Posted by Don Capman on Thu, Feb 25, 2010 @ 02:56 PM
“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.
- 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.
- 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 10th purchase.
- 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.
Posted by Debra Neville on Thu, Feb 18, 2010 @ 09:35 AM
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.
Posted by Debra Neville on Mon, Feb 08, 2010 @ 10:13 AM
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.
Posted by Don Capman on Tue, Jan 26, 2010 @ 12:00 PM
|
 Giving Back Many ordinary people in this world view most large corporations as nothing more than self-serving, greedy entities with insatiable appetites for making huge profits. Well, for two hours last Saturday night, that perception was altered by most major television networks when they aired the commercial-free "Hope for Haiti Now" Concert. To date, and still counting, those two commercial-free hours have raised over 57 million dollars for the Haitian-relief effort. Those two "prime time" hours could have generated millions of dollars in advertising revenue for the networks, but, for whatever reasons, the network execs saw fit to give something back to the people who are going through an unthinkable tragedy. If you watched this program of painful mourning and steadfast hope, did you notice that the performers were not introduced and there was no applause? Humbling humility was the name of the game that night as it should have been. The Cause rose above all self-centered egos and concerns.
So, how does this relate to retail? In spite of living through an extremely difficult retail climate, we still have our businesses, and we are still part of the community. The question is how much do we as retailers give back to the communities who help put food on our tables by being our customers? Do we sponsor a local or national charity and support it throughout the year or do we donate a few bucks around the holidays? 
Although customers like to shop stores that carry the merchandise they want, they also like to feel good about the stores where they shop. A hot topic in retail these days is "customer loyalty." Most good POS systems have customer loyalty add-ons which track customer purchases and provide rewards. But customer loyalty is more than accumulating points; it also has to be earned. Customers keep coming back to a store because they want to come back. They get what they need, and they feel good about the customer experience. Customers feel good about doing business with stores which embrace social responsibility. Why don't you think about adopting a Cause that you truly believe in or expanding your involvement with a Cause you already support. Customer loyalty will follow. |
Posted by Don Capman on Fri, Jan 22, 2010 @ 09:17 AM
This morning, while listening to a major network morning show, my ears perked up when the announcer said to stay tuned for a segment entitled "what retailers don't want you to know." On hearing this, all kinds of negative ideas went through my head. What could devious retailers be up to now? Are they over-charging customers at point of sale? Are they selling ‘knock-off' merchandise? Are they selling stolen goods? When the segment finally aired, the answer shocked me. Retailers were doing exactly what they should be doing to sell more goods and to make the customer experience easy and successful. They were smartly merchandising their products. One example described how an apparel retailer was matching tops to bottoms and accessories. It was depicted as a trick to get the "brain dead" consumer to buy more. First of all, this is a win/win for the retailer and the consumer. In this situation, the smart retailer actually does sell more goods.
Isn't that what retailers are supposed to do? As a result of smart merchandising, the consumer doesn't waste endless hours trying to find companion goods which results in making their shopping experience more productive and pleasing.
Doesn't it sometimes seem that the media are obsessed with trying to villainize anything the entrepreneurial retailer does? Don't you think it might be better if the media kept in mind that retail is a driving force in the economy? Much of the media's revenue comes from retail advertisements and sponsorships. Why continuously bite the hand that feeds you?