The Bunker Blog

Without customers, no business can survive, let alone grow. When it comes to loss prevention, it is sometimes difficult to maintain a focus on customer service. This is due to a couple of things. First, loss prevention tends to deal with the dishonest types more, and so we tend to be more suspicious of everyone’s motives. Secondly, loss prevention professionals haven’t historically been taught the power of customer service as a deterrent to theft.

Good customer service accomplishes two things related to the loss prevention strategy. First, it is the best deterrent to theft. No thief wants to be noticed, and if the employees are actively engaging the would-be thief in conversation, 9 in 10 will walk away without attempting to steal. Of the 10% who try anyway, 75% will get caught in the act if good customer service standards are being maintained. That’s a huge win for loss prevention, and it costs nothing, zero, nadda!

Second, good customer service boosts sales. Any loss prevention program that is not concerned with increasing sales is lacking a key element. It is possible to out-sell shrink, because shrink is a percentage of what? SALES! The more sales your company, region, district, store, etc. has, the less shrink based on the same amount in dollars! Here’s an example:

Say you have a store with $40,000.00 in shrink. If that store sells $5,000,000.00 that year, your shrink as a percent to sales is 0.8%. Now, say that same store maintains the same shrink for the next year, but increases its sales by 10%. The shrink, as a percent to sales, is decreased to 0.72%, for roughly a 10% decrease in shrink on the same number!

Now, let’s say you have a great customer service program, and at the same time you increase your sales by 10%, you decrease your shrink dollars by 10%. Your shrink of $36,000, as a percent of your sales of $5,500,000.00 is 0.65%! Never underestimate the power of great customer service. I know these numbers are wishful thinking for some, but there are companies out there who are posting shrink numbers right around this area (I know for a fact!).

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There are really three parts to this. When I say “Open the door”, I mean that loss prevention must be accessible to the employees and managers that we support. The first step in opening the door is building relationships and credibility through communication. As an LP professional, you can’t sit in your office or camera room all day and expect that your employees are going to relate to you, or feel any connection with you, or your programs. You also can’t be the Audit Nazi, and nit-pick every discrepancy that you find every time you visit a store or walk a sales floor.

Become A Person

If you are to open the door to your employees, you have to take some time to build relationships. Early on in my career in LP, I had a district LP manager who insisted that I eat my lunch everyday in the store break room, with the other employees. I didn’t understand the logic at first, but I soon realized that I was having conversations with all the employees about our families, what we did for hobbies, etc. Suddenly, I was a person to the employees, and next thing I knew, I was getting calls and visits to my office from employees who wanted to help out. They were giving me tips on the employees who were stealing. They were telling me about their neighbors who were known to be shoplifters. There were even some whom I came to actually “trust”, and they were all great assets to my success.

Become A Mentor

Employees can pick out a fake, and they will come to you for answers and partnership. If you don’t know the answer, don’t lie or try to come up with something that will placate them. That will destroy the relationship you are trying to build. Tell them honestly that you don’t know, and then find out for them. Always follow up, as this builds credibility. Employees will learn to trust you because they know that you will either have the right answer, or you will get if for them. Loss prevention should be a credible source of information to the employees, and should give direction based on good business decisions. We have to understand that sometimes, it just doesn’t make sense to “lock it up”. So, we have to work with our employees on work-arounds that do make sense for the business, and still protect our profits. Give your associates sound direction that makes sense to them, and they’ll trust your judgment.

Build Awareness

Once loss prevention is established as part of the team, whether at the store level or above; then that door can swing wide open. That means communications are going both ways, and awareness-building can be accomplished. The level of awareness in the stores is directly linked to one thing above all: “How good is the relationship between LP and everyone else?” If managers and employees don’t trust, respect, nor like the loss prevention person or people, then you can preach all you want, and it will not be heard. I have often said that people don’t work for companies, they work for people. If your employees see you as credible, respectable, and reasonable, then they will be open to your ideas. They’ll listen to you. Once you establish that, you can have very high awareness levels because your employees will help you “spread the word” about loss prevention programs.

One of the most gratifying things I’ve seen or heard in a store was when I overheard an employee telling a newly hired employee about the loss prevention programs in their store. She said, “Joe knows what he’s doing, and since we started doing this, we haven’t seen nearly as many thefts.”

That’s a buy-in, and it’s priceless. As long as I have a few of those employees in every one of my stores, I don’t have to worry much about whether my programs are being communicated to the other employees. This is achieved by communicating to your employees, not only the specifics of the program, but the “why”. Why does one thing work over another? Why do we do one thing in one store, but something different in another? Why should I care whether or not the store is profitable? Loss prevention has to be able to credibly answer these questions, along with many more, and you just can’t do that through a closed door.

Technorati Tags: loss prevention,retail loss prevention,lp best practices,asset protection,retail profit protection,retail security,retail shrink,retail management

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If a Loss Prevention Program is to be successful, it must be integrated into every level of the business. Everyone, from the part time employee to the CEO, must OWN Shrink, and work toward the common goal, to reduce it. That sounds simple, but it is much more complicated than you might imagine.

Integration means that everything includes loss prevention. LP is part of every program. LP has a place in every call, every meeting, on every bulletin board. What good does it do to have a great new product if you lose as much or more of it than you sell? Or, even if you do have a plan in place to protect it, nobody knows about it? Everybody has to buy into the loss prevention program if it is to be successful. Everybody must be educated on the benefits of the LP programs, and the consequences for not executing them correctly.

Integration also must include distribution, allocations, merchants, etc. Operations may be more directly involved, but these other areas must be educated in the same areas so that they can be part of the solution to shrink.

Finally, all documents pertaining to training, policies, procedures, and programs must contain elements of the loss prevention program. For example, in the company SOP pertaining to merchandising, the tagging, or exposure standards must be included, as necessary steps for completion of the task. Training manuals or CBTs (Computer Based Training) must include the loss prevention mission statement, goals, and programs.

If a company wants its employees to take shrink reduction seriously, it is essential that the shrink reduction strategy be integrated into every part of the business. Loss Prevention is not just about catching thieves, it’s also about inspecting what you expect, training and educating, and instilling a strong awareness of shrink-causing factors into your employees.

A good loss prevention agent or manager will become integrated into the business, also. He or she will be a selling partner, and an essential part of the staff. This is crucial. Integration means that LP becomes part of the team, working toward the same goals as the rest of the team. Too often, the loss prevention team is deliberately separated, which usually results in the LP team getting “tunnel vision”, and focusing on investigations or audits instead of looking at the big picture and using investigations, audits, training, and awareness as tools that help the company reach their sales and shrink goals.

When I visit stores, I talk to my managers about sales, we talk about goals and trends, and we tie loss prevention into that. I talk to employees as much about customer service and active selling as much as I do about exposure standards and risks. That way, it all ties in together so that the line gets intentionally blurred, and I am viewed as a business partner, and not a gunslinger.

A lot of LP guys and gals may disagree with this approach, but I haven’t missed my shrink goal in 4 years, and they are tough goals, in a tough market at that. It works. In today’s retail world, LP can’t just be investigators or auditors. We have to be business partners to our stores and division managers.

Technorati Tags: retail loss prevention,loss prevention,lp best practices,lp,shrink,shrink reduction,asset Protection

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I thank God that I have a strong partner on the operations side of the business in my real-life job. We don’t have any trouble communicating, and we partner on every important decision, no matter whether it is directly related to LP or not. Also, he treats me as a true partner, both in private, and in the company of our peers and subordinates. This has been a huge win in our fight against shrink. My stores know that if I ask for something, I have the complete backing of their managers.

Partnership must exist at the highest levels of the organization, too. If the upper management is involved in the shrink reduction strategy, and make it important, then it will be important to all levels of management. If they don’t, it won’t. Companies who view loss prevention as a beneficial partnership within their organization see positive results. Loss prevention is not forced to constantly “sell” programs, because loss prevention is included in the company measurables for everyone, not just the LP team.

For example, my DM partner is rated annually on shrink, just as I am rated annually on sales performance for our district. We are forced by the company’s model to work together to accomplish common goals that benefit the whole team. It’s not just about shoplifters and internals. Nor is it just about audits, checklists, and training. It’s about all of this, plus sales, presentation, merchandising, pricing, signing, etc. Both of us view the entire package as a whole, although we focus on our individual areas.

Partnership goes two ways, though. Loss Prevention can’t be “Sales Prevention”. That means that we, as LP professionals, must understand our role, and be willing to do our part to help our stores, districts, regions, etc. make their sales goals. That can mean a variety of things, but it almost always means being willing to listen to problems and possible solutions, and to provide realistic input so that LP is part of the solution.

Partnership also must exist at store level. Although I have the “authority” to make changes to the LP programs in my stores, I never do so until I get the “buy-in” from the store manager. That means I have to educate him or her on the benefit of the program in question, or the potential change. It also means showing them the negative impact that would be caused by failure to make the necessary changes. If the manager believes in the program, it will be implemented and maintained. If they don’t, you will constantly be circling back to pick up the pieces of your broken programs in that store.

My team knows that they can call at any time, and that I will be a partner to them. I do give direction as is necessary, but I discuss the matter, and the possible solutions, with the managers so that we agree on the best course of action. Some may think of this as weak management, but I have great shrink numbers, and great relationships with all my partners, peers, and stores.

If a company allows their LP department to be directed by those who do not understand, nor “buy into” the company’s LP model, then that company simply is not serious about reducing shrink. It takes partnership at all levels of the organization to reduce shrink. If partnerships between loss prevention and operations don’t exist, then the model is broken.

Tags: Loss Prevention, Asset Protection, Retail Loss Prevention, Retail Theft, Shoplifting

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