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Undercover Boss – Office Depot

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Office Depot is undergoing a transformation. And it all started with a baseball cap.

Kevin Peters, CEO, spoke at the recent Forrester Customer Experience Forum 2011. As the new CEO, he had a mystery on his hands. Sales were declining but customer satisfaction was high and trending up. It just didn’t make sense. So he decided to do a little research of his own. Dressed in jeans and a t-shirt and, yes, a baseball cap, he visited 70 Office Depot stores in just a few weeks.

The visits were unannounced and Peters spent time observing and talking with customers from the parking lot to the aisles of the store and as they were checking out. Here are some of the lessons he learned during his undercover project:

1. Spend enough time in your business to know what it is like to be a customer. By donning a baseball cap and visiting stores unannounced, he was able to observe and converse with customers. He learned what was important to them and what they expected of his business. Making a personal connection with customers was Peters’ secret weapon; maintaining that connection is his mission.
2. Ask customers what they want. And sometimes you get an earful! Peters found out that many of his customers were responsible for small to medium sized businesses. And their time is valuable! So, they want to get into the store, find what they need, receive great service and get back to their own customers!
3. Measure the right things. CSAT was declining and Office Depot didn’t even know it. By measuring the wrong things, the company achieved a satisfaction score that had nothing to do with actual customer satisfaction. Office Depot asked its mystery shoppers to check the cleanliness of the floors and the availability of paper supplies in the bathrooms. They were not measuring what was important to the customers including whether they could find products on shelves, if there were enough staff people to assist when there were questions, etc.
4. The journey towards customer satisfaction and loyalty has no end. Customer needs and preferences change. The only way to keep the business responding to those changes is by knowing the customer. And the only way to know the customer is to keep talking with them and asking the right questions.

Cross-departmental teams are working diligently on the Office Depot transformation. The inventory delivery method has been changed so store team members do not have to leave the floor to accept delivery. Now the entire delivery is electronically checked into the store and team members can stock the shelves when they are not serving customers. Store signage has been completely redesigned and number of products stocked has been decreased, making it easier and faster to find the items needed. One of the most ambitious initiatives has been changing the way employees are selected and trained. And, of course, Office Depot has revised the questions asked on the customer satisfaction survey!

And when Kevin Peters was asked about his customer loyalty philosophy, he smiled and said, “We need our customers more than they need us – we best act like it!”