Shop staff referring clients to competitor's shop... (Criticism against Free Market)

[Pendrokar]

Critics of the Free Market bring up the point that sounds true, in theory. A staff member of a general store will not refer the client to another store which may have the described or better product in question, as doing so does not make a profit for the store, worst it makes competitor's store stronger. A brand store is a different story.

 

But I have had encounters where time and time again staff members do it. I'm unsure if it is against store's policy.

How often have any of you also encountered situations where shop staff refer to third party shops in cases of my preferred product not being available in their store?

Sometimes they do say "I'll be nice" before referring to a another store that may have the product I prefer/describe. Implying that it is bad for business to do so.
 

It seems the incentive to do so is that you would still go to adviser's store first in the future. Therefore having a loyal customer, which would lead to future profits, even with the contradiction of the action itself. But such a point is a claim that requires a research study.

[shirgall]

In the interests of customer service, a lot of retailers would rather give the customer the best specific advice so long as the customer will return to the store for other items. In my own business I do things like this too, emphasizing that the customer's freedom of choice is important to me and my company.

[Anuojat]

In the interests of customer service, a lot of retailers would rather give the customer the best specific advice so long as the customer will return to the store for other items. In my own business I do things like this too, emphasizing that the customer's freedom of choice is important to me and my company.

This is exactly waht has been happened to me aswell.

 

The differance is... the people there KNEW i was 50/50 likely to buy from the place they referred to the approatriate items and NOT return to them.

[NotDarkYet]

I worked at a hotel where we'd refer people to other hotels if/when we were full.

 

We were happy to do that.

Ditto with the other place.

[ChrisK]

Yea, I work as a manager in a large retailer and our company had an original stance of strongly discouraging our staff from doing this. However, I think it to be largely detrimental to the customer experience and by and large should someone seek something, I would never conceal information about our competitors.

[Pepin]

The super ultra hidden secret that nobody ever talks about is: most employees don't really care about the business they work for.

 

The majority of the people who work at Wal-mart don't care how much the company makes, how much they are losing, or even about their competition. Most employees have no problem referring customers to other stores because there are very few incentives for them to maximize the store's profit.

 

The goals of the business and the employees are pretty opposed. The business wants to maximize profits and for workers to be as productive as possible. Employees on the other hand don't really care that they company makes enough for them to keep their job and they want to do as little work for the company as possible.

 

The people who do care about how much the company makes and are very productive will tend to be promoted.

 

To put it this way, most employees will switch to higher paying jobs despite how it affects the company. People complain that businesses can give you two weeks notice for most anything, well you can just stop showing up at any time no matter the circumstance. Have a better job lined up? Want to start now? Well you can start on that now as opposed to later and leave the business you work at understaffed and in a rough spot. Plenty of people have done this where I work without any guilt. Worse is you get those people who will give their two weeks, but won't do anything for those two weeks to get an easy paycheck.

 

Certainly there is such a thing as brand loyalty, but in general customers don't care. If possible, most customers would rather not pay anything. If a customer can get an equivalent product for just a little cheaper, they will switch without even thinking about how it affects the other company.

 

With the exception of just leaving a workplace, there isn't much wrong with this. It is just an incentive asymmetry. Businesses care a whole lot about their customers, and the customer doesn't really care about the business. Employers care a lot about their employees, but employees don't really care about their employers.

 

It just drives me a little crazy when people point out over and over that companies are out to make money. Yeah, and you are out to get things for free.

[Mister Mister]

most people like to be helpful.  obviously we have all had experiences like you are describing.  so someone who thinks that businesses in a free market are going to be lying about one another all the time is suffering from an irrational paranoia.  you might ask them why they are not trusting of people in general.  and if that's the case, why would they trust the government?

[AncapFTW]

If you don't have what the customer wants, why wouldn't you refer them to someone else? You lose nothing, but gain their trust.

 

I do this all the time.

[tasmlab]

This is a significant plot point in "A Miracle on 34th Street".

 

http://www.imdb.com/title/tt0039628/?ref_=nv_sr_1

 

 

IIRC, even though Macy's Santa begins referring customers to other stores, Macy's sales boom as well because of it.

[MagnumPI]

Well, OK. But that's not a criticism of the free market, at all. It's criticism of a behavior. Are there currently laws against doing it? I don't get it...

[Pendrokar]

Thank you all for your input. As I have never worked at a business in which this issue may arise.

 

If you don't have what the customer wants, why wouldn't you refer them to someone else? You lose nothing, but gain their trust.

I do this all the time.

The sense is that you lose by strengthening the pockets of your competition with a questionable(lack of a study) gain on your side. Also, are your employers fine with you doing that? 

NotDarkYet said that a mutual cooperation with the other hotel was established.
ChrisK said that the original stance was to discourage this kind of behavior giving his thoughts of why it was detrimental but not if the stance actually changed.

 

 

so someone who thinks that businesses in a free market are going to be lying about one another all the time is suffering from an irrational paranoia.  you might ask them why they are not trusting of people in general.  and if that's the case, why would they trust the government?

The lack of trust in general is a good question, all it takes is to look at reviews. However the "trust in government" is questionable. The source for this criticism comes from Jacque Fresco(wiki) of The Venus Project(TVP). While Jacque has always been a designer and an architect, so has never really worked in retail, these comments cannot be so easily overlooked when there are over 200'000+ followers(facebook page).

Here is the quote:

 

At the heart of this institutional self-preservation lies the monetary system. For it is money that provides the means for power and survival. Therefore, just as a poor person might be forced to steal in order to survive, it is a natural inclination to do whatever is needed to continue an institutions profitability. This makes it inherently difficult for profit-based institutions to change, for it puts in jeopardy not only the survival of large groups of people, but also the coveted materialistic lifestyle associated with affluence and power.

 

Therefore, the paralyzing necessity to preserve an institution regardless of it’s social relevance is largely rooted in the need for money, or profit.

 

"What’s in it for me?", is why people think.

 

And so if a man makes money selling a certain product, that’s where he’s going to fight the existence of another product that may threaten his institution. Therefore, people cannot be fair. And people do not trust each other.

 

A guy will come over to you and say ‘I’ve got just the house you’re looking for’… he’s a salesman.

 

When a doctor says ‘I think your kidney has to come out’, I don’t know if he’s trying to pay off a yacht or that my kidney has to come out.

 

It’s hard in a monetary system to trust people.

 

If you came into my store and I said ‘This lamp that I’ve got is pretty good, but the lamp next door is much better’, I wouldn’t be in business very long. It wouldn’t work. If I were ethical, it wouldn’t work. So when you say industry cares for people… that’s not true. They can’t afford to be ethical. So your system is not designed to serve the well-being of people.

 

If you still don’t understand that there would be no outsourcing of jobs if they cared about people. Industry does not care. They only hire people because it hasn’t been automated yet. So don’t talk about decency and ethics, we cannot afford it and remain in business.”

- Jacque Fresco (Zeitgeist: Addendum documentary)

 

Regarding the lamp. I am pretty sure he is taking the stance that it is not a lamp that he made. If it was, he would be admitting purposely making and selling bad lamps. So his point is that if he wanted to make and provide the best lamps, the free market would not allow him to do so because of the argument given.

[AncapFTW]

Thank you all for your input. As I have never worked at a business in which this issue may arise.

 

The sense is that you lose by strengthening the pockets of your competition with a questionable(lack of a study) gain on your side. Also, are your employers fine with you doing that? 

 

NotDarkYet said that a mutual cooperation with the other hotel was established.

ChrisK said that the original stance was to discourage this kind of behavior giving his thoughts of why it was detrimental but not if the stance actually changed.

Except I'm not just strengthening them slightly, I'm treating them like a person and telling them where they can get something which meets their needs but hurts us in no way if they get it.  At the very least, the customer now trusts us more.  At most, they'll come to us more because they know that we won't try to leave them without what they need out of fear that they might go to someone else to get something we couldn't provide anyway.

 

And yes, they are fine.  In fact, they told me to do that because they understand what customer service means.

[David Ottinger]

No, those people making that point don't know what they're talking about.  It only "sounds" true to them because their prejudice is:  Businesses are amoral, and thus do anything they can for immediate profit.

 

 

But, it's actually good business practice for a service provider to recommend a competitor, especially if the provider knows the business relationship would not be a right fit.