Why Staples Refuses to Sell Computers to Customers

Why do some Staples employees refuse to sell computers to customers who don’t want to buy warrantees? That’s right, it appears that Staple’s employees use what they call “walking the customer” out of the store if they aren’t willing to buy a warrantee or other extras with a computer.

Shall we blame the employees? No! As I describe in The Six Laws of Customer Experience: employees do what is measured, incented, and celebrated. This is a breakdown of the system, not the people.

When a situation like this happens, leaders need to ask themselves: what are we doing that is causing this type of behavior? In this case with Staples, the behavior seems to be driven by a goal for each store to have an average of $200 of add-ons (including warrantees) for every computer that it sells. This goal puts pressure on store managers and employees that translates to pressure on customers and, at least occasionally, to a downright refusal to sell computers.

Here’s what the New York Times uncovered from Staples employees:

The average needs to be $200. In other words, each time you sell a computer, you need to sell, on average, $200 worth of other stuff. And that average is carefully tracked. Sales staffers who aren’t meeting their goals are coached, and if that doesn’t work, she and other employees said, there will be disciplinary action that can lead up to termination; underperformers can also end up with lots of night and weekends shifts or even a reduction in scheduled hours.

Unfortunately this situation is not uncommon. I was recently at an Enterprise Rental Car where an employee kept trying to sell me additional insurance. After I rebutted his first few offers, he got more and more ornery about it and kept trying to make me feel like an idiot for not taking the insurance (which I knew that I did not need). I’m pretty confident that his behavior was driven by some sales incentive/program.

Companies often create goals that make perfect sense at corporate headquarters. $200 per computer or an increase in car insurance probably generates nice looking numbers in a spreadsheet. Why not set it as a goal? Why not hold managers and employees accountable? It’s great for our bottom line and it seems so reasonable…

What’s missing from the equation is an understanding of the environment that these decisions create. Every incentive or goal that you place on an employee must interact with every thing else you want them to do. When you overemphasize a goal (like $200 per computer), then you are asking  the organization (maybe not explicitly, but quite adamantly) that it should forget about some other goals and focus on this one. If it’s hard to sell $200 of extras per computer, then the organization figures out how to reach the goal by not selling computers if the customer doesn’t want a warrantee.

Staples and Enterprise Rental Car are pretty well run companies. They just forgot the 5th rule of customer experience…

Employees do what is measured, incented, and celebrated.

The bottom line: Make it easy for employees to do the right thing

About Bruce Temkin, CCXP
I'm an experience (XM) management catalyst; helping organizations improve results by engaging the hearts and minds of their employees, customers, and partners. I enjoy researching and speaking about these topics. I lead the Qualtrics XM Institute, which is the world's best job. We're igniting a global community of XM Professionals who are inspired and empowered to radically improve the human experience. To achieve this goal, my team focuses on thought leadership, training, and community building. My work is driven by a set of fundamental beliefs: 1) Everything starts and ends with human beings, so you need to understand how people think, feel, and behave; 2) XM is a discipline that needs to be woven throughout an organization's entire operating fabric; and 3) Building the XM discipline requires a combination of culture, competency, and technology.

7 Responses to Why Staples Refuses to Sell Computers to Customers

  1. Jeff Toister says:

    Wow! I hadn’t heard that story before, but it sounds like a doozy. Your analysis of the situation is spot-on too. In a strange twist on the age-old principal-agent relationship, the employee is really a double agent. If they do what’s right for the customer, they’ll get in trouble. Yet if they do what’s right for the company, they’ll probably irritate the customer. I devoted a whole chapter to this concept in my book, Service Failure, and discovered that the employee’s decision often comes down to the relative consequences of displeasing each principle. In this case, as you point out, angering a customer is a better alternative than losing your job.

    Thanks also for the link to your free e-book. I’ve downloaded it and look forward to reading more.

  2. Sheri says:

    “Behavior that is rewarded is behavior that is repeated”. Since customers are the ones that really determine whether or not the company stays in business then the “behavior” that is “rewarded” should be based on proven behavior that promote exceeding the customer’s experience each and every time they enter the store. Customers don’t buy from people they don’t like or feel that care more about company profits than their needs as a customer. Period.

  3. Larry says:

    Great article Bruce. I have experienced exactly what your saying with Enterprise. It is a great company overall except this area. I get a little stomach ache during the initial process when getting a car. They are really pushy and get visibly upset when you refuse the insurance or fuel top off. I do not use Staples after a couple of bad experiences with them buying office products. I use a locally owned family ran company that gives great service.

  4. Interesting… Enterprise is known for their simple customer sat surveys and the negative behavior seems to be widespread… odd that it hasn’t been identified and coached out of the business. Long term impact of continuing down this path will be very bad for business.

    At least Staples is tracking results (vs. activity). Too many companies track metrics that mislead them into a false sense of security? Here are a couple I encounter regularly…

    (1) Mean Time to Repair and Average Speed of Answer
    (2) Call Duration

    More here about measuring what matters… http://bit.ly/sfQiNZ

  5. Stephen Waybright says:

    I have never seen a performance metric yet that can’t be distorted in some fashion to lead to very undesirable behaviors, and some are flat out terrible.

  6. Bob K says:

    I long ago stopped renting cars from Enterprise – not for the insurance hustle (I’ve found many firms do this, and that a firm “F*CK NO” usually nips it in the bud); rather, it’s their over-long checkout ordeal (the escort out to the car, the walk-around-to-check-for-damage foolishness, the nine signatures required, yada yada). Precisely what I don’t want after travelling all day.

  7. Jeff Toister says:

    This story has stuck with me a month later. I referenced your post in a recent one of my own about the dangers of “Spreadsheet Jockeys,” a term I use for executives who manage solely by data without spending time observing the operation to see what’s really happening.

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