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So This research goes back gosh 10 years to uh when I was working with Sergey nison who was then a faculty
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member at Warden now at ncad and Sergey and I were in touch with some retailers who collected customer satisfaction
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survey data when you left the store you were given the opportunity to fill out a
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survey and they had millions of responses on these surveys and we're wondering what to do with that
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information and so what we proposed and they liked was that we would correlate how and customers would rate a
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retailer on a 10-point scale that if a retailer store in a month was getting tens uh versus another store that was
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getting sixes did you see a difference in Revenue so did doing good by your customers meant you did well on the
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sales line what that correlation showed was that there were four factors that stood
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out as important for these retailers m not apply to all retailers but you could think about what matters to you when you
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shop number one most important could you find somebody to help you number two if
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you found someone were they knowledgeable and number three could you find what you came for and then number
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four when you wanted to pay for it was the line at checkout of reasonable length on three of those four factors
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if we wanted to tell a retailer how to do better uh there was lots of research available so a lot of theory about
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inventory that would avoid stockouts that would mean people found what they came for queing Theory could keep line
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links reasonable but on employee knowledge there was nothing really that we could
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say there was nothing we knew about the theory of employee knowledge or how to develop
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it and then um gosh two years ago I was actually visited at ncad working with s got
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contacted by a company called experticity um and what they did was develop uh training modules for brands
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that would be taken by retail Associates their first customer I think was Northface and other outdoor product
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brands that put tons of energy into developing great products and felt a lot of that energy was neg
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by store associates who couldn't explain the features of this great new product
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they develop so at the point we uh Tu with experticity they were working with hundreds of Brands thousands of retail
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stores and hundreds of thousands of store associates were taking their modules um and they had happy customers
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uh they felt like they were doing good but they couldn't prove it they couldn't
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prove that if a store associate uh trained on their system that they were more effective and more
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effective would mean uh close more deals with customers sell more product uh than
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the people who didn't train so ser and I uh teamed up with Santiago Galino who was at the time in
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the PHD program at Wharton working with me and some other faculty um San Diego is now on the faculty at Dartmouth tuck
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um and uh we said to experticity okay we'll work with you we can measure the benefit of your training we don't
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know if it's going to be positive or not and it may well be that you're doing
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lots of good but we can't prove it there's lots of instances in life where like an MBA degree you think it's
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worth a lot maybe it gets you a particular job but there's no proof that you perform better on that job um so
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they arranged for us to gather data from a large department store with something
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like 300,000 sales associates over a I think three-year period week by week what the sales was of each sales
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associate and then how much training were they doing uh half approximately half of the Sal Associates did some
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training and you could see they might start that uh the second year in our data set and train for a while and some
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trained a lot some trained a little so you had data on sales and you had data on the level of
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training what that showed was that those sales associates who did any training at
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all the half that trained were 46% more productive 46% more sales per hour than those that didn't
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train now does that prove that experticity is adding 46% value not quite because these people were not
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randomly assigned to training they volunteered and so the act of volunteering means they're they're
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different from the people who didn't volunteer among other things they're
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probably a little more zealous okay so then we looked at how much of that 46% was due to the individual themselves how
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much to training and we could do that because we could compare the individual after they train with before they
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trained and we could compare the individual who eventually trained but before they had any training to those
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who never trained and we found about half of the 46% was due to the individual themselves uh and the other
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half was due to the training so would the other half if they were encouraged to train and and began to do
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so uh increased their sales by 46% we don't know but uh 23% is still a big Improvement so we thought a lot about
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that F and I had an aha moment when I was in the local Suburban single store Outdoor Equipment chain buying a rain
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jacket for backpacking which I do with my son as often as I can and it turns out there's a lot of uh attributes to a
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Rain Jacka number one does it repel water which varies in varying degrees uh how breathable is it what does it weigh
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uh and something like gortex is that really better or is that just a brand this retailer uh carried a broad
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assortment so I could see all of the different versions of those attributes they could explain each and every
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product to me the importance of differences uh and at the end of the day I was felt comfortable buying because I
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felt like I'd gotten the very best train jacket for me uh and on a hunch I said
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hey have you ever heard of a company called experticity and they said oh yeah yeah
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we do their training all the time so the light bulb kind of went off that when a
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customer walks into a store they want to get the right product if the retailer carries a broad
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assortment and the store associate can explain the differences uh in the attributes of the various products so
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that you feel assured that you're buying the right product for for you uh then
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you're going to then they're going to close the deal and you're going to walk
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out having having made a purchase if if not uh you may well want to continue shopping either online or a different
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store there were two things that surprised Us number one was that the magnitude was so big 46% and half of
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that due to training a sales associate who spent an hour on training uh saw a 5% gain so from the
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sales associates standpoint being paid on commission that's huge impactful you
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you take an hour out of your day and you're getting 5% more commission you do
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the numbers and it's tremendously beneficial to a sales associate as well as the retailer uh the other interesting
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surprise was that since all this training is on particular Brands and maybe there were a couple dozen brands
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that the associates could train on we also had sales by brand so we could look at if you trained
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on um brand and XYZ what happened to sales of XYZ we also looked in aggregate what was your
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total training across all brands and your total sales turns out that training on a particular brand you can think
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about what you would guess I know what we would have guessed had no greater impact on that brand than any other
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brand crazy huh we thought about why is that well well when you walk into a store you're you want the associate be
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able to compare across Brands so among other things you're trying to figure out
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what brand you want to get if they train on brand XYZ and they can tell you about
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that that helps you also get information about about brand ABC so apparently just breadth of knowledge that would let
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associate compare across Brands um was a rising tide that lifted all boats well I think the big practical
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implication is that retailers it pays to invest in your people right it pays to have the store adequately staffed uh to
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hire talented people pay them well and train them well um why doesn't that happen I think uh for most retailers the
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benefit of higher Staffing level more talented people that you pay more to and and training is hard to measure and
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often in the future whereas the cost of that is often immediate this month if I have more people I write more checks for
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payroll or if I give people a raise and hire better people I write more checks for payroll um so I think that that
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would be one finding and I think it's broader than just retailers I think it
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applies lots of service industries that uh if you have associate that's dealing with one
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of your customers uh you want that person to be talented and engaging and you want that customer
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to have a good experience you can think about call centers and the experiences we've had which are sometimes good and
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sometimes not so good in call centers seems like the person on the other end of the line is trained to use your name
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four times in one sentence Rachel I'm so glad you called Rachel it's so great to
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talk to you Rachel uh but they don't know answers to your questions so I think that's one clear implication is
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that if you measure the value of investing in your people in this case training it turns out to be much higher
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than people tend to believe uh it's also interesting to me as a business school Professor um you
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know I I'm not sure I could ever measure or approve the value that students have
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gotten out of the courses I teach uh it's a very hard thing to do but in this
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fairly controlled context you could prove that education had a very high positive value I'd like to
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believe that also transfers to Business Schools so showrooming has been in the news
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clearly uh and it's a little odd if you think about it that someone has gotten
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in their car driven to your store walk through the door they're in your crosshairs talking to a sales associate
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they've invested in all of that why wouldn't you have the best chance of
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anybody in the world of closing the deal with them so I had a chance to reflect on this I told my raincoat story where I
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bought one uh because they had what I wanted and could explain it um I went off to buy shoes for
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backpacking uh at another retailer that I won't name fully intention intending
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to buy them there cuz we were leaving in a couple days I needed them right away but uh they didn't have my size I wasn't
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clear even what my size was they couldn't explain differences to me so without intending to showroom them I
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was more or less forced uh to to go back home and and shop online so I ended up buying from zapo because if I wasn't
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sure about my size I could buy two pair and return one so I think an implication
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for retailers is this if your sales associates are well trained and can answer customers
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questions knowledgeably that's one weapon in Your Arsenal against showrooming I think
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customers oftentimes don't intend to showroom but are end up shopping online
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because they get better information online than they're getting in the store
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retailers can defend against that through better training of their sales associates
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