Macy’s Overhauls Customer Service –

Impressive to see that Macy’s is listening to chatter on the on the social and reacting to it. RM

NEWARK, Del.—Several Macy’s sales associates sat in a training room in the chain’s Christiana Mall store recently hashing out sales-floor scenarios. Mary Martin, Macy’s vice president of learning and development, directed the group’s attention to a card at the center of the table with a statistic: Forty-eight percent of Macy’s customer complaints are focused on interactions with sales associates.

The training session is part of a new strategy by the department store to improve its track record on customer service, which in recent years has dented the reputation of the storied retailer, lowered its scores in annual customer service rankings—and most likely slowed growth.

Part of the problem may be attributed to Macy’s Inc. 2005 merger with May Department Stores Co., after which the company struggled with poor customer service as it focused on integrating various regional chains under the Macy’s banner.

“A couple of years ago we had seven different divisions, so we had great service in some divisions and not as good in others,” said Terry Lundgren, chairman and chief executive of Macy’s, in an interview.


Rachel Dodes/The Wall Street Journal

A class of newly hired sales associates learn Macy’s new “Magic Selling” technique in Newark, Del.

Moreover, as the recession wreaked havoc on consumer spending, many leading retailers—including Macy’s—cut costs, closed under-performing stores and invested in technology to improve efficiency, drawing attention away from customer service.

But now, as retailers return to growth mode, the focus has turned to sales associates who operate on the front lines. “We are talking about a cultural shift … becoming more of a growth company,” said Mr. Lundgren.

The new training program, dubbed “Magic Selling,” requires new sales associates to attend a three-and-a-half-hour session when they start at the company, as opposed to watching a 90-minute interactive video in a booth, as they did under the old program.

It also includes seasonal refresher courses and coaching from managers while they are on the sales floor. To monitor their progress and set quantifiable goals, associates receive weekly “scorecards.”

Macy’s has set lofty goals for the program: It should be the biggest driver of an expected 3% growth in fiscal 2011 sales at stores open at least a year, according to Mr. Lundgren. He declined to say how much the program costs, but with 130,000 associates, he says it is “substantial.”

Under Macy’s previous sales training program, associates were given scripted steps in making a sale, such as “smile,” “thank the customer,” and “always say the word ‘outstanding.'”

“Customers were telling us, ‘Stop saying everything is ‘outstanding,'” said Kristen Cox, group vice president of selling effectiveness and store communications.

Under Magic—an acronym which stands for Meet and make a connection; Ask questions and listen; Give options and give advice; Inspire to buy; and Celebrate the purchase—sales associates are instructed to make more natural connections with shoppers.

At the recent session in Delaware, Ms. Martin asked the class what they would say to creatively engage a customer pushing a double stroller containing two loud children.

“Looks like you’ve got your own personal choir following you around,” said Becky King, a fashion jewelry associate. Ms. Martin praised Ms. King for acknowledging the customer in a humorous way.

According to Bain & Co., when interactions with sales associates are viewed by customers as positive, the number of items a customer buys goes up by 50%. “The odds of repeat visits also go up significantly,” said Aaron Cheris, a partner at Bain’s retail practice.

A reputation for shoddy service can be exacerbated by social-networking sites that enable customers to broadcast negative experiences. For example, following a March visit to Macy’s, Mike Culyba, a 37-year-old documentary film editor from Brooklyn, N.Y., wrote on Facebook, “Sorry Dante, but the 9th ring of hell is the Macy’s customer service counter.” On Twitter, Houston yoga instructor Darla Magee wrote, “I remember why I don’t shop at Macy’s or Worst customer service ever.”

“It’s important that we take all comments seriously, both positive and negative,” said Macy’s spokesman Jim Sluzewski, noting that the Magic Selling program has enabled the company to react faster and improve.

There are some early signs that customer service at Macy’s is gaining ground since Magic was implemented, although Mr. Lundgren said the results won’t really be visible until the end of the current fiscal year.

The most recent American Customer Satisfaction Index survey showed that Macy’s made the biggest improvement among department stores in the critical fourth quarter of 2010, with scores up 7%. However, it still lags behind rivals such as Nordstrom Inc., J.C. Penney Co. Inc. and Kohl’s Corp. In the National Retail Federation’s most recent annual survey, Macy’s ranked No. 19 in customer service.

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