Hat Trick

Do you find yourself analyzing businesses you deal with as both a customer and a senior manager of your company? I do, and recently what started as a routine shopping trip became a lesson that company presidents need to remember if they are truly passionate about growing a great business.

Here’s the truth. I made a mistake. While buying several hundred dollars of clothing, I bought a running hat without first trying it on and removed the tag at home only to discover it didn’t fit.  My error opened up an opportunity for the retailer –lululemon - to convert me into an ardent brand fan and customer.  Instead, the experience of trying to exchange the hat for the right size gave up secrets about lululemon management and brought into sharp focus critical lessons about empowerment of employees, real focus on the customer experience over outstanding salesmanship, and missed profit opportunities.

lululemon is a retailer of innovative athletic clothing and gear. Stores are merchandised well with delightful assortments of product.  The store’s sales team is engaging and knowledgeable.  But trying to return or exchange a purchase provides real insight into how the company works.

First, I called to find out lululemon’s return policy and was greeted with a message that in essence said all employees were busy with customers. Leave a message and we will call you back. Translation: They want to control a conversation.

I went to the store the next day, literally with cap in hand, receipt and tag (but not attached to the hat). It was then I learned that the store’s apparel is all merchandised by size except for hats, which are displayed by color, and, mine was the only non-adjustable running or tennis hat. The conversation was simple: I picked up the wrong size hat and I’d like to exchange it.

Upon approaching the sales desk, the no-return policy for hats (and underwear), especially without tag attached, was revealed along with management secrets. I asked where the policy was posted. The response: It’s not, but exists anyway.  After attempting to helpfully prompt the enthusiastic sales associate about exceptions or other options, she said there was no way out. Absent an exchange or refund, I asked if she had a boyfriend she could give the hat to. No.  Another associate? No.  So I just thanked her, put the cap down and left.

Reflecting about the experience, I tried calling the store manager for fun. Seven times the store’s answering machine took my call. To me, this phone answering policy confirmed that lululemon’s management is not focused on creating exceptional customer experience but only generating the illusion of doing so.

Here are suggestions to lululemon’s managers on how to better the company:

  1. Empower employees to build relationships with customers one shopper at a time. It would have been simple to win a raving brand fan by stating the no return policy, then telling me mine was a unique experience.  Take the return, if need be with a restocking fee – the manufacturer most likely has a damage return credit policy so the store would win a fan and be cost neutral.
  2. Manage customer experiences, not transactions. Employees need to be accessible to customers and not hide behind unpublished policies and the digital walls of answering systems for both sales and after-sale service.
  3. Think customer segmentation and behave accordingly. All shoppers are not equal. By analysis, profile heavy buyers vs. price only customers. By asking questions during the sale, customers will open opportunities to sales associates (and the store) for maximizing revenue and profit.

Do you have experiences you’d like to share where you’ve casually analyzed company strategies based on your experiences as a customer?


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