Make Your Customers Buy More
In the present retail industry, we are constantly looking forward to new customers. Most of the companies scream out impressive prices, advertisements and offer to attract the newer people. Fetching Loyal Customers ( the 20% of our clients who are our best customers ) should be our Main focus.
To better understand the rationale behind this theory and to face the challenge of building customer loyalty, we need to break down shoppers into different customer types:
They represent no more than 20 percent of our customer base, but make up more than 50 percent of our sales.
They shop our stores frequently but make their decisions based on the size of our markdowns.
They do not have to buy a particular item at the top of their “To Do” list but come into the store on a whim. They will purchase what seems good at the time.
They have a specific intention to buy a particular type of item.
They have no specific need or desire in mind when they come into the store. Rather, they want a sense of experience and/or community.
If we are serious about growing our business, we need to focus our effort on the loyal customers and merchandise our store to leverage the impulse shoppers. The other three types of customers do represent a segment of our business, but they can also cause us to misdirect our resources if we put too much emphasis on them.
Here’s a further description of each of the customer types and how to deal with them:
Naturally, we need to be communicating with these customers on a regular basis by telephone, mail, email, social media, etc. These people are the ones who can and should influence our buying and merchandising decisions. Nothing will make a Loyal Customer feel better than soliciting their input and showing them how much you value it. In my mind, you can never do enough for them. Many times, the more you do for them, the more they will recommend you to others. Positive word of mouth is gold for business.
This category helps ensure your inventory is turning over and, as a result, it is a key contributor to cash flow.
Clearly, this is the segment of our clientele that we all like to serve. There is nothing more exciting than assisting an Impulse shopper and having them respond favorably to our recommendations. We want to target our displays towards this group because they will provide us with a significant amount of customer insight and knowledge.
A specific need drives the need-based customers. When they enter the store, they see if they can have that need filled quickly. If not, they will leave right away. They buy for a variety of reasons such as a specific occasion, a specific need, or an absolute price point. Salespeople may not find them to be a lot of fun to serve, but, in the end, they can often represent your greatest source of long-term growth.
Need-Based Customers can easily be lost to Internet sales or a different retailer. To keep them stick with you, positive personal interaction is required, usually from one of your top salespeople. If they are treated to a level of service not available from the Web or another retail location, there is a very strong chance of making them Loyal Customers.
For this reason, Need-Based Customers offer the greatest long-term potential, surpassing even the Impulse segment.
For many stores, this is the largest segment in terms of traffic, while, at the same time, they make up the smallest percentage of sales. There is not a whole lot you can do about this group because the number of Wanderers you have is driven more by your store location than anything else.
Keep in mind, however, that although they may not represent a large percentage of your immediate sales, they are a real voice for you in the community. Many Wanderers shop merely for the interaction and experience it provides them. Shopping is no different to them than it is for another person to go to the gym on a regular basis. Since they are merely looking for interaction, they are also very likely to communicate to others the experience they had in the store. So, it is advised to minimize the time with wandering customers.
Retail is an art, backed up by science. The science is the information we have from financials to research data (the “backroom stuff”). The art is in how we operate on the floor: our merchandising, our people, and, ultimately, our customers. For all of us, the competitive pressure has never been greater and it is only going to become more difficult. To be successful, it will require patience and understanding in knowing our customers and the behavior patterns that drive their decision-making process.
Using this understanding to help turn Discount, Impulse, Need-Based, and even Wandering Customers into Loyal ones will help grow our business. At the same time, ensuring that our Loyal Customers have a positive experience each time they enter our store will only serve to increase our bottom-line profits.
June 11, 2017
June 11, 2017
June 8, 2017