What needs to be changed in the bonus programs of the shoe store and accessories
A period of economic stagnation has challenged most shoe retailing companies. Many market participants had to revise the principles of organizing business processes. Interestingly, the smallest metamorphosis occurred with customer service and loyalty programs. But buying behavior has changed, and this is a direct call for the correction of these systems, says Anna Bocharova, a business coach and consultant on organizational development.
Today, as never before, 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-sales / after-sales 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 introduction and application of conditions for customers should result in 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. Retention of the buyer (maintaining the current customer base of not less than 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).
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, you trade in shoes and provide customers with repair services for 2 years from the date of purchase. The service can be used by everyone who has made purchases on 15 893 rubles, or purchased shoes for 1 640 rubles from you during the sale. This is not true. Additional services should be predominantly 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.
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 regular customers participating in the loyalty program come. In other words, do loyalty programs and customer service really stimulate the frequency of visits to the store? Is the customer’s offer of our store valuable and directing the buyer to us? Optimally, if you lose no more than 10% of regular customers per year (those customers are considered regular whose frequency of visits correspond 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.
The role of staff in loyalty programs
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 interview topics, you can use techniques to identify such competence. For example, you might "accidentally" drop your pencil and watch the applicant's reaction. Potential workers who share the call for customer service and are truly willing to regularly create comfort for visitors will 100% of the time pay attention and raise their pencil.
When planning service programs, keep in mind that there should be no discrepancies between the conditions for joining the client program and the actions of sales consultants.
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".
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.
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