Six Steps to a Successful Loss Prevention Program, Part 4

EDITOR’S NOTE: This is the fourth in a series of articles discussing a strategic approach to formulating a targeted loss prevention program. The first part appeared in the July/August 2005 issue. It and the second and third installments can be found in the Archives section of the LossPreventionMedia.com website.

How We Learn

We all have common-sense perceptions about our associates, especially as it relates to what we believe motivates them. Social scientists believe these perceptions come from two separate and distinct sources.

The first is based off understanding the world around us. We do this by using our own histories. In other words, our personal experiences shape the perceptions we have about the people we deal with.

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The second is information gathered from trusted others. These trusted others are generally friends, parents, teachers, or past and existing supervisors who have all shared their knowledge, ideas, and opinions with us. Because we respect these individuals, we often take for granted their understanding of the social world or environment we are working in.

While there is nothing wrong with learning from these two methods, there is a risk that the experience and knowledge from those around us may not always be representative of the broader society or even our industry. As a result, errors can be easily made in how we perceive those around us.

Overgeneralization. One common error deals with overgeneralization, or using what we know about a group to incorrectly conclude something about the entire group. I firstexperienced this when I began working in super centers. These were large stores, typically in the 180,000- to 200,000-square-foot range, some doing $90 million in sales per year while employing as many as 600 associates per location. At the time, we did not have pre-employment screening tools, point of sale, exception-based monitoring software, nor proactive loss prevention awareness programs. What we did have was an army of loss prevention associates who were very good at detecting, investigating, and resolving large numbers of associate dishonesty cases, especially those involving front-end associates. After reviewing these results (generally case statistics) with senior management, their perception was that all cashiers were crooks who wanted to do nothing more than steal from our company. This became increasingly apparent if a store had high shrink or was located in a high-crime area.

Selection Bias. Overgeneralization is just one of many risks associated with these two learning methods. There can also be selection bias, or seeing only those things that are in line with our own preferences or beliefs. When relying on our personal experiences, there is a tendency to notice some things and not others. People may remember parts of conversations only. I have come to call this selective hearing/observation. This occurs when an individual hears or sees only what he or she wants to, then presents this as their argument for getting something done or something they want. In most cases this is done without presenting an opposing view or all of the available facts. Sometimes this is intentional, and sometimes it is not.

As a general rule, loss prevention associates are skeptics and the good ones are never satisfied with what they know from personal experiences or the opinions of those close to them. They also recognize that store associates are as complex as the social settings surrounding them. Take the cashiers mentioned above. If you surveyed them you would find they are of different gender, race, age, and ethnicity. You would also find they have a wide variety of income levels, come from different family settings, or, in some cases, no family at all. When attempting to influence these individuals or modify their behavior, it is important to understand what may motivate one individual, may not motivate another. This becomes even more apparent when stores are located in different parts of a city, district, region, or country.

If awareness programs are to be effective, all of these social complexities must be taken into consideration prior to developing and executing them. If not, then time and valuable resources will be wasted with little if any payback or return on investment (ROI).

All loss prevention programs must be strategic in nature if they are to be successful; awareness programs are no different. My experience tells me that there are five separate and distinct processes that must be executed in order to develop a successful awareness program that is measurable and can produce results. These five processes are as follows:

  1. Research,
  2. Develop,
  3. Test,
  4. Execute, and
  5. Measure.

Research

Perhaps the most important part of any loss prevention awareness program deals with obtaining research, yet I am continuously surprised at how many companies do none of this prior to spending tens and in some cases hundreds of thousands of dollars on a program.

It is critical to identify who your audience is and what behaviors you are trying to modify prior to expending resources. This can be done through statistical measurement or analysis (benchmarking).

For example, if a company has 1,000 internal theft cases annually, would it not be wise to know the following?

  • The gender of those committing acts of dishonesty,
  • Their age,
  • The departments they work in,
  • Dates and times of the incidents,
  • Types of products being stolen (by SKU), and
  • Methodologies being used.

Let me explain. If a company has experienced 1,000 internal theft cases and 60 percent involved associates between the ages of 16 and 23, occurred within their first 90 days of employment, and were female cashiers, passing merchandise or underringing product, then I would suggest the company needs a powerful orientation program.

On the other hand, if a company has experienced 1,000 internal theft cases and 60 percent involved adult males between the ages of 25 and 35 who have been employed for an average of three years or more, then I would suggest this program not be geared toward orientation, but instead be targeted at the department itself. After all, these are seasoned associates and attempting to orientate them would be insulting.

Knowing your audience and marketing to this group is just one part of the research that must go into an effective awareness program. Another involves surveying your associates to identify what impacts them the most.

Perhaps the quickest and most cost-effective research method involves surveys. Surveys are data-collection techniques that elicit information from specific questions.

This approach is arguably the most frequently used technique and most affordable. There are generally four types of surveys—mail surveys, face-to-face surveys, telephone surveys, and, most recently, on-line surveys.

A variety of questions surrounding loss prevention issues can go into these surveys then later extracted and measured. They can be as complicated as detailed written responses to multiple choices or simple yes/no answers. And although the issue of measurement is a complex one, if a company loss prevention department develops a list of 40 to 50 questions geared toward a target audience, depending on the sampling number, the responses should be reliable and valid.

Listed below are a few simple questions that have had some surprising results when surveying associates.

Question: Since being employed I have been approached by a fellow associate, friend, or relative and asked to become involved or help in a theft-related incident. (yes or no)

Question: I believe that stealing from my employer is a criminal act. (yes or no)

Question: If I or any of my fellow associates were involved in acts of dishonesty and they were identified by company officials, I believe we would be turned over to police and prosecuted. (yes or no)

Question: I believe that the physical security tools in my store detect and deter acts of dishonesty. (yes or no)

These four questions can give surprising results, and a fifty-question survey comprised of similar questions can be the compass needed to guide an awareness program. Example, if 60 percent of the associates stated they had been approached by someone to commit an act of dishonesty, 20 percent did not believe stealing from their employer was a criminal act, 13 percent believed the company did not prosecute for theft, and only 8 percent said the physical security tools could detect and prevent internal theft activity, I would say a lot of work needed to be done in not only awareness, but in every facet of the loss prevention area.

Develop

Once the research is completed and analyzed, it is time to go to work. Remember, if you have done the research, you should know what it is that motivates your associates and, more importantly, what does not. You should also understand where your problems are and, more importantly, what behaviors you are trying to change or modify.

As an example, in your research, would it not be important to ask the following question?

Question: If an awareness program in loss prevention were developed, I believe the following would impact me most:

  1. Posters using our corporate logo and mascot
  2. Video using dramatizations of actual cases of internal and external theft
  3. Video using actual events and cases of internal/external theft
  4. Posters using actual cases of internal/external theft

If 80 percent of your associates answered C, yet the department is placing all of their resources into A, then arguably there is a major disconnect between what is in development and what the associates are asking for.

More importantly, if C is what they are asking for and A is what has been developed, they may be insulted, and the goal of modifying theft-related behavior may actually backfire as these posters are laughed at or drawn on. Let’s face it; we do not want to be measuring who is going to be the next Charles Schultz.

I have seen this over and over again as I tour stores and ask associates about the posters that come from corporate. The responses are almost always the same as they are seldom looked at or read, even though they are hung right next to the time clock or in the break room. Even more concerning is that although a lot of money may have been spent on the program, it is wasted as the associates are not retaining or comprehending any of the messages, although the mustaches drawn on the faces of individuals in the posters can be creative.

Test

Another very important part of any awareness program involves testing or sampling. Although this process can be time-consuming and in some cases costly, it is a critical part of any awareness program. Done properly, it may save an entire program and tens if not hundreds of thousands of dollars in the process.

Testing involves the use of focus groups to look at and review concepts of your program. The reason that testing is expensive is that some creative work will have to be done, in advance, in order to give your associates a preview of what you are developing, what you hope to accomplish, and how you anticipate rolling it out to stores.I learned this lesson the hard way after spending a lot of money on a comprehensive awareness program during the first year of a start-up program. This awareness program involved a multifaceted approach to communicating with associates. One of the themes involved a series of posters, one for each of the twelve months and depicting actual internal, external, and vendor theft as well as safety incidents. The posters were made to look real, but in reality they were dramatizations of actual events. No testing on the overall program or poster concepts was done prior to the release.

Within weeks of the program hitting stores, we learned that one of the models used in the photo shoot was wearing blue jeans, something that was not allowed in our dress code. We were also told that many of the posters were not believable as the associates said they knew that what we were depicting was not taking place.

The biggest issue dealt with two posters that showed the actual arrest of an associate for theft. We were told, point blank, that the company rarely prosecuted anyone for theft. They were right, because at the time (year one of the start-up program) a prosecution policy did not exist, and they knew that seldom, if ever, was an associate turned over to police for prosecution. That would obviously change as our program matured, but I will never forget the embarrassment I felt as this came up over and over again.

Testing your concepts in front of your targeted audience is critical if your message is to be comprehended and the behavior you are trying to modify is to be successful.

Earlier I spoke of selection bias or seeing only those things in line with our own preferences or beliefs. It is critical that anyone developing awareness keep this in mind as you test concepts that have been developed. You will always get responses from your focus group audience, especially after they see one, two, and, in some cases, three different examples of a concept or idea. It is critical that the information being received is listened to and acted upon if companies are to be successful.

Execute

The fourth process involves executing or actually delivering the program. I am a firm believer in “high-impact deliveries,” so it is important that your audience understand the importance of the program and what you hope to accomplish.

Executing an awareness program can be as complex as the program itself. If not done properly, it can have negative consequences as store associates may become frustrated with what they are required to do. The most important thing to remember is consistent communication to those responsible for driving the program at store level.

Some examples of how to communicate consistently are listed below.

  • Formally present the program to regional executives and district managers.
  • Forward teaser messages directly to stores, copying district and regional managers. This messaging can be forwarded via email or standard corporate communication mediums. Perhaps one message every week for four weeks prior to the program arriving at stores. Example, “It’s coming, a new state-of-the-art program designed to stop shrink in your store.” Followed by, “Only three weeks remain before your new program arrives.” Followed by “Two weeks until you have the tools you have asked for to impact shrink.” And so on.
  • Contact each store personally and speak with the store director and advise what is coming and what his or her role in the program will be.
  • Keep the program simple and easy to execute. Examples, if materials are being forwarded to a store, have them marked with a florescent sticker that reads, “Hold for store director.” Have each component inside marked with the same and include simple, easy-to-read instructions, along with digital photos. Example, “Place next to time clock.” Include a photograph of what this should look like.
  • Include a video of what the program entails. Videos by today’s standard are easy to make and inexpensive. If youdon’t have the budget, then empower a group of associates to use a camcorder, write a short script, and demonstrate on camera how the program should be executed. Remember, you want to ensure that stores are executing to a level you expect and, unless it is spelled out in detail, you will not achieve your objective.
  • Follow-up telephonically with each store after the program begins. Develop a script with a list of questions so you can ensure that every facet of your program is being executed. Examples include: Did you receive the video and did you and your management team play it? Did you receive your posters and are they hung next to the time clock? Did you receive your first week’s paycheck stuffers and what was the feedback from the associates?

The key to successfully executing any program is follow-up and, although this may seem like a daunting task, especially if hundreds or thousands of stores are involved, it is absolutely necessary. Without this type of follow-up, your program may be sitting in a box in the back of a store for weeks or months and, in the worst-case scenario, may never get implemented at all.

By keeping it simple, ensuring everyone is on board, including regional and district management, and with a plan to follow up with each store, you should have a successful high-impact delivery that your executive team will appreciate, especially if executed consistently in every store.

Measurement

The last part of any awareness program should be a measurement tool designed to measure specific results.

I am continuously surprised at the number of awareness companies that do not have a measurement component in their arsenal. Proactive service providers should be able to spell out in detail how they will measure program results. Be cautious here, however, as some companies will attempt to demonstrate the success of a program based on number of responses only; for example the number of associates completing a quiz card or telephoning an 800 number. This does not, in my opinion, measure a change in the behaviors or attitudes of your associates and certainly does not identify if behaviors have been modified.

How can this be done? Perhaps a better question: Is this possible? The answer is unequivocally, “Yes.” In fact, those companies that currently have an awareness program and are not doing this are selling themselves short.

Earlier, I spoke of conducting research, which I believe is critical to the success of any awareness program. This research not only points you in the direction you need to go, but also becomes your benchmark to determine if you are making progress in the new program.

I used the example of conducting surveys and listed a few basic questions that are listed below.

Question: Since being employed I have been approached by a fellow associate, friend, or relative and asked to become involved or help in a theft-related incident (yes or no)

If you conducted a survey and received responses from 1,000 associates and 22 percent of this sampling answered “Yes” to this question, then you have not only identified that you have a problem that must be addressed, but you also have a benchmark.

If six months later you launch an awareness program that spoke directly to installing digital CCTV, implementing a new prosecution policy, and the incorporation of an anonymous hotline, then, if you surveyed the same 1,000 associates, you should be able to measure the impact of the program. If you see a decrease in “Yes” responses, a reasonable person should conclude that what you are doing is modifying behavior. The good news is that this is measurable.

If you cannot measure a decrease in responses or worse, you begin measuring an increase, then the awareness program you are executing is not having the desired affect. The same logic can apply to the questions listed below, as long as you are conducting surveys and establishing benchmarks prior to executing an awareness program.

Question: I believe that stealing from my employer is a criminal act. (yes or no)

Question: If I or any of my fellow associates were involved in acts of dishonesty and they were identified by company officials, I believe we would be turned over to police and prosecuted. (yes or no)

Question: I believe that the physical security tools in my store detect and deter acts of dishonesty. (yes or no)

Question: I have seen others in my store stealing from the company. (yes or no)

Question: If I observed a fellow associate involved in theft I would report it to management. (yes or no)

This is just one example of measurement, but in the end, it can be extremely effective and can provide you with the data needed to demonstrate to your executives that the program is working.

I would argue that awareness programs are critical to the success of any loss prevention program as long as the company does the research and develops the program based off research results.

If not, then unfortunately money and resources are wasted and the end result is no result.

Next up is step number five, auditing for compliance.

DAN FAKETTY is vice president of asset protection for Winn-Dixie Stores, a 522-store grocery chain located in the Southeast. He has over twenty years experience in retail loss prevention, including positions as vice president of LP for Harris Teeter, director of LP for SuperKmart, and regional LP manager for Shopko Stores. Faketty is the former chairman of the Food Marketing Institute’s loss prevention committee, has served on the National Retail Federation’s advisory council, and is a former member of the editorial board of LossPrevention magazine. In addition to his position at Winn-Dixie, he is currently working with Northern Michigan University in their development of an on-line Bachelor of Science degree program in retail loss prevention. Faketty can be reached at 904-370-7001 or danfaketty@winn-dixie.com.

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