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 Tue, Feb 23, 2010 @ 08:19 PM
I'm always looking for new material for my blog postings; I keep coming back to customer service which in its simplistic form is about engaging the customer.
Another Road Trip
In the past few days, I've been in the Boston environs--south and west of the city--visiting independently owned specialty stores, big-box stores and a B&B. In two of my experiences I'll tell you what happened and then I'll tell you what should have happened.
HAPPENED: Gift store:I love the line of Brighton handbags. This day, though, I needed a new business card holder. I spotted a Brighton one on sale--40% off; I grabbed it and made my way to the register. "Have you ever shopped here before?" "No, I've always wanted to stop in; I love the Brighton line; this is my first time here," I said. "That'll be $38.50," the clerk replied.
Sale t(ended) at the retail POS.
WHAT SHOULD HAVE HAPPENED: Talk to me. Tell me about the Brighton line that's coming in for Spring. Tell me about your customer loyalty program; ask me if I want to be part of it. Tell me about your store e-newsletter. ASK me if I want to receive future emails from you about store events, preferred customer sales. Ask me for my email address. Talk to me. Give me something to talk about.
HAPPENED: Big-box stores: I went to seven stores searching for a pasta machine. I know I had a quizzical look on my face as I walked the aisles many times in each store, trying to find the elusive machine. Not one person in any of the stores engaged me at any time. I know it's February and stores are still experiencing the slowness of the post-Christmas season, so stores have bare-bone staffing levels. Some stores had no staff in sight until you got to the register. I left all seven stores empty-handed.
WHAT SHOULD HAVE HAPPENED: Motivate your staff to service the customer at all times. Hands-on attention from staff will win any customer, even if he/she leaves empty-handed. Tell me about your CLEARANCE items so I can stock up. Don't you want me to open up my wallet?
TIP for Mangers and Store Owners: Ask your customers what they think of your store's customer service. Take a survey. Ask them their mood rating as they walk into the store. Give them that number. As they're leaving, ask their mood rating again. If it went up--congratulations. If it didn't or went down, ask yourself and your staff some questions about the customer experience they delivered to the customer and how they can improve it for the next customer.
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 Don Capman on Thu, Feb 11, 2010 @ 03:18 PM
Whether you’re a die-hard Colts fan or died-in-the-wool fan for the underdog Saints, Super Bowl 2010 had a magical feeling about it. After suffering years of post-Katrina devastation, neglect and desertion, the “Crescent City” and its beloved Saints came back in a big and emotional way.
From looking at the celebrating crowds on Bourbon Street after the win, it was obvious that Mardi Gras had started a week early.
For anyone who’s ever been to New Orleans, there is a distinct and uplifting persona about the city. From the “Old South” refinement of the Garden District to the never-ending party in the French Quarter, you experience a feeling for the soul of the city that is like no other. When Katrina struck, it seemed like the soul of the city itself had been ripped away from its body and would never return. Well, guess what? The soul of the Big Easy is back and in a Big Way! Granted, there are still many years of work to be done but slow and steady progress is being made every day thanks to the determined residents and organizations like Habitat for Humanity.
While not possessing the violence and death of Katrina, the Great Recession has devastated our economy and severely damaged many of our institutions, businesses, as well as our personal lives. Unlike Katrina, the Great Recession was brought on by ourselves and could have been prevented. None the less, it was and still is a very painful experience where it is sometimes difficult to see the light at the end of the tunnel. Unfortunately, retail was one of the hardest hit sectors of the economy and will, in all likelihood, take the longest to recover. Like Katrina, the Great Recession does give us pause to take a look at the way we do things. Much of the new construction in New Orleans is being built to withstand such a cataclysmic disaster in the future. We must do the same for our economy and our businesses.
Today’s post-recession retailers need to take a fresh look at how they do business. Inventories need to be scrutinized carefully. Key performance indicators (retail KPI) such as turn and sell through require constant attention. Customer loyalty and customer service and retention should be a part of the retailers’ everyday vocabulary.
Like New Orleans, retail will come back. Also, like New Orleans, it has a long way to go but progress is positive and the soul of this country will rise to the occasion.
LAISSEZ LES BONS TEMPS ROULEZ!
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 Wed, Feb 03, 2010 @ 10:06 AM
A couple of phrases that are being widely bandied about in today’s retail circles are:
When implemented successfully, these catch phrases imply that customers enjoy shopping in your store and will probably return more frequently. Although creating a positive customer experience sounds relatively easy, it can be extremely difficult to achieve and maintain.
Successful retailers need to constantly take the pulse of their customers to ensure that they are in touch with their customers’ ever-changing needs. First and foremost, retailers need to listen to what their customers are saying. A recent stellar example of a retailer failing to provide their customers with an outstanding experience took place at my local supermarket.
For the past couple of months my supermarket, which is part of a very large chain, decided it was time to change the store layout. Curtains went up to hide the construction and displays were moved to anywhere there was room, often several times a week. While the construction phase made it difficult to find things, change can be good so I anticipated that any inconvenience would be temporary. Well, the change was completed and the result remains a nightmare.
Prior to the change, the entry way to the store was open and inviting.
Displays and coolers were clearly visible and access to those displays was easy and inviting. When you entered the store you could eyeball the entire produce department and deli counter and know exactly where to find what you were looking for. You felt comfortable in the space and didn’t feel the need to escape. But why make it easy? A design team of consultants decided that they knew best and decided to create anxiety immediately upon entry.
Here's what happened:
- They moved the displays and concentrated them at the store entry.
This change gave little or no line of visibility to the merchandise. You were on top of it the minute you entered the store!
- To further complicate matters, the new aisles created at the entry way, created a log jam of shopping carts and impatient customers trying to get past you while you were trying to shop.
- Inevitably you were forced to move your cart to the middle of the store, park it and go back to the congestion to look for the merchandise you were forced to pass by when you entered the store.
- Realizing that they may have created a problem, the store assigned a clerk just to help customers find merchandise. That was not the problem. After listening to all the negative and angry feedback the clerk was given, he probably needed more than a couple of aspirin after his shift.
Change can be good but not when it places the consumer in a frustrating and anxiety-producing situation at the very beginning of the shopping experience.
What should management have done? Survey their customers as to how they liked or disliked the old layout and what changes they would like to see in the future would have probably been a far better way to go.
The ill-informed changes certainly did not enhance my customer experience and, with so many choices to shop, will not improve my customer loyalty to that store in the future.
Posted by Debra Neville on Mon, Feb 01, 2010 @ 11:51 AM
Recently I picked up my mother-in-law, who's cute with dimples in her cheeks. She was coming to my home for dinner. With nothing that would interest her on my menu ("No" she said to tofu burgers) I decided to stop at a national grocery store chain to pick up some food. Gerrie waited in the car, patient as usual. I was in a rush, hurried as usual. Fish in hand, I looked for one more item to place in my basket-a surprise for her: a lemon-filled donut. I followed my nose to a Dunkin' Donuts kiosk located inside the grocery store. It's a store within a store (SwaS). I ordered the donut and pulled out a one-dollar bill. The clerk asked me if I wanted to pay for the fish as well-at the same time-at the Dunkin' Donuts register. Shocked, I said, "Yes!" I'm still talking about the convenience offered me-being able to handily pay for the entire purchase at one register. The SwaS concept works for these two complementary stores for lots of reasons. Convenience for the customer is only one of them.
Some retailers have a SwaS and operate very successfully. Should you decide that a SwaS model might work for your retail business, consider the following:
- Choose a retail store that will be helpful to you-the host sight, by giving you 'critical mass' and credibility that you might not be able to do on your own. (Sephora within JCP?)
- Don't duplicate assortment/merchandise. No competition. And understand the purchases that might be tied together between the two 'stores.'
- Make sure the inside store pulls the same kind of customer that you want to attract to your store to increase the chances they'll be interested in your merchandise.
- Get benchmark data from your retail POS before and after the SwaS to see how this concept is benefiting both businesses, from new sales to new customers to suggestive selling between the two 'stores.'
- Maintain your own brand. Reinforce your brand.
- Market the concept of a SwaS to your customers and tell them why you're doing it: to benefit them by making the shopping experience more convenient, with more variety, enhancing the customer experience and maybe increasing customer loyalty.
There are no guarantees on incremental sales for the host store due to a SwaS, but if you choose the right inside store, attract the right customers, sell the right merchandise, you increase you chances of mutually benefiting from this retail partnership.