Elaine Fogel

Don’t Forget Customers During Organizational Change

Customer Scrabble cubesMost smaller businesses and nonprofits exist to serve their customers. But sometimes, they take their eyes off the ball during organizational change or growth. And, that’s not a good thing.

The customer experience is a key factor in building brand loyalty for any organization. Every brand touchpoint must offer a positive, exceptional experience. When that experience is lackluster or inconsistent, the risk for customer attrition rises.

Case in point:
Ross Stores. Even though I don’t often write about B2C retail marketing, this company’s situation is a perfect example of what not to do during change or growth.

According to Hoover’s, “Ross operates about 1,125 Ross Dress for Less and dd’s DISCOUNTS stores that sell mostly closeout merchandise, including men’s, women’s, and children’s clothing, at prices well below those of department and specialty stores. While apparel accounts for about 50% of sales, Ross also sells small furnishings, toys and games, luggage, and jewelry.”

Ross is an S&P 500, Fortune 500 and Nasdaq 100 company headquartered in Pleasanton, California, with fiscal 2012 revenues of $9.7 billion! The chain - located in strip malls in some 30 states, mostly in the western US, and Guam - targets 18- to 54-year-old white-collar shoppers from primarily middle-income households.

One thing about me… I love a bargain, and so, I had been a regular Ross shopper for years. (Notice that I used the past tense.) Why don’t I frequent Ross Stores much anymore? Because the customer experience declined so badly, it isn’t worth my time.

When I first shopped there, the shelves were filled with decent merchandise at rock-bottom prices. I always walked out with a few bargains every time I visited. But, that ended about 2-3 years ago.

Now, the shelves are sparsely filled. On some displays, products are separated by a foot of empty space. And, it’s not because items sell out quickly.

The company published a long list of risk factors in its recent “Forward-Looking Statements” that include, “higher than expected inventory shortage.” The company is also re-purchasing its common stock, “obtaining acceptable new store locations and improving new store sales and profitability, especially in newer regions and markets.”

In spite of its challenges, the company has managed to grow its 2013 first quarter by 12%!  All that’s well and good for shareholders , BUT my customer experience has been lackluster and disappointing for a long time.

Now, you can’t argue with success, right? But, isn’t there a risk that the stores’ poor customer experiences will catch up and cause customer attrition? Unless, there’s a major change in inventory management, I believe that’s a real possibility.

So, what’s the lesson here?

As organizations experience change and growth, it’s important to ensure that excellent customer experiences are maintained. It’s easy to get distracted managing change, but without loyal customers, the changes may lead to downfall.

The jury is still out on Ross Stores. We’ll have to see what transpires over time.

Have you experienced lackluster customer experiences at Ross Stores? Other businesses? When do you decide to walk away?

4 Responses to Don’t Forget Customers During Organizational Change

  • Ok so I work for Ross and I must agree with everyone. I have been sexually harassed (and I’m a Guy) called there alert line and had co-workers that heard and let management know it was true. Do u know instead of letting the Guy go they promoted him! Are you for real ross? Today I got a write up because my service is not fast enough( I have a medical condition) I kindly reminded the store manager of my condition and that 87% out of 90% it dam good! As far as other complaints like calling new customers to the register while the current one is still paying is indeed very rude but we are required to do so per upper management. Also we do not get breaks as required by law management will fix the punches to make it look like we did. I know the 40 plus employees in my store (some employees for 15-20 years) all hate our jobs, pay and half-ass policys in place. If Ross can’t or wont change we are set to try and get a union in place! Upper management needs to stop placing blame for there mismanagement and listen to there employees and customers. I work in LA and right now we don’t even have HR dept. Pathetic!

  • The next day, I returned to Burlington again and the same lady recognized me! I have gone to many Ross stores in different cities, like Hialeah, North Miami Beach, Pembroke Pines etc., and I must say that the city with the poorest customer service is Ross. They all have careless staff. I have had many poor experiences at almost all of the Ross stores I have visited. So, it is not so much the city the store is in; it is the actual Ross company investors and owners who apparently do not care. At the end of the day, it all triggers down from above.

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