Rayhaan Kader Assignment RMDP 2014

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Mr. R. Kader ��

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Strategy Alignment �

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TABLE OF CONTENTS ��

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INTRODUCTION �

Alignment of my area of responsibility to the Edcon company strategy is required. As a project manager for Discount Division Operations (Jet, Jetmart & Legit), I have chosen to focus on customer returns which is costing us R 50million annually at cost of the products we offer. Reason for my choice of topic:

1. Liquidity of our company is being affected as we have to pay suppliers R 50million (Liabilities) on products returned by customers that we are unable to re-sell.

2. These liabilities are payable within a 30 day period, hence our cash flow is directly affected in the process.

3. Profitability of our company is being reduced. 4. Employee incentives are affected by the reduced profits. 5. The various departments within our company are working in silos, hence internal

frustration is rife. 6. Stores have no clear directives, processes and understanding. 7. Customer are unsatisfied with the products and services we are providing.

In this document I wish to use a structured approach by applying Systems Analysis, Strategic Alignment, Change Process, Risk Analysis and Research to not only address the above mentioned short comings but also set a platform to mitigate these short comings in future.

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UNDERSTANDING THE PRESSURE FOR CHANGE �

What? We as Edcon (Discount Division) want to improve our customer service in order to sustain growth in our market share, secondly we want to reduce expenditure in order to improve our liquidity as a company and in doing so create a sustainable competitive advantage. Why?

Above the Line stakeholders (Executive Team):

• This equates to R30 million in Discount Division annually at cost in customer returns

and equates to 10% of the respective product sales which only has a 30% input

mark-up.

• Customer satisfaction is at its lowest levels in comparison to the past 5 years.

• Operating leverage is being pressurised un-necessarily though incurring a cost which

can be managed through understanding governance better and servicing our

customers more efficiently.

Lateral stakeholders (Cross-Functional Departments):

By affecting customer returns constructively:

• Customer satisfaction in our service will improve (Customer Services Dept.).

• Positive perception of our business in the market place from our customer will assist

the Marketing Department in strengthening our Brand.

• Finance & Admin departments will receive less queries from stores regarding

charges against their expense line.

• Centralised Store Returns department will be able to stream-line their operation by

reducing the amount of time spent in validating returns.

Below the Line stakeholders (Regional & Store Managers):

• Employees are demotivated and frustrated as they faced with dissatisfied customers

as a result of unclear expectancies, reverse logistics are resulting in additional

expenditure, suppliers are unaware of inferior products (dissatisfied customers) and

this is resulting in the longevity of our business being jeopardised.

• Should we reduce the amount of customer returns, the result will impact our nett

profits directly and increase employee benefits (Increases & Bonuses).

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Contribution of the Discount Division Chain (Jet, JMT & Legit Brands) on the Edcon group equates to 60% of all customer returns as illustrated below:

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TARGET STATE: CLEAR, SHARED VISION A critical requirement for successful change and strategy achievement is for the leadership to have a CLEAR and SHARED VISION of the target state or destination that needs to be achieved. The target state must be: � Clear, specific and measurable. � Comprehended exactly the same by every leader. � No room should be allowed for interpretation – this creates chaos. Organisational Transition Requirements

What will stop and why

(impact and effect)?

What will start and why


What will continue and why


Current process for customer

returns, as this is costing the

company R 50m annually.

New Customer Returns

Process, to improve the current

process and reduce the

negative impact of customer

returns.

Employee structures will

remain unchanged.

Alignment of all functional

departments with reference to

governance. (Operations,

customer services, marketing

and merchandise team)

Our current Systems

Technology is sufficient.

Supplier agreements and

products to be reviewed, to

ensure customer’s

expectancies are being met.

(Quality)

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Strategic Change Alignment

Considering the organisational change and transition – what is the impact/effect on my area

of responsibility?

Area of Responsibility Transition Requirements

What will stop and why


What will start and why


What will continue and why


Current Customer Returns

process will stop at stores, as

the lack of staff knowledge

about how to assist customers

with returns is affecting the

customer experience.

New Customer Returns

process will assist customers

to have a better shopping

experience. Process will

include standardised

documentation, consistent

process between stores,

training (process & technical)

and Governance.

Our staff structure will remain

unchanged as we do have

return’s specialist in our bigger

stores and in our smaller

stores managers will sign off all

returns.

New equipment will be

introduced to assist with testing

products in stores to allow for

customers to receive

immediate service during their

return’s transactions. (Circuit

Breakers multi plugs)

Supplier agreements and

products to be reviewed to

ensure products are of the

standards expected by the

customer.

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Alignment Considerations Impact Status

Ind.

Business unit strategy & values

Operational capacity

� Systems

� Staff competence

� Suppliers and strategic

partners

• Current computer systems will be sufficient.

• Staff competency is good.

• Suppliers have an expectancy of adherence to

their returns policy from us as a retailer, however

they are not aware of all the challenges arising in

stores from our customers.

Business processes &

Governance

Should the status quo of our process be maintained,

we will never address the customer service challenge

or alleviate the current financial costs to our business,

as all the various departments / functions (operations

& customer services call centre) of the business

currently address customer returns in very different

ways. Governance in terms of the way we implement

C.P.A. across the different functions of the business

varies at which point our customer doesn’t receive

consistently good customer service from us as a

retailer.

Budgets In order to monitor and ensure improvement we will

have to ensure budgets/targets are achievable and

stretch us simultaneously.

Standardised / Periodic Reporting Standardised, periodic and consistent reporting will

increase our understanding of customer returns and

allow for us to improve our business decisions, such

as understanding:

• Which stores are performing badly and why?

• Which products are consistently being

returned and why?

• Which time periods do our return’s volumes

peak and why?

Due to the lack of understanding of the above

questions we are unable to focus our resources

constructively to improve our customer service.

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Assessment of readiness of my area of responsibility The graph below represents the various functional areas of our business which are impacted

by customer returns.

Strategies to address business requirements are as follows:

• Distribution Centre’s process to remain unchanged and performance to be maintained.

• Customer services performance and process to be improved.

• Quality assurance (Q.A.) on suppliers to be improved, as only 3% of the total number

of our suppliers are not going through quality checks.

• The main contributing factor to invalid customer write-offs is being generated from

stores, hence our focal point will be operations.

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PERFORMANCE

Great Good

Distribution

Centre

Customer Services

Suppliers / Products

Quality Assurance

Operations (Stores)

Maintenance Strategy

Improvement Strategy

Aggressive Improvement and Change Management Strategy

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As previously highlighted operations requires focus, the analysis below shows that our Jetmart branded stores are the poorest performer in customer returns. Ranking of brands is as follows (annually): Brand Value (mill) % Contr. Jetmart R 22.5 75% Jet R 6.0 20% Legit R 1.5 5% Discount Division R 30.0 100%

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PERFORMANCE

Great Good

Jet

Jetmart



Aggressive Improvement and Change Management Strategy

Legit

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Products offered in a Jetmart store are: 1. Soft-lines (Clothing / Textiles, footwear & accessories). These returns from

customers are currently accumulated at a centralised point and assist us to ascertain quality issues of products in our stores and contributes 0.1% to total Soft-lines sales therefore we are happy to incur this cost.

2. Hard-lines (Appliances, kitchenware, baby feeding, furniture & luggage). This area requires further analysis and is problematic.

3. Cell phones. Although we incur R 500,000 in returns annually, our suppliers indirectly reimburse us for this cost in rebates, due to the volume that we purchase from them and therefore this cost is offset.

Ranking of product types is as follows (annually): Products Types Value (mill) % Contr. Hard-lines R 20.0 91% Soft-lines R 1.5 7% Cellular R 0.5 2% Total Jetmart R 22.5 100%

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PERFORMANCE

Great Good

Hard lines

Maintenance Strategy Aggressive Improvement and Change Management

Strategy

Soft lines

Cellular

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Composition of Hard lines (General Merchandise) is as follows: 1. House branded appliances (Kettles & Irons). 64% of all customer returns is

accumulated from our House branded kettles and Irons, equating to R 19.2m annually.

2. Branded appliances (Kettles, Microwaves & Irons). Currently 98% of customer returns on this product is replaced or repaired by the supplier, hence costs to our business is negligible.

3. Large appliances (TV’s & fridges). Currently 99% of customer returns on this product is replaced or repaired by the supplier, hence costs to our business is negligible.

4. Other Hards (kitchenware, baby feeding, furniture & luggage). These returns from customers are currently accumulated at a centralised point and assist us to ascertain quality issues of products in our stores; contributing a very small percentage to sales, hence we are happy to incur this cost.

Ranking of products is as follows (annually): Products Value (mill) % Contr. House branded App (HBA) R 19.2 96.0% Branded App (BA) R 0.4 2.0% Other Hards (OH) R 0.3 1.5% Large appliances (LA) R 0.1 0.5% Total Hard lines R 20.0 100%

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PERFORMANCE

Great Good

HBA

Maintenance Strategy Aggressive Improvement and Change Management

Strategy

OH

LA

BA

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Customer returns on House branded appliances are affected by the areas listed below:

1. Supplier agreements are in place and effect our business through, quality of the product, returns policy and hence the customer directly. This agreement must be reviewed periodically to ensure alignment with changes in the market place arising from changes in our customer’s needs.

2. Centralised Store Returns department (C.S.R.) is responsible for ensuring they can provide supply chain support for all the returns from customers to stores and back to the various suppliers. (reverse logistics) Although some suppliers are willing to manage this on certain products, all of our hard-lines suppliers prefer that we collate the returns, validate and then pass on returns back to them in bulk. We require improvement here as not all suppliers are collecting valid returns.

3. As much as product quality is the responsibility of the supplier, we are customer facing and therefore we have a Quality Assurance department (Q.A.) responsible for testing that products are of the desired quality for our customers. Improvement required as not all of our house branded merchandise is being tested currently.

4. Processes for all departments must be aligned to the customer expectations especially from the sales assistant all the way to every head office function, otherwise we risk confusing and upsetting our customers. Once customers are disappointed by a brand the chances of us losing them to the competition are not high but rather guaranteed.

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PERFORMANCE

Great Good

Customer Service


Process

Equipment

Supplier Agreement


Execution Strategy

Customer Services

Dept.

Product Quality

Centralised Store

Returns Dept.

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Areas of focus to achieve the strategy:

1. Maintenance strategy:

• Supplier agreements must be maintained in line with business requirements. Business needs will be determined by the customer’s expectation of the products desired by them.

2. Improvement strategy:

• Focus on improving the function of the Centralised Store Returns Department. This department will have to align their current processes to assist the requirements of the various suppliers we transact with.

• Product Quality to be focussed on by Quality Assurance Department. Understanding customer expectations. Aligning their processes and ways of working with both stores and supplier’s to ensure our customer’s needs are at the forefront of their department strategy.

• Customer services department plays a vital role in how our customer experience is affected, as they are contacted by the customer 85% of time when a customer is dissatisfied.

3. Execution Strategy:

• Focus on ensuring the equipment required for stores to deal with customer returns are available.

• Focus on ensuring that our process addresses the needs and expectations of our customers.

• Understanding how we deal with our customers during their product return’s transaction impacts the customer service experience and our business.

The above strategies will assist us in achieving our targeted state of improved customer service and reduce customer returns.

Focus Areas

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LEADERSHIP ALIGNMENT �

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Probability

of Change

Success

Higher

Lower

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RE

STR

AIN

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FO

RC

ES

(Est

imat

ed S

treng

th)

DR

IVIN

G F

OR

CE

S

(E

stim

ated

Stre

ngth

)

Communication Budget

Alignment of departments

Are there strategies in the business case to address these forces?

Informing &

cohesion

Financial Analysis

Stakeholders to have input in the desired methods

of comms.

Staff buy-in

Feedback on challenges raised

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HOLISTIC ANALYSIS – A SYSTEMS PERSPECTIVE Areas that are required to change as highlighted in your performance triangle. Dimension Sub-dimension Strong

/

Weak?

Impact/Effect of weak threads?

Human

Resources

� Retention of staff

� Morale

� Commitment

� Employee turnover

� Employee development

� Staff discipline

� HR systems and

processes

� Communication

� Person-job-fit

Weak

Staff not being equipped with the

following knowledge and skills

regarding customer returns:

1. What are the rules?

2. How do I provide customer

service when a customer

wants to return a product?

The above is causing low

morale, no commitment,

employees feeling undeveloped

and frustrated by the process.

This is resulting in bad customer

service, breakdown in

communication & high staff

turnover.

Leadership

Team

� Competence to deal with

strategy requirements

� Value congruence

� Experience

� Culture of support (team

and others)

� Resilience

Weak The leadership team within

stores and between various

head office departments are all

trying to achieve the strategy

and are operating in silos which

is causing confusion amongst

our staff members. Staff

members are incapable of

ensuring customer needs are

being met as they are too busy

trying to please the various

leaders within their management

structure.

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Dimension Sub-dimension Strong

/

Weak?


Finance � Liquidity

� Cash flow

Weak Liquidity of our company is being

affected as we pay R 30million

for products and thereafter we

carry the loss on valid returns

from customers. In our S.L.A.

with suppliers we are allowed to

return defect products and

receive a credit on our account.

Marketing � Product quality

� Product differentiation

� Market share

� Understanding customer

needs

� Customer service

� Advertising

� Perception of the brand

� Market research

Weak House brands has been

identified as the largest

contributing factor to customer

returns which illustrates that our

customer research is lacking to

understand, what exactly our

customer’s needs and

expectations are. Customer

service is therefore being

compromised, due to lack of

understanding. Perception of our

in-house brand is being tainted

by us, hence the quality and

differentiation of our products fail

in the eyes of our customer.

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Weak?


Operations � Cost of operations

� Processes

� Equipment

� Productivity

� Speed and accuracy of

execution

Weak Invalid customer returns adds

cost to the business and is a

direct loss to the stores; affecting

their profitability and ultimately

their incentives. Ineffective

processes is causing employees

to spend too long trying to assist

a customer and impacts

customer service negatively.

Demotivated staff is causing a

decline in productivity levels.

Management

Information

Systems

� Quality of information Weak Data is currently available,

however not processed into

information; hence no business

decisions are being based on

the trends from our customer

returns.

Customers � Relationships

� Perception of our

service/product

� Perception of experience

to work with us

� Communication

� Understanding of our

customers and their

buying behaviour

Weak Lack of signage in our stores to

inform customers about our

returns policy, limited knowledge

of staff and mixed messages

between staff members and

customers; is causing

customer’s to be unsatisfied with

our products and services.

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Weak?


Governance � Clarity of roles and

responsibilities

� Clear lines of reporting

(channel of command)

� Compliance (rules,

regulations, laws, policies,

procedures, standards,

etc.)

Weak Store managers, specialists and

general staff have different

interpretations of the Consumer

Protection Act (C.P.A) and in

some cases may leave the

company exposed to major

penalties and fines. Roles and

responsibilities are being ignored

due to a lack of a standardised

process.

Suppliers � Speed of problem solving

and decision-making

� Quality of service/products

Weak We as a company are absorbing

the cost of customer returns

which are in some cases due to

quality issues and in doing so

suppliers are unware of the

impact this is having on our

consumer.

Logistics and

Supply Chain

Cost effective

Weak The duty of C.S.R. department is

to consolidate all customer

returns and expedite these

returns back to our suppliers in

line with our SLA, however

currently we add to the cost of

transportation and we are not

being credited by our suppliers

for valid customer returns.

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/

Weak?


Systems

health

• Complexity of problems required to solve daily

• Emotional load – dealing with difficult, demanding people regularly

• Right person for the job (person-job fit)

• Opportunities for growth and development

• Effective communication • Effectiveness and

Efficiency – doing the right things and doing it right the first time.

Weak Due to a lack of knowledge &

understanding, staff are unable

to deal with difficult customers,

service the customer correctly

the first time and are unable to fit

into the job we expect of them.

Structural

dimension

• Equipped with the right resources

• Supported by effective and efficient processes and systems

• Supported by sound governance

Weak Staff are unable to do basic tests

for customers in store due to a

lack of equipment. They are

afraid that should they test a

faulty product, the possibility of

the store’s power being tripped

is high. Due process can’t be

followed as required by C.P.A.

when declining a customer

return.

Customer

interface

• Fulfilment and support of customers

• Information and Insight on our customers

• We know in which areas we can exceed the expectation of the customer and raise the expectations of our competitors in the process

Weak Competitors gain an advantage

over us, as we are unable to

provide customers with the

expected customer service and

disengaged staff are not taking

the time to understand, let alone

service their customer needs.

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Deductions and Conclusions from the above Analysis: 1. H.R.: The people in our business are competent, however they require training,

process and clear understanding; as the lack thereof is causing bad customer service and the company strategy to fail. Employee turnover is increasing at an exponential rate due to unclear directives.

2. Leadership team: We have not equipped our leaders with the knowledge they require.

3. Finance: The major weakness here is that our business is affected financially by us not receiving credits for returns generated from defective merchandise.

4. Marketing: Our stores do not have the signage to support and inform customers of our returns policy.

5. Operations has no process to be followed when dealing with customer returns, therefore there is no consistency in customer service between our stores. Management Information Systems: Data is available, unprocessed and therefore not used in decision making.

6. Customers: Customer confidence is being lost due to the poor customer returns process in our stores and is impacting on the company’s market share. Knowledge and understanding of our customers isn’t at the forefront of our business and contradicts our business values.

7. Governance: Compliance with the C.P.A rules are being applied in some cases by sheer luck and not consistently throughout the business.

8. Suppliers: Although S.L.A.’s with our suppliers allow us to return defective merchandise for a full credit. Suppliers are not provided with customer feedback and as a result they are unable to assist us in improving the products we offer our customer.

9. Logistics & Supply Chain: Cost inefficiencies (Reverse Logistics Costs) are being absorbed by us as a result of not processing customer returns constructively.

10. Systems Health: Confusion and frustration of staff in stores is very high when processing a customer return.

11. Structural Dimension: Stores require circuit breaker multi plugs to test products for customers and to assist with improved customer service.

12. Customer interface: Management at different levels are applying different rules to customer returns, resulting in inconsistent customer service levels.

Graphic representation of our change readiness is as follows:

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STRATEGY TRANSLATION: STAKEHOLDER ANALYSIS

Stakeholder Identification

What do we want from them? What do they want

from us?

Potential to

influence

Importance

Internal

Stores Adherence to process and

improved customer services.

Training,

equipment and

support from all

head office

functions.

High High

Customer

Services

Dept.

Adherence to process and

improved customer services,

which doesn’t contradict with

the store’s customer returns

process.

Training and

support from

operations.

Low High

Centralised

Store

Returns

Dept.

To insure returned products are

transferred back to the

respective suppliers.

SLA with suppliers

to be

communicated to

them.

Low Low

HR Training Availability of staff

from operations

High High

Buyers Understanding of customer’s

needs

Feedback from

operations

regarding customer

needs.

High High

Quality

Assurance

Department

Products to be tested

periodically, to ensure suppliers

receive feedback.

Stores to adhere to

QA process

requirements

High High

External

Suppliers SLA to be adhered to and

product quality to be

maintained as per the agreed

standards

Feedback from

Q.A. dept.

High high

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From the above one can deduce or conclude the following for our change project:

• Store management needs to be supported and ensure that they have a firm understanding of the various customer returns situations which may arise, so as to empower them to manage their business with efficacy.

• HR, QA & suppliers must be collaborated with, on all decisions which may affect them; as they will influence the success of the project.

• Customer Service dept. has enormous power over how our customer service is perceived and therefore we require their buy-in, on the processes which impact customer services.

• C.S.R. department isn’t customer facing and deals with customer returns at the end of the cycle, hence we will be required to monitor this function periodically.

• Last but not least… “The Customer”: This stakeholder as we are aware has the highest power and importance, therefore this stake holder is neither internal nor external but is rather the determining factor to all the other stakeholders in their business decisions.

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STRATEGY TRANSLATION: RISK ANALYSIS �

Risk analysis:

Risk Description Prob. Imp Risk factor Action-/Management Plan

HR allocating resources

for the training sessions. 6 9 54

We will request that HR provide us with a

reasonable timeline to ensure the training is

ready to go live quickly.

Q.A. department, not

having all the

information submitted in

time to HR, for the

training manuals to be

compiled.

2 7 14

Based on the timeline provided by HR above,

we will request that QA advise if these

timelines are reasonable. However we don’t

foresee resistance as this training will reduce

the amount of invalid queries from stores &

suppliers, to their department.

Operations (Store and

Regional Managers 8 10 80

Absenteeism and business demands could

cause operators to be unavailable for the

training.

New Signage

requirements from

Marketing dept. 1 3 3

Signage delivery timelines will not stop the

change of process, as we intend on printing

the returns policy on the back of the till slips

and train staff to make customers aware of the

returns policy.

Additional equipment -

(availability from

supplier) 4 10 40

The equipment required for the new process

can be supplied by a number of agents and

retail outlets, hence the probability of not

receiving the equipment in due time is very

low.

Probability: 1-3 (Low) 4-6 (medium) 7-10 (High) Impact: 1-3 (Low) 4-6 (medium) 7-10 (high)

Risk Factor: Probability x Impact

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Based on the above information, risk management findings are:

From the above one can deduce or conclude the following for our change project (Impact vs. Probability):

• Operations will require extensive management: o Attendance will have to be confirmed a week in advance. o It will be compulsory for a representative to be sent for training, should a

store/regional manager be unavailable and a 1 on 1 session held with them upon their return.

• Management effort required for H.R.: o Timelines for the training roll out will have to be negotiated to ensure that staff

are not pulled out of stores during peak trading times. o Training planned to be approximately half a day for candidates, as this will

reduce costs for both HR and stores and ensure productivity in both areas isn’t affected drastically.

• Management and Monitoring required to ensure that we are able to distribute the required equipment in due time.

• Risk level acceptable in the Q.A. department, however this area should be monitored. • Marketing risks are acceptable and doesn’t require extensive management, feedback

to be provided from the marketing department during the project.

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CRITICAL SUCCESS FACTORS AND OBJECTIVES �

Considerations Critical Success Factors Objectives

Human

Resources

Minimum requirement is that 1 Store

manager, 1 specialist sales associate and

the regional operations manager must be

trained by the end of the training schedule.

To ensure understanding of

the new business process and

to empower all the members

of the leadership team are

able to coach their

subordinates when dealing

with customer returns. In

doing so improve customer

service.

Governance All staff members are to take a 10min. test

on C.P.A. in store within the next 3 months.

This is to ensure that we

understand our customer’s

expectancy of us as a

business and operate ethically

in all our transactions with our

customer.

Marketing Returns policy to be printed on the back of

all till slips within the next 4 weeks.

This will make it easy for our

customer to be informed and

understand our returns policy

in the convenience of their

own time, should need be.

Finance Approval of budget for the additional

equipment and training sessions (new

customer returns process).

Without funds we will be

unable to effect the alignment

of the customer returns policy

to our company strategy.

Equipment All stores must have 1 circuit breaker multi

plug once their training has been

completed. (plan to distribute to store

managers at the training sessions)

Stores will be able to test

customer returns in the

customers presence, so that

the return maybe validated.

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Hence the 2 most important weak threads are:

1. Customer service As we are aware customer service perception of Edcon has dropped 25% with contributing factors such as:

• Customers feel unwelcomed. • Store staff do not know their products. • Staff are unfriendly when processing returns. • Time consuming process to find someone who knows how to execute a return

or alternatively waiting too long for a manager to authorise a return. Research: “Customer service expert advice states:

1. Obsess over the beginning and ending of the customer interaction. Because of how human memory works, you have to get these moments right if you want your customers to remember their time with you pleasantly.

2. Do the hustle. A perfect product, delivered late, feels like a defect. (And the timeline for what customers consider “late” is continually getting shorter.)

3. Offload the transactional–in a way that suits your company’s customer service style. Customers appreciate it when you streamline or automate transactional details, the things machines can do as well or better than humans.

4. Don’t just be good—be memorably good. If you don’t create a memorable experience for your customers, your story won’t spread. Customer service is indeed the new marketing, or at least it is an incredibly powerful support that makes your marketing resonate by matching it with the truth of your business.

5. Learn to apologize. Things will go wrong. (Things will go right and yet customers will perceive them to be wrong–it’s the same thing.) Prepare for this, emotionally as well as operationally.”

Micah Solomon is a customer service consultant and expert, customer experience consultant, speaker and author.

Source: http://www.forbes.com/sites/micahsolomon/2014/06/05/expert-customer-service-advice-5-top-tips-of-all-time/

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“The Zappos Effect: 5 Great Customer Service Ideas for Smaller Businesses

1. Lightning Fast Response Many large businesses do not reply to customer emails. This sort of response won’t fly in a customer-focused ecommerce business. Do your best to provide lighting fast responses to customer questions, comments, or orders. Many small merchants cannot easily afford a call centre, so they rely on email as the only means of customer communication. This is fine, as long as you get right back to the customer. Consider keeping your customer service inbox open all day when you’re sitting at your desk. When an email comes in, treat it like a fire alarm. Also, after hours, have a means of monitoring customer service emails from your smartphone. Define what lighting fast response means in your company — perhaps five minutes or less — and track your response times. You want to get back to every customer before that customer starts wondering what’s going on.

2. Never Argue About Returns Zappos has a 100 percent satisfaction guaranteed return policy. The company will never fuss about any return. In fact, Zappos actually encourages customers to order several products, check them out, and return what they don’t want. Here’s a Zappos-produced video on the company’s return policy.

3. Treat Good Customers Well Another Zappos customer service tactic that translates well to small online retailers is the concept of treating loyal or new customers well. Specifically, Zappos often upgrades good customers to next day or second day air shipping from standard ground shipping. This policy encourages customers and rewards those customers that frequently shop your store. You might also consider offering coupons or other bonuses to your best customers.

4. Expect Problems, Be a Solution Next, expect problems. Remember, you’re selling products via mail, often on images alone. Lots of things could go wrong, from shipping problems to the customer ordering the wrong size. Knowing that there will be problems, you should be prepared to handle them when they come. If a certain type of problem — perhaps packages damaged during shipping or something similar — be sure to take some action to prevent this sort of problem in the future. Customers that have had problems and believe they were treated fairly will often be your most loyal customers in the long run.

5. Treat Customers Like Individuals Finally, learn to treat every customer like an individual with a unique story, challenge or problem. Imagine what you would do if a customer called you and said she had forgotten to pack her favourite pair of shoes.” March 21, 2011 • Armando Roggio Source: http://www.practicalecommerce.com/articles/2662-The-Zappos-Effect-5-Great-Customer-Service-Ideas-for-Smaller-Businesses Deduction: Based on the above research it is clear that as a big business we tend to lose sight of the customer experience and in doing so not only do we lose customers, but we also incur financial losses simultaneously.

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Steps to improve customer service:

� Training of staff on the companies improved customer returns policy. Training should entail:

o Understanding of the various products we offer to all staff members. (Expert knowledge)

o Process to be followed during the returns transaction, to ensure timorous execution of the return. (efficiently and effectively)

o How to communicate with the customer, to ensure that we treat customers as people and not transactions.

o Expect a complaint when a customer wants to return a product at our store, however deal with it as an opportunity to impress the customer.

o Ensure that arguments don’t occur during the return’s transactions.

� Stores should have their Returns policy displayed as instructed (addendum a).

� Stores are to use the defective tag check list (addendum b) when returning a product, as this has 2 benefits namely:

o Customers are assured that we understand what to check for and that we can process their return correctly the first time.

o Allows us as a company to identify quality issues with our products swiftly and initiates discussions with our suppliers swiftly.

Not only will the above assist with alleviating customer & employee frustration, but also allow us to turn a customer return transaction into a pleasant customer experience.

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2. Governance Currently employees complain that customers walk into stores, to return a product and when denied, consumers threaten to contact C.P.A hotline; managers then process the return unwillingly. This illustrates that our store staff do not understand C.P.A. well enough to provide great customer service while adhering to the customer’s rights in compliance with the C.P.A. Research:

“The Consumer Protection Act is here, and if you do not familiarise yourself with it then you may face the consequences. This month we will start looking at the provisions of the Act and explain how they affect businesses and individuals.

The starting point in interpreting and applying any Act is to look at the purpose of the Act. Very few people know that there is already a very well developed system of consumer protection in our Law. This Act came about because of the ignorance of the consumer protection laws in the marketplace on the side of both business and consumers. Companies have escaped liability up until this Act, and now they are all scurrying about to make sure that they comply. The average consumer now has the power to put big business in its place and to demand not only quality goods, but also quality service.

The purpose of this Act is to protect all citizens from unethical businesses who bully people into buying products they do not want or need. If you are an honest trader then you serve the Act, but you must know what the Act requires of you. With some small adjustments to your business you will meet the Act’s most serious requirements and avoid unnecessary and costly litigation.

The purpose of the Consumer Protection Act is to:

• Provide a legal framework

• Reduce the disadvantages of being a consumer

• Promote fair business practices

• Protect against certain defined conduct

• Improve customer awareness

• Promote consumer confidence and responsibility

• Provide for cost-effective and speedy dispute resolution

• Provide a fair system of redress.”

EUGENE BOTHA - SIRDAR LEGAL ASSOCIATE Source: http://sirdargroup.com/tag/consumer-protection-act/

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“Corporate governance is most often viewed as both the structure and the relationships which determine corporate direction and performance. The board of directors is typically central to corporate governance. Its relationship to the other primary participants, typically shareholders and management, is critical. Additional participants include employees, customers, suppliers, and creditors. The corporate governance framework also depends on the legal, regulatory, institutional and ethical environment of the community. Whereas the 20th century might be viewed as the age of management, the early 21st century is predicted to be more focused on governance. Both terms address control of corporations but governance has always required an examination of underlying purpose and legitimacy.” James McRitchie, 8/1999 Source: http://corpgov.net/library/corporate-governance-defined/ Steps to improve governance:

� A module concerning C.P.A. should be included in the training mentioned above. This module should entail:

o Understanding C.P.A. o Knowing the rules of C.P.A in relation to the products we sell. o How to express the C.P.A. rules to the customer without being offensive.

� Ensure that from our marketing materials to our products, that all the various

departments are aligned with the requirements of C.P.A. Departments which need to be aware of their role in C.P.A. are:

o Suppliers - products must be of the required standard. o Marketing - marketing materials in store has to comply with the C.P.A. rules.

(such as our returns policy) o Customer services - as this department is our system of redress, which is

required in the rules of C.P.A. “Provide a fair system of redress.” o Store staff - last but not least, as they are the face of the company, when a

customer walks into our store. Compliance to the C.P.A. is personified on our sales floor by our store staff.

Based on the above research; the link between our 2 threads is undeniable, namely: customer service and governance. Corporate governance isn’t just about financials but also about our customers and employees and “Yes” in South Africa we have the C.P.A to promote customer confidence in retailers and service providers. This has always been our aim in the retail industry. C.P.A. isn’t an obstacle but rather a set of rules in the game of retail which allows us the opportunity to exceed customer expectation. �

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CONCLUSION �

Customer service is what defines retail, we can’t afford to have customers returning their purchases from us on the current scale which we are experiencing, as this could cost us more dearly than we think. A proposed project timeline and cash flow analysis, of the change project required to improve our customer returns policy for Discount Division in Jetmart stores illustrates that with a minimal investment of R 410,000, we can potentially reduce the cost to the company by R 3 million conservatively within the first financial year. (Refer to addendums c & d) In the words of Sam Walton (founder of Walmart): “There is only one Boss. The Customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” Based on the above strategy alignment analysis / exercise: I know that this project will assist our company’s liquidity, cash flow, profitability and customer service; which will improve the platform of Edcon in the market place. �

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Rayhaan Kader Assignment RMDP 2014

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