Do you do business with the public?
Do you have brick-and-mortar stores? Do you get your revenue from a lot of small customers who have face-to-face encounters with your lowest-paid staff? Do you have a competitor across the street who sells pretty much the same thing you do?
If so, take a good look at those lowest-paid staffers. As far as your customers are concerned, they are the company. Their encounters with your salespeople/waitresses/associates largely determine their expectations about your firm ... and my customer's set of expectations about my firm is ... my brand! To get to the point, those front-line people are part of your marketing mix, whether you realize it or not.
What brought this up was an article in the 12 August 2008 Wall Street Journal, page B1 in the recycling-box edition, regarding Circuit City. Perhaps you didn't realize they were still in business, but they are, sort of. Finding themselves unable to sell big-screen TVs, CEO Philip J. Schoonover is trying to sell the company. I'd ask to see the warranty.
How have they handled their sales clerks? Well, in 2003, they laid off many of the best-paid people. The ones with the highest commissions, meaning the ones who did the best job selling stuff. They did it again in spring 2007, apparently figuring that customers were educating themselves about the products before coming to the stores, so they didn't need knowledgeable folks to explain the offerings and hold customers' hands. Result? Many, many reports of Circuit City salespeople who are too new and inexperienced to give advice. Customers who knew exactly what they wanted bought it from Target or the lowest-price online dealer, and the rest went to Best Buy. Circuit City reported losses for Q3 and Q4 of 2007, while Best Buy had a very merry Christmas. Blockbuster offered to buy them earlier this year, but withdrew the bid after they got a good look at CC's books. Now Schoonover, who got a raise in 2007, is trying to salvage what he can.
Rather than getting obsessive with cost cutting, they needed to decide how to position Circuit City against their competitors. Then figure out how to recruit, train, and retain a sales force that will be consistent with that positioning. What they've got is a setting that says "We're a step up from Wal-Mart" and sales clerks who say "We don't know any more than the Wal-Mart clerks do". It doesn't work.
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