RSR Research: 2009 – The Year of the Existing Customer
By Nikki Baird, Managing Partner,
Retail Systems Research
a special arrangement, presented here for discussion is an excerpt of a
current article from Retail Paradox, Retail Systems Research’s weekly
analysis on emerging issues facing retailers.
With uncertainty still
reigning supreme and words like “frugality” and
“austerity” coming into vogue, this year will be more about keeping
customers you already have – certainly making sure that you don’t lose
those customers – than about gaining new ones. New customers seem to
be a rare species these days.
So how does a focus on
existing customers change retailers’ priorities? I have a few thoughts:
Know your (existing) customers well. Just
as few things are more frustrating than entering all of your information
into an automated phone tree only to have to repeat it when you talk to
a customer service rep, consumers do and will take note when they loyally
provide a retailer with their shopping behavior, only to have that retailer
make offers that are completely irrelevant. You don’t need to provide customers
with an excuse to defect.
Online is no longer a salve for
results seem to indicate that online retail sales fell for the first
time ever this holiday season. For a lot of retailers, that means that
online no longer bolsters poor store sales. It also exposes a lot of
rocks under the water within online operations. While e-commerce operations
are long overdue for some streamlining, if you pursue cost savings there
without an eye for creating cross-channel processes, you’re setting yourself
up to fail the minute customers re-open their wallets.
Pay attention to customers wherever
they are. Customers
have more channels available to them to provide feedback about shopping
experiences than ever before, and if you’re not listening, you’ll only
give them an excuse never to come back. I had a close brush with
missing out on a hot gift item for my son, thanks to a snafu with Target’s
e-commerce operation. As an experiment, I joined an “I hate Target” fan
group on Facebook and told my story. I wanted
to see if someone from Target was paying attention. But I forgot that
my every action is broadcasted to all of my Facebook friends – which
span everyone from high school friends to business friends. I got a ton
of feedback from people who had no idea what I was up to
– offering sympathy and their own sordid tales of bad customer service.
The lesson? Just because a tree falls in the woods and nobody you know is
there to hear does not mean that it doesn’t make a sound.
It’s easy to forget about
sins of customer service to your existing customer base when hordes of
new (or unknown) customers are walking through your door every day. I
think it will be awhile before a time like that comes around again.
Do you agree that these times call for retailers to renew their commitments
to existing customers? How does a focus on existing customers change