Posted by: Matthew Molinari | June 14, 2012

M,N,O,P, Queue

One of the biggest influences on customer service is how your customers perceive their time spent interacting with your business. The most basic economic theory of trade revolves around one simple idea. In order for trade to occur, two parties must mutually benefit from a transaction in which both give up something in order to obtain something else.

For many people, money might be the first thing that comes to mind. You give up a few dollars and you get a cup of coffee. However, there are other items of value that customers must weigh in order for them to determine the full cost of the transaction. If I have to wait for 15 minutes for that coffee chances are my perception of value is going to decrease compared to if the transaction had only taken 30 seconds. I gave up the same amount of money but with my schedule, I’ll typically value 15 minutes wasted in line more than $2 spent on coffee. Actually, even if the manager recognized my long wait and gave me the drink for free, I would still feel as though I lost on the transaction. The lesson? Never underestimate the value of your customers’ time.

I think this is one of the biggest complaints I have about Costco because despite everything they do well, their check out lines are always a mess. In fact, I wrote about how good Costco is at pretty much everything but for some reason they refuse to address the line issue. I really find it odd because you never see these long lines at a normal grocery store and a full cart at Costco doesn’t have nearly as many items as a full cart at the average grocery chain because of the size of the items. On top of that, Costco isn’t bagging – they are “boxing” – which is much less time-consuming especially when you consider many of the items don’t even get packed, they simply go right back in the cart (or never even leave the cart depending on the size).

If you want to get super technical there are different ways you can determine how long a customer will wait in queue depending on how many employees you have working. There’s a pretty straight forward explanation here and the overall goal is to find an equilibrium where customers aren’t spending too long in line but you aren’t having to have 3 people staffed when 2 would do. The key is to maximize the benefit for both you and your customer so that they leave satisfied and you can still make a profit on your product.

The easy solution is to always have every register open with enough staff on hand to service the highest level of demand at all times. Unfortunately, unless your staff is willing to work for free that probably isn’t going to work out very well for you. In the end, it is all about balance but if it were up to me I would always err on the side of caution. It is much better to have that extra person and not need them for part of their shift than it is to have customers get frustrated and leave. In those cases, you not only lost a sale that day, you more than likely lost a returning client who could bring repeat business to you.

How much emphasis do you put on the queue in your business and what are some ways you combat long wait times?



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