29 March 2009

Getting the right information to your retail customers at the right time, or how to make them loyal to your brand

In these very challenging economical times, retaining your customers is a must to survive now and thrive when things improve. For your customers to repetitively shop in your stores (on the high street or online) means for them one or both of the following conditions:

· It is to them the most practical or ‘lack of choice’ (ex.: “I shop at your supermarket because it is the closest to my home”).
· It is the brand that best fits their needs and/or wants at that moment in time.

You could of course consider the first group of customers as a bonus but they should be nurtured too as the practical reason for their custom could disappear and them with it (like moving house). The key for making either type of customers (“for practicality” or “by choice”) stay with your brand long term, is increasingly to provide them with the right information at the right time and in the right place, and this through all the market channels you make available to them. For instance, when online, a customer is virtually always one-click away to choose a competitor. I am not referring here only to ecommerce situation but to any web browsing situation to obtain information about your brand/company, starting of course with your main informational website.

In retail, you not only need to be consistent between your various channels but you need to integrate them as well. So it is not just about consistency in products and pricing, but also for example about enabling a customer who purchased online to be able to collect and return in store if he/she wishes to. And this type of seamless (to the customer) integration is not just an information systems problem. For instance, the manager of the store where the products purchased online are collected, will not welcome the transaction if the sale isn’t allocated to his store some way or another! So if only your online store gets the sale, you will de facto create internal resistance and unnecessary competition that ultimately could affect the customer (a solution by the way here is to have the sale shared by both channels).

Providing customers with the right information at the right time and in the right place implies understanding their likes and dislikes, their needs and wants. In the luxury goods sector, this knowledge on customers has historically been obtained by the sales associate on the shop floor during the process of a sale. When you buy a £,000+ product or service, you have time to chat about yourself and the reasons for your purchase (and you often want to) but when you are buying a pack of beer, a pair of socks or a bottle of shampoo, you usually don’t want to spend more time than necessary. Well, this is changing and primarily thanks to ecommerce. When you want to buy a shampoo or a pack of beer online, you must first register your name and contact details at the very least, so you have provided the private information that the retailer would not have obtained on the high street – except if you had used a “loyalty” card. So retailers can track customer behaviour online but often fail to do so on the high street which makes it difficult to leverage the integration of the different channels to market. Loyalty card schemes have been thought of the solution but too often fail to deliver the desired outcome because:

- Too many customers don’t bother signing up to the scheme (for various reasons but often simply because they don’t consider the associated discounts significant enough).
- A majority of customers will view it only as a discount scheme (“when I shop here, I might as well use the card and get the discount points as a bonus”) but their repeat visits do not depend on it.
- Most of the competition have a similar scheme so it does not constitute a significant USP (large number of customers end up with all your competitors’ loyalty card in their wallet).

A loyalty scheme needs to be about loyalty, not only about discounted repeat purchases. So this takes us back to the subject of this post: “true” loyalty can be achieved when the customer has access to and is given the right information at the right time about your product and services. “Right” information means as individualized as possible. A customer is really only interested in the products and services that concerns him/her. So for ex, a customer who never drinks alcohol wouldn’t care less about a promotion on wines. And it is not as simple as thinking that such a promotion should target only customers with a history of wine purchases. Our non-drinker customer could easily have once bought a bottle as a one-off gift for a friend.

My point here is that the goal for retailers should be to have reliable and relevant knowledge of their customers in order to provide them in return with the right information at the right time.
This effective knowledge of your customers will of course rely on sales history based information obtained with traditional “loyalty schemes”. But crucially, to obtain a true USP with this knowledge, a retailer will have to find and master other sources of information. Social networks are one such source, with examples being online communities. Examples of retail focused websites taking full advantage of this are the customer reviews based sites like or Retailers need to engage with these indirect sources of customer information and use them as models for implementing social networking solutions directly engaging with their customers (or potential customers).

I will not list here all the possibilities (and I don’t know them all anyway) for retailers to improve their deliveries of effective information to their customers. Obviously, many great ideas are still to come. What is certain is that the retailers that will consider this challenge strategically and be among the first to surpass their customers’ expectations, will lead the pack when the economy recovers.


At 7:14 AM, Anonymous Small Business Answering service said...

Good customer service is also an integral part of business. It affects important brand and business objectives like customer satisfaction and loyalty. Anyways, thanks for the post!


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