J.D. Associates Retail POS Solutions Blog

Customer Loyalty and Peeping Toms

I had a recent shopping experience that needs to be shared because it was so off-the-graph positive.

Several weeks ago, I moved into a new townhouse which quickly needed window treatments. I started with cellular shades and went to a large home improvement store that's branded blue. I went through many gyrations of what to install: color, top-down or bottom-up, single header with one large shade or single header with two shades.  In the end, the decision was mine.  But I was slightly misguided by the salesperson, who was very experienced.

The shades arrived at the home improvement store, waiting for pickup. The installer followed and viola! privacy! The installer, who is contracted by big blue, surveyed me after the install.  I answered honestly. My bedroom window could potentially be a magnet for any local peeping Toms. There was a 3/4 inch space separating the two blinds covering three side-by-side windows (a configuration I OK'ed) giving way to a privacy breach.  He jotted down my concerns as he completed his survey. 

Next day I got a survey call from the blue store.  I voiced the same concerns taking responsibility for approving the configuration.

What happened? Big blue replaced the bedroom shades with one large bedroom shade at their expense.

Why did it happen?  Because they want my next purchase to be with them. 

What happened next? Within two weeks of the shade purchase, I bought a new HE washer and dryer during the tax-free weekend. They earned my business; they got my business.

Treat your customers the way you want to be treated (isn't that a 'Golden Rule' we learned in kindergarten?) and they'll be loyal to you.

Track those customer purchases in your retail point of sale software and create a customer loyalty program. Reward them for their purchases and they'll reward you with their loyalty.

Top 10 Mistakes Retail Independent Businesses Make

The top 10 tips below, courtesy of Bob Phibbs, The Retail Doctor  I'm passing Bob Phibbs' list along because it caught my attention. 

Some of his mistakes that retailers make can be quickly corrected through the use of POS software.  We've got a POS system for every budget.  Let's talk.

1. They hire the exact same person as themselves. This works if all you want to talk to is people like you, but having a balanced crew lets you speak to all four of the personality types. With only one type of person, you often find a "hive" mentality where it's us versus them. I've witnessed this first hand; one time I walked into a busy sewing shop - you'd think I had lobsters growing out of my ears as they stared, never getting up or trying to engage me. How did they not know I wanted 10 machines for the new high school?
2. They fill their stores with merchandise based on "gut feeling." Rather than having a system to replace the sellers as well as remove the dogs, their floor is littered with duplicates that leads to the merchandise being dated, shopworn and inhibits their ability to repurchase best-sellers.
3. They have no sales process. This leads to customers doing all the work and employees that become slackers. Clerking has no place except in fast food - no, it has no place- everyone can up sell.
4. They display their merchandise with no flare, creativity, or system. Stack it on the shelves and hope it sells. More often than not, it's accompanied with a handwritten starburst sign with a price, rather than a fun sign that makes us stop and consider the items in the display. Remember: just because it's cheap doesn't make it 'want-able.'
5. If they have a website, it frequently is lacking in the most crucial details -- rendering it invisible to potential customers. Because owners don't understand the Internet, many throw up their arms and settle or tell themselves it's great when it misses on the most basic of criteria.



6. They train by crisis, instead of logic. This often means the best employees leave quickly and the worst are rewarded. Being the chief only means you'll be the one taking all the stupid questions when you take a day off or go to the bank.
7. They do not review employees to high standards; this allows the weak to thrive on the owner's dime.
8. The only quiver in their bow is to discount their merchandise, price match and participate in multiple discount programs anyone brings them, in a wrong-headed belief it will grow sales. This robs profits and often means they're putting money into the business, instead of taking it out.
9. They have little or no presence on social media, which means they are unaware of what customers are saying about their business.
10. They whine that it's the economy, government, or their online competitors who are ruining them - never taking responsibility that it's up to them to make a profit.

 

The Return of the Layaway

The layaway concept dates back to the Great Depression when retailers gave customers a chance to buy items they would not have been able to afford otherwise. Kmart has had a  layaway program for more than forty years.  It was available to customers the day the store opened its doors for business or soon thereafter. I suspect it's been a profit center.

Here's a short list of national retailers who currently offer layaways (some multi-store retailers offer layaway, but only in selected stores, strangely enough): Sears, Kmart, Toys R Us, Best Buy, T.J. Maxx, Fashion Bug, Victoria's Secret, Kay Jewelers, Walmart (did away with layaway in 2006, but some stores offer jewelry layaway), Burlington Coat Factory, Marshalls and AJ Wright.

Have you considered a layaway program for your store? Surprisingly some high-end women's shops have a layaway program; it's an opportunity for their shoppers to make a major purchase without worrying if that 'must-have' item will be out-of-stock when they have the cash to buy it.  It's also an easy way to grab popular gifts.  Layaway is making a comeback and the reasons make sense.

The consumer is becoming more grounded, thinking more about planning and budgeting than before the economic slowdown. Many are realizing that credit card companies are making lots of money on their late payments; putting stuff on credit cards is falling out of fashion.

Creating a layaway plan can be the best service your store offers, but there are a few things to think about:

1. Make sure your retail POS system can track those committed items so you have them in stock when your customers pick up their layaway. 
2. Get a deposit.  A percentage of the purchase price is often charged.
3. Make sure you have terms (30, 60 or 90 days) with payments every week or bi-weekly.
4. Are there restrictions on what can be placed on layaway? Put everything in writing--it's your 'layaway agreement'--and it'll be clear to you, your staff and the consumer.
5. Will you charge a non-refundable service fee? 
6. If they change the layaway in any way, a 'cancellation fee' can be charged.
7. No cash refunds should be given. Any returns should be converted to a gift card or store credit.  Whatever you do, it should be easily tracked.  That happens most effectively through a retail POS solution.
8. If you sell fine jewelry, you may want to extend the terms as the items are far more expensive than most average inventory. 
   
9. If you offer layaway as a convenience to your customers, promote it thought in-store signage. You might also want to promote it on high-ticket items.

There are lots of consumers out there who consider themselves frugal and they love layaway; it's now very trendy to be thinking of your finances compared to just a few years ago when we were credit-card crazed. Make layaway into another twin-win situation.  If you have your layaway program well-thought-out and in writing so there are no surprises--and you're willing to provide the administration necessary--a layaway program will give your customers what they want and need and, you'll make sales.

If you're a Microsoft Dynamics RMS or POS 2009 or Retail Pro user and want to know more about layaway, click here for some documentation on how to create a layaway in your retail POS. 

If you have more questions send an email to: support@jdapos.com

 

 

Do Customer Loyalty Programs Really Work? Part I

“Customer Loyalty” is certainly the buzz these days in retail.  Loyalty programs extend to almost every retail vertical market with few exceptions.  So if loyalty programs are so ubiquitous, why aren’t they more successful? Interested in becoming a retail pro?

First of all, what is a customer loyalty program?  Generally speaking, a customer loyalty program is a concerted marketing effort to attract and retain customers as well as to increase customer shopping frequency and the dollar value of their purchases.  Customer loyalty programs come in all sizes and flavors with benefits ranging from immediate discounts on purchases to “point” accumulation which can be used in the future for free or discounted merchandise.  Most serious Point of Sale Systems are capable of integrating with various types of customer loyalty programs.  Unfortunately, many retailers believe that if they install a customer loyalty program at Point of Sale, they will experience immediate and dramatic success.  This is rarely the case.  A long-term customer loyalty strategy must be implemented and regularly monitored for effectiveness.  When developing a customer loyalty strategy certain considerations deserve attention.

1. Who are you trying to target?  To answer this question, you need to run a report on your best customers.   They aren’t necessarily the customers you see most frequently in your stores.   Often, customers who are perpetual bargain hunters show up at your stores on a regular basis to see what you are “giving away.”  They seldom buy at full price and, when they do buy they often have a higher-than-average return rate.  In fact, they’re probably costing you money.  A “Best Customer – Worst Customer” report will give you all the information you need and help you tailor a customer loyalty program that will be attractive to your best customers.
2. How do you make your customers aware that you offer a customer loyalty program?  Several weeks ago I visited my local card and gift shop and something dawned on me.  Every time I went to pay for my purchases, a clerk would quickly ask me if I had a Hallmark reward card.  Usually, in a rush to get out of the store, I would invariably say no, and I would be on my way without anyone asking me if I would like to sign-up for one.  Finally, the last time I made a purchase at the store and was asked if I had a card, I took the initiative and said, “No, but how do I get one?”  The clerk courteously gave me a brief form to fill out and issued me a key chain card.  She still never told me what benefits I would get by using this card, and again, because I was in a hurry and customers were waiting in line behind me, I never asked.  So I am walking around with a card that has “mystery” benefits anxiously awaiting the tchotchke I will get after my 10^th purchase.
3. Are you offering rewards that are desirable to your best customers?  Once you have a list of your best customers, study their buying habits and try to come up with some common denominators.  What types of merchandise do they buy and how often they frequent your stores?  With this information, you can segment your best customers and even customize their rewards according to their preferences.  For example, since I am a male reward card holder who frequents a local pharmacy for toiletries, I really don’t want a “bounce-back” coupon offering me a free tube of lipstick after 10 purchases.  I find these types of rewards not only annoying but insulting. 

Part II will be posted on Tuesday, March 2nd.

If you'd like to find out about our Customer Loyalty Programs written for Retail Pro, then click on the Customer Loyalty for Retail Pro.

 

Outstanding Customer Service & Rock-Solid Customer Loyalty

Some of you may read this post and say, "Big deal, I'm already doing that." If so, then I say, "It is a big deal.  Congratulations on being a successful retailer and knowing how to treat the customer."

Rhode Island Road Trip  

I took my 83-year old mom shopping for shoes.  She lives near Providence and she has plenty of shoe-store shopping options. Saturday was our day. I drove 65 miles to bring her to this independently owned, single-store shoe store. They wowed her 20 years ago and they continue to wow her (and build customer loyalty) with their product knowledge and service. In the past, she was buying shoes for comfort and style (in that order), now she's buying shoes to fit a foot condition so it's more of a need. Not orthopedic shoes, just shoes that are designed with enough room to accommodate a toe with a mind of its own.

tip 1: Update your customer information while tendering the sale at point of sale.  And don't forget to ask a 'senior' if they have an email address.

 

I arrived at the 2,000 sf store and needed a minute to get the lay of the land.  No one jumped me before I got both feet past the threshold (a pet peeve of mine) and asked, "Can I help you?"  There were about 20 customers and a total of 6 staff ready to answer questions and find the perfect fit.

tip 2: Make sure the email address is their 'primary' email address.  Often times you'll get an email address that isn't routinely checked.  So, by telling them that you'll send them 'preferred customer' sale info, etc., you're more likely to get the coveted primary email address. 

 

My mom selected two styles from the display and asked for a dainty size 9 1/2.  The shoe sales person stared at her feet for a moment and told her she was more like a size 9.  She politely disagreed; he then took out his handy shoe-fitting tool. He measured both feet and reported that she was in fact, a size 9. He delivered her two selected shoe choices.  After trying them both on and walking around the store, she made her decision based on fit and style preference. He strongly suggested she consider the other shoe as that had the kind of room her independent toe would immediately need. She whispered to me before acquiescing, "That's why I come here; they know what they're doing."

tip 3: Since your customers do have options where to spend their money, try saying, "Thank you for coming today" at some point during their time in the store. Mean it (as if you wouldn't?) and the sincerity will resonate. Dare to be different; they'll remember it.

We left the shoe store, they with two new customers: me-impressed with how the seasoned sales guy handled the sale and my husband with a 9W pair of Allen Edmonds.

I'll be back though, for those FitFlops.

 

How Many People Does it Take to Inflate a Basketball?

Last weekend I had fifty bucks in my pocket and was going to buy an "official size" basketball.  I went to a big-box sporting goods chain; they sell everything from golf clubs to yoga mats.

I walked in the front door and was greeted by two manager-acting, lanyard-swinging greeters. We said hello and I was on my way to find a basketball.  It didn't take long; I knew what I wanted: good grip; official size; no more than fifty dollars. I plucked the ball off the shelves and made my way to point-of-sale.  As I approached the greeters, it occurred to me that I ought to have the ball inflated as it seemed squishy. Since both greeters looked underemployed at the moment, I decided to give one of them a job-inflate the ball. I waited at least 15 minutes. In that amount of time, the 18-wheeler outside the store could have had all of its wheels pumped for a cross-country trip.  When the store employee came back, he silently walked past me and started to rummage through a box, trying to find something that would inflate the ball.  He disappeared again and came back 10 minutes later with a rock-solid ball.  I thanked him and went to the register where it only got worse. 

 

I'm a line-loser; I ALWAYS stand in the wrong line.  At the bank the person in front of me is buying a new home and has paperwork.  At the grocery store, the register tape breaks just as I finish dumping my cart contents on the conveyor belt.  You get the picture. 

 

Well at the sporting goods store, it took 20 minutes for me and my basketball to get through the line at the point of sale; no one was paying attention except everyone behind me.  I know I rolled my eyeballs like a rebellious teenager. I'm sure I puffed or huffed a time or two. No one noticed. I changed lines with my friend who was holding my place in the other line (in the event her line went faster than my line).The security tags wouldn't come off the $330.00 order in front of me.  There were tags missing from some of the merchandise in the other line. No one noticed the customer impatience except every customer in the line. There was lots of eyeball-rolling. There were lots of line-losers to keep me company. No line was the right line in that store that day. There were some under-the-breath remarks like, "Where's the manager?" "Who's in charge here?"

 

LESSON FOR BUSINESS OWNERS AND MANAGERS:

The bottom line was: no one, not the cashiers, not the greeters not the invisible mangers were paying attention to their customers.  But the customers were paying attention. That day, customer loyalty was not built by anyone standing in those two lines. Buzz was created but not the kind of buzz that will build a business. 

 

 

Retail POS Systems on Steriods Survive - and Thrive

 

Last week before I went to the NRF Big Show in New York, I ran into a friend and customer at the grocery store.  I told her that I was exhibiting at NRF, and she asked me if I would jot down a couple of my observations on the mood of the vendors and retailers in light of the Great Recession. 

Upon arriving at the Javits Center on Sunday, which is set-up day, I noticed that the show seemed larger than last year, although not as large as some of the shows in the past.   The "Big Show" isn't typically known for producing immediate sales, but most of the world's largest retail technology vendors attend if for nothing more than to make sure another vendor doesn't steal their customer.

As for the mood in the hall, most attendees including vendors and retailers expressed cautious and reserved optimism (optimism being the key word).  Having been "beat up" for the past two years, most felt they were better off this year that they had been last year and felt the worst was probably over.  Neither vendor nor retailer was jumping for joy because they felt business was fabulous.  But neither vendor nor retailer was expressing the devastating pessimism of last year.

This year it was obvious that technology companies have kicked it up a notch and were not only displaying point of sale systems on steroids, but were also placing  a strong emphasis on planning tools, video surveillance, traffic counting, customer loyalty programs, and business intelligence.  It appeared that both vendors and retailers realized that in order to flourish and not merely survive in the new economy, innovative and more sophisticated tools were essential.    

So, when the Big Show was over, I walked away knowing that I had met the survivors of the Great Recession and all of them were collectively looking for a better future.