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I am a best customer for my local grocery store, Byerlys. Why am I am the only one who knows it?
I come in 1-2 times per week, greet the staff by name and walk confidently through my favorite sections. Yet I don’t receive an email, and no one in the store is building any relationship with me. My retention is due to the helpful staff, great product assortment and customer service. Those benefits are meaningful, yet they are the same for every customer who walks in the door.
With grocery margins paper-thin and customers floating from one store to another in search of deals, can Byerly’s afford to ignore me?
Many companies have come to believe that Best Customers are important to their success, yet few actually customize the experience for these critical customers, who can represent up to 70% of revenue and a greater share of profits. Most of those companies strive to provide a consistent experience and good customer service to all their customers, which is clearly admirable. But all customers are not created equal. A relatively small number of customers make all the difference between growth and decline, between stability and failure.
What is the experience that those Best Customers receive so they are more likely to return and tell other people about their favorite stores? I am not just talking about “in-store” experience for retailers or web site experience for e-commerce businesses. No, I am speaking about the experience that Best Customers receive across all their touchpoints — web, store, customer service, delivery, and so on. The experience your Best Customer takes away is the lump sum of all of their contacts with the company. To you, these touchpoints may represent different departments — to the Best Customer, they are all parts of one organization — yours.
You can provide those critical customers with the same experience as everyone else — some companies pride themselves on the “all customers are equally important to us” philosophy. But if you follow this path, you lose opportunities to differentiate yourself and lock in loyalty, retention, increased share of wallet and references — the Holy Grail of sustained growth and profitability.
If you have not examined your Best Customer experience in detail and feel it is important, you need to begin with the first of three building blocks: Building Best Customer Understanding. The top organizations in locking in their Best Customers follow these steps to gain understanding:
- Understand Behavior — using transactional data, identify and understand trends and patterns for Best Customer segments of your business. Determine which customers are the most valuable, which Best Customers may be in jeopardy of leaving and which customers resemble Best Customers but are not at that level of relationship and engagement.
- Understand Experience — simulate Best Customer experience by masquerading as a Best Customer at retail, on the web site, with customer service and so on. Identify the weak points in the experience. Evaluate how the experience can be enhanced, usually by leveraging customer data at the touchpoint.
- Understand Attitudes — find some Best Customer email addresses and develop a web survey to understand the competitive set for those customers and why they value you above the competition. Do some store or customer interviews at key points in the experience and begin to develop a “gut-level” understanding of their wants and needs.
I will go into more detail on each of these in future posts, but these three steps lay the foundation for Best Customer understanding. It is critical to understand where Best Customers are today, and what they believe and how they behave, in order to be able to enhance that experience and measure the impact.
Does anyone know where they moved the snack section of the store? I can’t find it…
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{ 2 comments… read them below or add one }
Mark,
You’ve touched on one of my pet peeves in loyalty: the ability to recognize your elite customers and treat them differently. Recognition really has two levels of meaning:
1. The organization’s ability to recognize, as in ‘reward’ its best customers. This certainly does not have to take the form of financial rewards, although it could. I am a Diamond VIP member of one hotel chain and it would be nice for the person behind the desk to simply say, “Welcome back. Thanks for being one of our elite customers.” But that never happens. All they do is send me more reward points to be used some time in the future.
2. The organization’s ability to tell its employees who its best customers are, as in literally recognizing you personally and knowing that you are not entering the store for the first time. This carries over into cultural changes to demonstrate to employees how to, in fact, take care of these customers properly.
I believe that the capability to recognize its top 5% of customers is the number one way to differentiate an organization in the next 3-5 years and that the first ones to occupy that “space” will rule their industry. -Bill
Bill — Your points are well taken. The first step in translating customer-centricity to the retail floor is to recognize your Best Customers. This recognition ideally requires the delivery of customer intelligence to the sales floor, which is no small deal for companies with a lot invested in their POS systems.
But even if they can’t drive the data to the level they need, retail associates can verbally profile customers to identify their segments and potential needs. Chicos, the women’s retailer, does just such a thing. As women enter the store, they are asked if they are Passport members. If they are, they are then alerted to additional discounts that accrue to those best customers. The system is largely informal, but still has some impact in recognition.
The next step is to create an experience for Best Customers that will differentiate the store and encourage repeat and referenceability. Architecting those experiences requires departments to work together to craft experiences and then empower the staff to employ those experiences when appropriate. Challenges are (1) coordination of departments and (2) staff empowerment.
Lots of challenges to company structure and hierarchy, but with lots of benefits as well.