppers sorting through tons of new, deeply discounted items. I was one of them. After selecting my purchases I stood in the check out cue behind 10 other shoppers. There were 4 cashier stations at the check out area. There was one cashier. She was at the last cash register. The line snaked along the empty stations where there was empty counter space. I observed four of those ten customers reviewing their purchases while waiting in line. During the wait each set down on the empty counter space at least two or more items they decided not to purchase. These were not ten-cent candy bars. As far as I could tell there was probably at least $200.00 worth of merchandise left behind. Why didn’t Marshall’s management pay another minimum wage cashier that night? Who knows? Probably cutting back on staff costs? How smart is that? Let’s do the math.

I imagine that over the course of 4 hours that night they lost at least $800.00 of sales. Four hours for an additional cashier at $6.50 per hour is  $26.00. $26 minus $800.00 is $772.00 of additional revenue for the evening. I’m sure they have their reasons.

I should also mention that the lonely cashier was neither efficient nor pleasant. In fact she was absent mentally from the whole scene. Of course she may have been aggravated by the fact that management did not give her support, yet I couldn’t help but think that she should be happy to have a job and happy that the store had customers to keep her at work.  If management were paying attention to their staff, encouraging them and teaching them the value of each customer instead of just signing the paycheck, wouldn’t that be a windfall for everyone? [Rhetorical question.]

I left the store with my purchases and a sigh. The whole experience was almost depressing. Finding a bargain used to be fun. Of course I don’t expect a discount store to offer outstanding customer service or care in good times or bad times, but what if they did? How would that impact success?

Is Marshall’s just short sighted or is the model broken?

So, what’s my point? People may not initially contribute to the bottom line, they’re overhead, but they can and should contribute to the top line, revenue. What is the difference between a barista at Starbucks and a cashier at Marshalls? Not the pay check. It’s in the brand and the brand is set by management. I have to say that with a few exceptions, the service I receive at Starbucks, anywhere, anytime, is usually outstanding. I spend $4 dollars and get better service than when I go to Marshalls and spend $50.00. What’s up?

I think, and I could be wrong, but aren’t law firms also shooting themselves in the foot by cutting staff at a time like this instead of paying attention to people –both customers and staff? Isn’t this the time law firms should be paying extra attention to the brand? Are they?

With fewer dollars to go around, all businesses need to change their thinking. What part of the law firm business model, besides billing, needs reinvention? Are they forgetting the people factor? Not just the client, are they paying attention to staff? Are they investing in training and rewards with the dollars they saved by the cutting?

Cutting back on staff definitely impacts the morale of the people who get to keep their jobs. Can they still smile and be enthusiastic workers? Or have they become sullen in fear that they are next? Is my job safe? Is your firm doing anything to motivate and reward loyal employees for the benefit of your clients?

Changing the customer care model –retaining staff to keep the client experience high, may create a bump in the beginning.  But, I believe that if you engage them in building a loyal client base the revenue meter would jump (up).

Sure, law firms may have the product people want and need in a recession, just like the discount store, but people still have a choice of which law firm or discount store to go to. If others are like me, we want to shop where someone is not only good at what they serve up, but are paying attention to the simple things; a smile and a little enthusiasm. It doesn’t cost anything to the bottom line, but oh how it can impact the top line.

What can you do to improve employee morale in times like these, beyond the paycheck? Penny for your thoughts.

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