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Retailing is not about making a sale, it is about keeping customers
for life. In reality, that's about seven years but, in that time,
one person can do a lot of shopping!
Everyone on your team should know the lifetime value of your customers
and how they can ensure that they are generating lifelong customers.
Here are some of the steps they need to take to keep those customers
coming back. To find out the true value of a lifetime customer, you
could use this relatively straightforward calculation:
|
Average
Sale of Customer
|
X
|
Frequency
of Spending
Visits a Year
|
X
|
Lifetime with Your Business
|
=
Lifetime Value
of Customer |
|
|
|
|
Don't
fall into the trap of believing you will have a customer for 20 or
30 years. In most retail situations the lifetime value will vary between
five and seven. According to research carried out by Go Direct in
New Zealand, the lifetime value of a customer might be:
| $250,000 |
Supermarket
customer |
| $150,000 |
Motor
vehicle customer |
| $
90,000 |
Women's
wear customer |
| $
30,000 |
Menswear
customer |
1. Ensure Your Team is Trained to Develop a Lifetime
Value
The skills required to develop a lifetime value with a customer are
different to those required to sell products. Lifetime value is about
K.I.T. (Keep In Touch). Your staff need to be trained in keeping in
touch with customers and in building genuine relationships. Skills
plus the commitment to make it work.
Unfortunately, too many retailers start with good intentions, but
find they are not committed to building the relationship.
2. The 1-5-15-30 Following Up Technique
John Wren in his book Yes thanks, I'll take it promotes the concept
of the 1-5-15-30 follow-up technique when a customer has purchased
a product. A decision to use this technique should be based on the
type of product purchased, the amount of money spent and the relationship
formed between the salesperson and the customer.
The 1-5-15-30 are the days after the sale when you should positively
communicate with the customer. On Day 1, a personally handwritten
note from the salesperson to the customer is all that is required.
This could be along the lines of a 'thank you' and a hope that the
customer is getting pleasure out of the purchase. On Day 5 a telephone
call may be in order. Never start the call with "Are you happy with?".
If you do you may get a negative response. Start with, "I wanted to
telephone you to make sure you were enjoying …" On Day 15 you may
need to check again over the telephone and on the 30th day mail them
an added value gift related to the purchase. After 90 days they should,
as a loyal customer, receive your newsletter. This should be mailed
out on a regular 90-day basis.
3. Make People Remember You as a Salesperson
Your aim is to build a person-to-person relationship, not a relationship
with the business. People do business with people and therefore you
need to make an impression Always hand your business card to the customer.
A photograph is helpful.
Send relevant newsclippings, articles or new information on the product
as and when it becomes available. If the person is interested in joining
a club that relates to the product, then introduce them to a club
member.
Send birthday or anniversary cards. These work more effectively than
Christmas cards which get lost in the volume of other cards received.
At Nordstrom's in the US, individual salespeople keep profiles on
their specific customers, this enables them to match new products
with specific customers.
4.
Three Ways to Build Your Business
John Goman, vice president of a division of American Express, told
Business Week he believes there are only three ways to build any business.
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Have more customers
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Have customers shop more often
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Have customers buy more when they come in.
This may seem obvious, but too many salespeople miss the obvious and
as a result they do not win customers for life.
5. Have Written Policies that Everyone Adheres to
Too many businesses fail because they are not consistent. Consistency
comes with having realistic written policies that have strategies
that are achievable, and a constant program of training team members.
Remember, team members, as well as customers, need rewarding for building
relationships. You also need to put in place a reward system for your
team. Rewards can be low cost, but show that you value the team member.
For
example:
- Tickets to
the moves
-
Dinner for two at a local restaurant
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Weekend away
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Payment for a holiday
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Extra time off, especially on birthday
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Assistance with education
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Purchase of relevant books to assist in job
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Invitation to attend trade show or conference
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Enrolment in keep fit club
Management Memo
These 25 attributes ranked in order of importance were selected by
customers, accordingly to Scott Gross in Positively Outrageous Service:
1. Being called back when promised
2. Receiving an explanation of how problem occurred
3. Provided with information on how to contact relevant people
4. Being contacted promptly when a problem has been resolved
5. Able to talk to someone in authority
6. Being told how long it will take to resolve a problem
7. Being given valuable alternatives if problem can't be solved
8. Being treated as a person not an account number
9. Being told how to prevent a problem in the future
10. Given progress reports if problem will take some time to
resolve
11. Able to talk to people without interruptions
12. Not being put on hold without asking
13. Being treated with appreciation for their business
14. Having a person, not a recording, answer the telephone
15. Being given service people's names and telephone numbers
16. Getting through to a department on the first call
17. Being offered suggestions on how to keep costs of banking
down
18. Being able to talk to someone on the first call who can
resolve a problem
19. Receiving an apology when an error is made
20. Being helped without being put on hold
21. Having the telephone answered on the third ring
22. Being greeted with a 'hello' or 'good morning'
23. Able to reach the service area after 4pm
24. Being addressed by name
25. Ability to reach someone after hours.
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