Staples Makes Selling Look Easy
An "easy" button. Wouldn't it be nice to have one? When the going gets tough, just press the "easy" button and all of life's problems disappear.
Staples (SPLS) hit just that nerve when it launched its red "easy"-button ads last year. In less than two years, the ad is striking a chord with folks of all kinds and is already reaching mini-cult status. For instance, Pittsburgh Steelers' coach Bill Cowher handed out "easy" buttons to his players prior to the team winning the Super Bowl in January. And during election campaigning earlier this year, Canada's New Democratic Party leader Jack Layton bought an "easy" button to symbolize his election message. "This large red button, an 'easy' button,…[is] the foundational tool for our vision of free health care, free energy, and an end to poverty, disease, and war," Layton said during the campaign.
At the office-supplies retailer Staples, the "easy" button certainly doesn't promise free health care and an end to poverty. But it has become the guiding compass of its corporate and retail culture. Not only does it symbolize customers' needs but it has also led to innovative products at Staples. At a time when customer service has become a hot topic from Wal-Mart Stores (WMT) and Target (TGT) to Best Buy (BBY) and J.C. Penney (JCP), Staples couldn't have chosen a better brand-message than making it "easy" for customers (see BusinessWeek.com, 11/21/06, "Customer Service Back in Style").
The results have been good. In the third quarter ended Oct. 28 Staples' net income rose 29% to $290 million, on a 12% increase in sales to $4.8 billion. Its comparable-store sales increased 4% over the third quarter of 2005, and the chain has managed to grab market share from its competitors. Staples is the leader in office supplies in the U.S., with 7% market share, and the company is growing at a double-digit rate while its major competitors grow in the low single digits. "We have to continue to differentiate our brand in the minds of our customers, and we have to continue to drive market-share gains by winning with more customers in more places," says Ron Sargent, chief executive of Staples since 2002.
Consumers seem to be responding. Consumer-satisfaction rating firm J.D. Power and Associates has recognized various units of Staples for providing what it calls "outstanding" customer service. One of the tests J.D. Power—which, like BusinessWeek, is part of the McGraw-Hill Companies (MHP)—used to rate Staples consisted of randomly surveying Staples customers who contacted its call centers.
Focusing On Service
Since 1986, when Staples was founded in Framingham, Mass., the chain's fundamental lure was always to provide the cheapest office supplies to customers. The new focus on "easy" meant changing how the company and its stores functioned. "After 15 years we realized low prices weren't enough—we identified that the key to really differentiating ourselves was an easy shopping experience," says Shira Goodman, executive vice-president for marketing at Staples.
Staples first focused on speeding up checkout for customers, offering easy rebates (for which shoppers can log on to a Staples Easy Rebates Web site), and guaranteeing that the stores would never be out of stock on ink.
The next step was focusing on store employees. "We really changed the staffing model and got associates to be less focused on tasks and more focused on service," says Goodman. The company even pinpointed ways to help employees better serve customers. "Instead of 'Can I help you?' our associates are trained to say, 'What can I help you find today?'" says Goodman. The store employee then walks the customer over to the product and uses that time to engage with the customer and learn about the customer's other needs, which could help the employee cross-sell other items in the store.
Such specific guidelines are very important when it comes to customer service. After all, unless clear-cut ways are outlined concerning how employees can serve customers, it's hard to roll out such plans in retailers with multiple locations like Staples, which has 1800 stores and 69,000 employees. "Defining key activities—from the first hello to the thank you, come again—and training employees is key to executing a good customer-service strategy," says Eric Nelsen, a director in the customer experience group at Mercer Management Consulting. In fact, Nelson notes that most stores fail in customer service because they haven't explicitly identified the key components of faster and friendlier service.
At Staples, this focus on making it easy for customers led to a reversal in customer perception. Prior to implementing these strategies last year, Staples received eight complaints to every compliment. Today, the company's stores receive twice as many compliments as complaints from customers. In its quest to ease up customers' lives, Staples even started developing its own products. Two recent innovations: a one-touch stapler, which Goodman promises people can use with just a pinkie; and a combination lock which uses letters, so people can unlock it with an easy-to-remember word, instead of a series of numbers. "People say:' Wow, that makes it so much easier'," says Goodman (see BusinessWeek.com, 8/24/06, "Circuit City's Secret Service Plan").
As for the "easy" buttons, Staples started manufacturing them after customers started asking to buy them. "It is exactly what people wanted in life—simplify and make things direct and easy," says Joyce King Thomas, chief creative officer at McCann Erickson, the advertising firm that created the marketing campaign. So far, Staples has sold 1.5 million buttons and donated $2 million of the proceeds to the Boys and Girls Clubs of America. "Most important for us is that defining it as the 'easy' button really reinforces the concept of 'easy' internally—our front-line associates are jazzed up about 'easy'," says Goodman.
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