DeMarco's Department Store manager Lauren Brewster's " Wow" moment came when she observed a Chicago restaurant staff's gushing treatment of an international celebrity. "Everyone dreams of that kind of star treatment," Lauren told her assistant, Jack Klein. " Think about it. People brag about their bank or the local bar where everybody knows your name,' or enjoy showing Off a favorite restaurant where the hostess always remembers their favorite table." DeMarco's, like Other upscale department stores, suffered the double whammy of a slumping economy and increased competition from discount retailers and Online shopping. How could the store, the "box," compete, retain its Old customers, and build a Strong future Customer base? "We've always known that it' all about customer service," Lauren said. "But what's so great about grabbing a giant plastic shopping cart and slogging through some giant warehouse in your shorts and flip-flops, and then joining the herd at the checkout? That is not a shopping experience." "And what isn't great about being treated like Oprah from the moment you hit the door until the sales associate swipes your card and hands over something lovely that you just purchased?' Jack asked. Lauren's Idea was store customers receive that personal, upscale, "you're somebody special here" treatment at DeMarco's. Sales associates would raise their Own professional level, regard Customers as worthy of personalized service, and build their Own clientele. As added incentive, the entire DeMarco's sales team was changed Over from hourly pay to straight commission. "Your pay is built through your own initiative and individualized service that makes Customers return to you again and again," Lauren instructed the sales force at the outset of the experiment. The idea intrigued Corporate, which approved a two-year experiment. As expected, the new plan created a minor exodus among those who wanted the assurance of a "regular paycheck." Bur as the program moved through its first year, both store and corporate management were pleased with the overall results. Marketing pushed the new image of elite, personalized customer service, and statements such as "Katherine at DeMarc" helped me select this outfit" or " Damien always lets me know when something new arrives at DeMarco's char he thinks is perfect for me" became the typical boast of savvy shoppers. Now, two years into the experiment, Corporate urged Lauren to submit a full assessment of the program as a potential model for implementation throughout the department store chain. Sales numbers vouched for the overall success, particularly over the last two quarters of the second year. Certain associates, including Katherine Knowles in designer dresses and Damien Fotopoulos in women's shoes, showed significant gains as a result of straight commissions, and sales associates and customers responded favorably overall, urging a continuation of the program. Reliance On commissions inspired these and other sales associates to treat their individual department as if it were their own small business, becoming experts on nuances of merchandise, exploring designs and trends, finding ways to promote their expertise, and building an impressive number of loyal customers, satisfaction level of customers was apparent in the numbers—not only sales numbers, but in repeat business, customer referrals to friends, and customer comment cards, all of which had been tracked since the of the program. The downside of the experiment was that while some associates soared, Others either veered toward an aggressive, pushy sales style or became intimidated by coworkers and teetered, monthly, On the verge of being replaced because they weren't making sales. The once-proud tradition of cooperation among sales staff was, in many instances, being eaten away by relentless competition. Work assignments away from the sales floor were resented. In addition, the managers and sales associates of certain departments, such as women's accessories, complained of lower wages because, as One sales associate pointed Out, "My commission on a $50 belt is nothing compared to Katherine's commission on a $2,800 designer dress. "Resentment was mounting among those who witnessed the extravagant wages of a few. "If we change this program, if we keep straight commission for some and return to hourly pay for others, how does that fit with our new image? Lauren said to Jack. How does it deal with the difference in pay scale? How does it assure us that the attitudes of our sales team and the culture of this store will not return to what we were before-just another store?" Do you think the complaints of lower-paid sales associates are legitimate? Why or why not? How do you suggest that Lauren respond to these complaints, such as the gripe that the system offers few opportunities for large commissions in some departments?

BuyFind

Management, Loose-Leaf Version

13th Edition
Richard L. Daft
Publisher: South-Western College Pub
ISBN: 9781305969308
BuyFind

Management, Loose-Leaf Version

13th Edition
Richard L. Daft
Publisher: South-Western College Pub
ISBN: 9781305969308

Solutions

Chapter 16, Problem 2CFCA
Textbook Problem

DeMarco's Department Store manager Lauren Brewster's " Wow" moment came when she observed a Chicago restaurant staff's gushing treatment of an international celebrity. "Everyone dreams of that kind of star treatment," Lauren told her assistant, Jack Klein. " Think about it. People brag about their bank or the local bar where everybody knows your name,' or enjoy showing Off a favorite restaurant where the hostess always remembers their favorite table." DeMarco's, like Other upscale department stores, suffered the double whammy of a slumping economy and increased competition from discount retailers and Online shopping. How could the store, the "box," compete, retain its Old customers, and build a Strong future Customer base? "We've always known that it' all about customer service," Lauren said. "But what's so great about grabbing a giant plastic shopping cart and slogging through some giant warehouse in your shorts and flip-flops, and then joining the herd at the checkout? That is not a shopping experience." "And what isn't great about being treated like Oprah from the moment you hit the door until the sales associate swipes your card and hands over something lovely that you just purchased?' Jack asked.

Lauren's Idea was store customers receive that personal, upscale, "you're somebody special here" treatment at DeMarco's. Sales associates would raise their Own professional level, regard Customers as worthy of personalized service, and build their Own clientele. As added incentive, the entire DeMarco's sales team was changed Over from hourly pay to straight commission. "Your pay is built through your own initiative and individualized service that makes Customers return to you again and again," Lauren instructed the sales force at the outset of the experiment. The idea intrigued Corporate, which approved a two-year experiment. As expected, the new plan created a minor exodus among those who wanted the assurance of a "regular paycheck." Bur as the program moved through its first year, both store and corporate management were pleased with the overall results. Marketing pushed the new image of elite, personalized customer service, and statements such as "Katherine at DeMarc" helped me select this outfit" or " Damien always lets me know when something new arrives at DeMarco's char he thinks is perfect for me" became the typical boast of savvy shoppers. Now, two years into the experiment, Corporate urged Lauren to submit a full assessment of the program as a potential model for implementation throughout the department store chain. Sales numbers vouched for the overall success, particularly over the last two quarters of the second year. Certain associates, including Katherine Knowles in designer dresses and Damien Fotopoulos in women's shoes, showed significant gains as a result of straight commissions, and sales associates and customers responded favorably overall, urging a continuation of the program. Reliance On commissions inspired these and other sales associates to treat their individual department as if it were their own small business, becoming experts on nuances of merchandise, exploring designs and trends, finding ways to promote their expertise, and building an impressive number of loyal customers, satisfaction level of customers was apparent in the numbers—not only sales numbers, but in repeat business, customer referrals to friends, and customer comment cards, all of which had been tracked since the of the program. The downside of the experiment was that while some associates soared, Others either veered toward an aggressive, pushy sales style or became intimidated by coworkers and teetered, monthly, On the verge of being replaced because they weren't making sales. The once-proud tradition of cooperation among sales staff was, in many instances, being eaten away by relentless competition. Work assignments away from the sales floor were resented. In addition, the managers and sales associates of certain departments, such as women's accessories, complained of lower wages because, as One sales associate pointed Out, "My commission on a $50 belt is nothing compared to Katherine's commission on a $2,800 designer dress. "Resentment was mounting among those who witnessed the extravagant wages of a few.

"If we change this program, if we keep straight commission for some and return to hourly pay for others, how does that fit with our new image? Lauren said to Jack. How does it deal with the difference in pay scale? How does it assure us that the attitudes of our sales team and the culture of this store will not return to what we were before-just another store?"

Do you think the complaints of lower-paid sales associates are legitimate? Why or why not? How do you suggest that Lauren respond to these complaints, such as the gripe that the system offers few opportunities for large commissions in some departments?

Expert Solution

Want to see the full answer?

Check out a sample textbook solution.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.

Chapter 16 Solutions

Management, Loose-Leaf Version

Additional Business Textbook Solutions

Find more solutions based on key concepts
What are the benefits of retaining customers?

Foundations of Business (MindTap Course List)

Explain the purpose of the work sheet.

College Accounting, Chapters 1-27

YIELD TO MATURITY AND YIELD TO CALL Kaufman Enterprises has bonds outstanding with a 1,000 face value and 10 ye...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Contrast a win-win negotiator with a win-lose negotiator.

Purchasing and Supply Chain Management