How to manage customer loyalty
11.05.2017 8821

How to manage customer loyalty

The period of economic stagnation has challenged most shoe retail companies. Many market participants had to rethink the principles of organizing business processes. Interestingly, the smallest metamorphoses occurred with customer service and loyalty programs. But consumer behavior has changed, and this is a direct call for the correction of these systems.

Anna Bocharova Anna Bocharova - Business trainer, organizational development consultant, has been advising retail companies for over 10 years. Among the customers are the brands Hogl, Marc Jacobs, Oikos, Scavolini, Turri, Visionnaire, Missoni, Bogner, Van Laack, Marni, Versace and others. Author of books “Retail Store. Where to start, how to succeed ”,“ Careerist Handbook ”. The trainer of the federal program “You are an Entrepreneur”, the trainer of the Seliger Forum.;

"... Previously, 5-10% discounts stimulated the buyer, and now 50% does not cause a reaction." “What kind of fashion is to buy 5 pairs and bring them for return the next day”, “Half of the city uses one customer card ...” Familiar situations? Has your company also once introduced a system of discounts or bonuses in order to attract customers and increase their loyalty? And now you notice the lack of a stimulating effect on customer behavior?

One of the trends of the last 2-3 years is the appearance of a consumer blackmailer and “racketeer” instead of a satisfied buyer of goods.

Now more than ever, it becomes relevant to analyze the effectiveness of existing programs to retain and attract customers, as well as the conditions of these stimulating events.

The terminology issue should also be clarified. Often, shoe service managers primarily refer discount programs to customer service and loyalty programs. However, there are still a significant number of options for the formation of customer loyalty.

Customer service and loyalty programs are any actions / events / conditions for organizing the presentation of the goods / purchase process / communication with the buyer / after-sale / after-sale work with the goods, the purpose of which is to create a buyer’s sense of value / benefit / advantage of this retail store over similar ones. Important addition:

The result of the introduction and application of conditions for customers should be additional profit for your store

In other words, if you do not earn on an additional client service, then there is no point in continuing the program.

The main business objectives of an effectively organized program for buyers are as follows: 1. Customer retention (maintaining the existing customer base by at least 75%).

2. Stimulating the transition of a casual client into the category of a regular / loyal customer.

3. Increase in sales of goods at full price (for most shoe stores and accessories, it is safe if at least 50% of the collection diverge at full price, without waiting for the sale period).

4. Increase store conversion.

5. Detuning from similar stores (the target buyer prefers your outlet and its assortment offer).

As you can see, the task of selling everything at any price is not worth bonus programs.

Shoe and accessories stores begin to think about programs to attract customers in the following cases:

- when everything is good (there is free time and money resources)

- when everything is bad (revenue decreases, conversion worsens, regular customers leave, etc.)

As a result, programs for buyers become either a pleasant (but not sufficiently stimulating an already successful business) addition, or the last hope for generating income from trading. And in each of these cases, retailers forget about the true objectives of loyalty programs.

Avoiding traffic drop

Let's see what mistakes retail stores make in developing, implementing and analyzing the effectiveness of customer service programs and loyalty.

1. The conditions are the same for all groups of customers, without taking into account the history of the relationship of this client (i.e., relating it to a specific client group). For example, let's say you sell shoes and provide customers with a repair service for 2 years from the date of purchase. The service can be used by everyone, both those who made purchases for 15 893 rubles, and who purchased shoes from you for 1 640 rubles during the sale. This is not true. Additional services should be mainly available to those who brought more profit to the outlet and, in turn, be an additional incentive (argument) in favor of choosing a model at a higher price and certainly at the full price, which, as you understand, brings you profit.

2. Discount on the first purchase, as well as the issuance of regular customer cards during the opening of the store. Of course, many visitors to your store will be pleased to receive such a gift, but it will never be an excuse for an additional purchase. In addition, there is a special group of visitors to stores that come to it 1 times, during the opening (the so-called "innovators"). In the future, you will not see them, because this category of buyers has minimal loyalty to the outlet. In other words, you could save the discount provided in the form of your profit, but would prefer to share it with the client.

3. Any requirement of the visitor is fulfilled. In the last 3 years, shoe stores and accessories (and not only them) throughout Russia have seen an increase in the number of blackmailers. People threaten to refuse to buy if they do not receive additional discounts, or begin to bargain with sales consultants, and also announce their intention to post information about poor service on social networks, etc. The store manager is obliged to make a decision and bring it to his sales staff - as we do in these cases. Remember the features of consumer behavior. What is easily taken is never valuable. Those who succumb to extortion will never receive respect and recognition. Once you yield to a “good / promising / loyal” customer, you will get a chronic problem in your store. By providing a one-time discount, you will always receive requests to continue this practice and customer perplexity when trying to refuse. Moreover, during the scenes on the trading floor, other visitors will want to join the "blackmailer" ("They sold him at a discount, why should I pay the full price !?").

4. Programs are unchanged over time. The buyer begins to notice that there is a certain pattern in your actions (for example, in alternating a new batch of goods and past deliveries at a special price). As a result, you lose the main source of income - impulse (unplanned) purchases of shoes at the full price. Buyers get the opportunity to plan purchases. As a result, a slowdown in the turnover rate and the main flow of purchases will be made only during the sale period. Change program conditions at least 1 once every two years, to prevent addiction and reduce customer sensitivity to store conditions, as well as action planning.

5. The customer has no responsibility to the store. For example, the buyer Sidorov, following the results of purchases last year, became the owner of the maximum possible discount. But during the next 7 months I did not make purchases, I did not visit the store. Many companies retain the terms of participation in customer programs and make a mistake. The buyer does not have to visit the store when the store needs it. There is nothing to encourage him to come to the store. In other words, under such conditions, the store “plays with one goal” for customers.

6. The size of the income and the conditions for its receipt for the seller-consultant do not depend on what and under what conditions he sold to the client. For example, in the store at the sellers, the piecework wage system is declared - 2% of revenue. You have to agree that there are two big differences in selling a genuine leather bag from a new arrival at the full price and selling a belt of last season at a discount of 70%. In the second case, the store’s income is less, and the invariance of the seller’s income reduces the already insignificant amount of profit for this assortment position.

Efficiency mark

Based on what data to understand the results of the implementation of loyalty programs? The main criteria for evaluating the effectiveness of customer service programs and loyalty will be the following data:

Average, recommended performance indicators of service programs, based on which you can understand whether the client services are organized correctly:

1. The ratio of sales of goods at full cost and sales at reduced prices: at least 50% of the goods are sold at full price.

2. Sales dynamics: we will be interested in whether the sale of goods at full price is increasing.

3. Depth of discounts: at what discount are more products sold? Do customers buy at the beginning of special offers (5-10% discount) or mainly at the end of the promotion (last chance - 70% discounts).

4. At least 30% of customers participating in the loyalty program after joining it began to visit the store more often, buy more.

5. The turnover rate increased after the introduction of customer service.

6. Overall, store profitability has increased.

7. Customer retention: how often come regular customers participating in the loyalty program. In other words, do loyalty and customer service programs really drive visit frequency? Is our store's offer valuable for the customer and guiding the buyer to us? It is optimal if you lose no more than 10% of regular customers per year (those customers are considered regular if the frequency of visits to which corresponds to the average data for a particular store).

8. Customer opinions - how much do they evaluate current client programs. Regularly collect the opinions of regular customers, optimally: in personal conversations and during observation during visits to the trading floor. Show sincere interest in their opinions, capture all offers from buyers. But .... do not rush to implement. Between the wishes of customers (even loyal, regular) and the way they will behave after you harm all their advice, there is, in the popular phrase “a big difference”. Many heads of retail stores complied with the wishes of customers (for example, to bring a special product, start working with a brand, order a popular model, etc.), however, at the time of presentation of the results to the customer, they made an unpleasant discovery. The product was no longer needed, it seemed otherwise, in another place it was cheaper, etc. Needless to say that, planning to satisfy the needs of the buyer, the store received a loss, because Does any non-standard operation have a higher cost? In addition, the additional effect of such a service will be the selection of resources from the execution of directly profitable trading operations?

9. Loyalty program costs: optimal if you spend no more than 2% of revenue.

For the manager of the shoe business and related product lines, it is important to always remember that the purchasing competence of customers increases from season to season. Hence the conclusion - the program and its conditions formulated by the buyer must be correct and comply with the ethics of business relations. Regardless of the choice of the price segment of your store, the customer has the right to receive benefits without prejudice to reason and morality.

Let us give an example of not just stupid stocks, but really inefficient actions of retail stores.

The role of staff in loyal programsof

Of course, in order for statements about customer service not to become an empty phrase, it is necessary to hire people to work in your stores. "Service" staff. Not every jobseeker of the seller-consultant position is also capable of being a service specialist. Loyalty programs do not make sense without a personnel management system, sales and customer communication techniques. Any, even the most thoughtful program for customers is easily spoiled by "non-service" personnel.

Already at the stage of selecting employees for your stores, pay attention to whether the applicant is able to become a truly customer-oriented employee. In interviewing topics, you can use techniques to identify such competence. For example, you can “accidentally” drop a pencil and look at the reaction of the applicant. Or, on the way to the place of the interview, throw a small object (accidentally forgotten). Those potential employees who share the call for customer service and are really ready to regularly create comfort for visitors in 100% of cases will pay attention to these trifles (they will pick up a pencil and notice an object on the floor). Other applicants will not pay attention or will not take any action.

When planning service programs, keep in mind that there should be no inconsistencies between the conditions for joining the client program and the actions of sales consultants. For example, a loyal customer card under the terms of your store can be obtained with a one-time purchase of goods from a new batch (at the maximum price) of at least 6 rubles. In this case, the consultants who meet the buyer at the entrance to the trading floor should not first of all say that "we have a sale." Keep track of the words the store employees use to convey information about loyalty programs. It is important to remember that joining a customer to great deals and additional opportunities also has to "sell".

Often during the "mystery shopper" I hear such phrases from "customer care specialists": "The card doesn’t give you anything - it’s cumulative", "Now it’s a sale anyway, you can not show the card", "Oh, there’s complicated read the conditions on the stand "," If you need, we can bring your purchase home. "The value of the possibility of joining the services for regular customers and the desire to fulfill the qualification requirements is sharply reduced, because the average store visitor does not understand what exactly he get what e for personal gain.

Make a list of recommended and / or forbidden phrases for your employees. For example, I always recommend to refrain from the speech modules "discount card", "discount card". When the buyer hears such words, already at the subconscious level, he assumes that his purchase will be an advantage at a discount. That is, with his careless remarks, the sales assistant deprived himself and his employer of income, and also provoked an additional objection from the client. Demand to implicitly apply the following speech modules in communication with customers: joining a loyalty program, inclusion in a loyalty program, a map of our store, a card of our regular customer, a card of our beloved customer. Whenever possible, sales floor consultants should avoid the word "customer", replacing it with the options: "customer", "guest", "visitor" of the store / boutique.

How many options for service programs are reasonable to offer customers?
When purchasing goods at a special price, the number of service offers should decrease, up to a complete absence. Or, be available to the client, but with compensation (full or partial) of the cost of the service. For example, when buying a pair of boots from a new collection, the services for replacing the heels for the buyer are free. If the buyer has chosen a copy from the collection of the last season, for which a special price is set, then the heel, if necessary, will cost 250 rubles to replace it. You should not offer the buyer a set of additional services in more than 5 options. When developing loyalty programs for retail stores, we always remember the rule of keeping attention - for a guaranteed decision-making, a person does not need to be given more than 3-5 options. Moreover, it is reasonable to provide 5 variants of service offers only in premium stores.

For the convenience of choosing areas of additional work with clients, you can focus on the following options: 1. Programs with the goal of retaining (including forcing to buy) a regular customer.

2. Programs to accelerate trade.

3. Programs to increase the profitability of the store.

4. Programs providing the buyer with convenience / comfort when buying / delivering / assembling / using goods.

5. Programs aimed at reducing the cost of marketing activity of the store.

What actions should be performed when developing a customer service program?

As you can see, when planning additional services or conditions for regular customers, the main criterion for choosing customer service options should be the benefit of the shoe store. Programs in which participation brings to your trading floor nothing but problems should be closed.

This article was published in the 127 issue of the print version of the magazine.

The period of economic stagnation has challenged most shoe retail companies.
Please rate the article

Materials on the topic

Sales through marketplaces. Growth points and pitfalls

Over the past few years, marketplaces have been actively growing, taking away share from offline retail. And shoe brands are eager to sell their products through these online platforms, hoping to earn a lot more and scale their business. Marketplaces are really...
27.05.2024 2419

Omnichannel on the shelves. What is it, which companies are it suitable for and should they follow this trend?

The technologies we use in life and business are developing rapidly: in the last 10 years alone, many new sales channels and communication with audiences have appeared. This progress influences consumer behavior in ways that cannot be...
18.03.2024 1901

Technology Selling Issues

There is nothing worse than meeting the buyer with the words “Hello, can I help you with something?”, Because the seller works in the store just to help. Criticizing this established pattern of communication with the buyer, Andrei Chirkarev, a business coach ...
26.08.2013 208467

Does an online store need omnichannel?

According to experts, the assortment of offline and online stores should be different, because their target audience is different. What is the difference between the target audiences of a regular retail store and its online clone? Is omnichannel necessary...
10.10.2023 3852

I doubt and object: how to find an approach to difficult clients?

How good and serene would be the work of a salesperson if the customers were calm, cheerful, always knew exactly what they wanted, and bought, bought, bought! It is a pity that this is possible only in dreams. Therefore, we will not dream, but we will ...
10.05.2023 7546
When you sign up, you will receive weekly news and articles about the shoe business on your e-mail.

To the beginning