Build the perception that your store provides exceptional value.
Every time you interact actively or passively with customers, impressions of your store are formed that impact how likely it is that a customer will buy from you now or buy from you ever. How can you control this process to create better, more profitable customer relationships? More succinctly put, how can you build an effective customer loyalty program?
Did you know that you build relationships with clients even when you are not actively selling? It is obvious that you are establishing a relationship when you talk with a shopper or explain the features and benefits of your products. But you are also building relationships when people drive by your store, hear a radio ad, talk to one of your customers, see a display in the mall or at the home show. You must take advantage of these interactions as well if you are really going to use relationships to your advantage. Good relationships extend far beyond relationships with people. Good customer relationships however, cannot be built without good relationships with people.
RECOGNITION BUILDS RELATIONSHIPS
Research shows that customers who shop for food when hungry, typically buy 20-30% more food than they planned. Furniture buyers are typically "hungry" when they are planning a purchase. How do you get the most from the hungry buyer? By having your salespeople recognize customers. If they "remember" a consumer's last visit, what brought them to the store and what they probably now want to find, something magical happens. Your customer will start out feeling more comfortable with the store, your sales person and the entire sales process. Just check out some of the consumer inquiries and comments on furninfo.com (FURNITURE WORLD’s 7,000 page website). It is easy to see how consumers can quickly "lose their appetite" for the furniture sales’ process or even come down with a case of the stomach flu! Lack of trust, panic and buyers remorse are all symptoms of poor customer relationships and non-existent customer loyalty.
When your sales staff quickly establishes rapport with consumers, discovers their needs, and finds ways to meet them, the result is additional sales with larger average tickets.
GOOD LISTENING BUILDS GOOD RELATIONSHIPS
Listening is the beginning of a good relationship. Promotions bring impulse or single item shoppers to your store, but relationships bring customers back. When staff appears alert, interested, concerned and polite, they transmit a feeling of security to customers who are then more willing to trust in the process of purchasing furniture from you. Shoppers who visit your store intend to buy from someone, it is only natural that they trust the person who listens to their needs first. Today’s consumers want to buy from merchants who are happy to help them find what they want -- not just in selling them whatever is on the floor. LISTENING projects VALUE (concern for the customer) and value generates PROFIT. Make your store the first source for value.
PERCEIVED VALUE BUILDS GOOD RELATIONSHIPS
Customers will be comfortable with you if you give them value. Is adding value costly? Sometimes, but a perceived value that adds to quality and has no associated overhead is still looked upon by customers as real value. How is value defined? Consumers get a sense of the value of a product or service by weighing three primary elements. These are the comparative Quality (value increases as quality increases), comparative Price (value increases as price decreases) and Energy Saved (value increases as the purchase process becomes easier for customers). If you want your customers to think of you first whenever they consider their home furnishing needs, all aspects of your relationship with these customers or prospects must create value. A bigger sale, a repeat purchase, or a good reference will always be easier when you've made your customer consider your store their FIRST source for value. They should consider themselves your number one customer! This only happens if you make them feel that way. The quality of the relationships you create is the result of the value your customers derive from these relationships. This is the ultimate source of profit. You provide value and achieve profit. You may not have the best price, but if your store makes the effort to make customers feel important, they will appreciate this extra value and be willing to pay for it. They will tell others as well. The only reason that consumers become shoppers is that they were disappointed at the first stop. They did not find the expected value.
SAVING TIME AND EFFORT BUILDS GOOD RELATIONSHIPS
Perceived value is enhanced if it saves time and effort for your consumer. Women buy furniture... and today’s women need to be very efficient with their time due to the demands of their home and work environments. If you save them time and effort, they will be glad to pay a premium. Saving energy is of tremendous value to all customers.
GOOD RELATIONSHIPS RELY ON A GOOD VALUE PROPOSITION
If your store seeks to build and sustain good relationships, you need to develop a good value proposition. This is a premise or strategy that explains why people shop at your store. This premise provides the basis for your store's marketing strategy. Every dimension of your store and the activities of your staff should focus on increasing perceived value. Therefore, every dimension of the relationship should increase quality, decrease costs or increase effort saved. If the idea or the action doesn't increase value, don't do it.
GOOD COMMUNICATIONS BUILDS GOOD RELATIONSHIPS
A store's reputation in the community, signage, mailings, radio and TV ads are all indirect contributors to good customer relationships. A Harvard research study shows that it takes four positive experiences to overcome one negative. The best way to build personal relationships is by setting short, easy to accomplish goals and meet them to quickly establish your relationship. Meeting these goals is especially important early on. It sets the relational tone for the future.
COORDINATED POLICIES BUILD GOOD RELATIONSHIPS
The whole is more than the sum of the parts in the case of communication. Each piece must build trust and make your customer feel comfortable. This trust must also extend to the business as a whole. The way your store looks, the messages it sends to the community, and the staff all play key roles in creating a relational store. It is the manager's job to orchestrate and make sure that all of those roles blend together so that the results are better than what a nice store, a good ad or a competent staff would generate on their own.
The store may have a nice new line and a committed sales staff, but it may take an advertising campaign to get the most out of a new line. The success of the campaign, in turn, excites the sales staff who take the time to make suggestions. The suggestions bring in complementary products. Sales increase and the sales staff makes additional repeat sales or they increase their average tickets. Everyone wins, the store, the sales staff and most importantly the customer. The store’s customers’ perception of value received has increased and so do store profits. Lets look at some of these points individually.
- Newspapers increase value by increasing perceptions of quality and saving effort. The consumer does not need to wonder if a store has a product, they know. However, you typically only get the person with specific needs from an ad. We want to sell rooms, not just sofas. Some percentage of your promotional budget should, therefore, be directed to customer lifecycle ads. Radio and TV ads also provide quality perceptions and save effort. They signal credibility and promote the availability of specific items.
- Direct mail dramatically increases the perception of quality and saves time. This is less expensive for the store (as long as it is well targeted), much more personal (by invitation), and lets you address your whole customer list while making the consumer feel like they are your individual concern.
- Special events should be geared to increasing the perception of your store's quality. Your store's credibility is enhanced when you are affiliated with the right causes and events in your area. You are looking for the kind of event that brings the whole family into the store. Begin to establish relationships with the next generation of buyers now, they are a key part of a store's long term success.
Several years ago, I had the opportunity to hear Hershal Alpert discuss an annual Christmas tree decorating contest held at his Rhode Island store. The promotion is directed to the next generation of consumers while bringing in parents and friends during a busy buying season. The store sets up an area with Christmas trees representing area schools. The students decorate the trees and the public votes for the best tree by bringing a can of food to place in a box for the local food shelf. Each night the food boxes are emptied and the cans or votes are counted. At the end of the contest the winning school gets a prize and all of the (edible) votes are donated to the food shelf during a season when many are in tremendous need of assistance. Everyone involved including the store and local community wins and they have a good time in the process. This type of event brings in future customers and strengthens existing relationships.
TARGETING FUTURE CUSTOMERS BUILDS GOOD RELATIONSHIPS
Consider the Generation X'ers and the Echo Boomers. They represent 117 million consumers. (Generation X 19-31 years old represent 45 million consumers and the Echo Boomers 18 and under represent 72 million consumers.
Children imitate their parents, for better or for worse. Don't you as a consumer usually go first to the places that you know from past experience? That is why you can expect to find the echo boomers in stores where they had good past experiences. Start those good experiences for the next generation of customers now. Target the next generation as well as your current buyers. According to Harvard Business school research, #1 reason people choose a store is familiarity.
Retailer's need to prepare now for later by finding a way to get the next generation of consumers familiar with their store. All promotional activities should consider your market target segments and your "preferred customers." Determine who they are and bring those customers in now with well positioned media, promotions and events.
Advertising and promotions give credibility which enhances your store's perceived value. Value is enhanced and relationships are built even when no one in the store is talking directly to customers or prospects. Perceptions are changed when consumers see your signage, receive your mailings and when your ads are heard or read.
Next issue
In the next article we will examine store appearance, people, why good relationships do make money and what the real goal should be.
David Middlebrook of AAAA Development LLC, developers of UpFront™ software, customer relationship management software designed specifically for furniture retailers, speaks and writes extensively on customer relationship management and related topics. For more information about the topics in this article contact FURNITURE WORLD Magazine at editor@furninfo.com.