Opinion: 12 ways to maximize the customer during a recession

March 20, 2009

Rick Segel
• 17 Mar 2009

Downward slanting sales. Check. A depleted customer base. Check. Constant stress, worry and handwringing. Check, Check, Check! If these symptoms are all too familiar, then it’s likely your store is suffering from Recessionitis, a disease plaguing many good-intentioned retailers just like you. Thankfully, there is a cure. And I have the prescription: Start maximizing your customers at every opportunity throughout the recession and beyond.

Business is tougher than it has ever been, yet there are stores that are staying relatively healthy. What are they doing right? Quite simply, they are getting the most out of every customer who walks in, logs in, calls in, you name it. Even though they might have fewer customers come through their doors, by maximizing the ones they do have, they’re managing to beat this recession.

Maximizing every customer means getting the most out of them every time they come to your store. It means suggesting more ideas or products before they check out. It means selling your loss leaders/promotional goods and your better merchandise as well. It means collecting as much data about your customers as possible. And it means getting your salespeople focused on saying and doing the right things every time.

Here are a few tips to get you started:

Sell the customer as much as possible. Then sell her some more. Here’s the simple truth: Retailers make money when they are making multiple sales. Your store makes more money when your customers buy more than one item from you. And in order to get your customers to buy more, your employees must learn the art of making multiple sales. The trick is teaching them to remember four magic words: Did you see this?

Let’s say your store sells cookware and kitchenware. If a customer is going to purchase a new casserole dish, your salesperson should ask, “Did you see the serving dish that goes with the set?” or “Did you see this cookbook?” She might decline, or she might walk over and take a look at those items, even if it’s just to be polite. Once over there, you never know, she might pick something else up. And just like that your salesperson has maximized this customer.

Become a relentless data collector. Basically, ask yourself What should I find out from this person that will help me get him back in my store? Ask him what he does to find out what he might be likely or able to buy from you. Keep an eye on when he comes into your store to determine when he does most of his shopping. And when he does buy from you, collect his contact information—his phone number, e-mail and address, or whatever he’s willing to give—so that you can send him information about your store. And once you have this information, put all of it, every detail, into your customer database.

Of course, collecting data from your customers can be easier said than done. Whenever you or a salesperson try to get a customer to open up, remind her that finding out this information will help you better serve her. And when you ask for her contact information, explain that having it will allow you to send her coupons and exclusive sales information. When customers know how they’ll benefit, they’ll be far more likely to talk.

Create a customer wish list. Then, try to grant those wishes. If a customer wants an item you don’t have, or one that you usually do have but that isn’t currently in stock, get his contact information on your customer wish list. That way when the item is in, you can give him a call or send him an e-mail to let him know. This is a great way for you to stay in front of your customer and to give him a reason to come back to your store.

Keep in touch with your customers—and know that “expected” communications may not be good enough. No matter what kind of retail store you own, you should be keeping in touch with your customers. Know, also, that if you’re just letting your customers know about upcoming sales or price notices you aren’t doing everything you could be doing. In a bad economy especially, you need to give your customers every possible reason to remember that you’re out there and to feel connected to you.

Your customers probably get lots of sales notices. Think of ways that you can contact them that will be specific to them or you. Send them a birthday card or a short article that you think might be of interest to them. Or if you or your store has recently been featured in a news story, let them know by sending the clip. The goal is to remind them that you are still around. If you can keep your store on their minds, they’ll keep coming back.

Do whatever it takes to keep the customer referrals coming. In today’s economy, customer referrals can be a great way to boost your revenue. You have to make sure your salespeople get in the habit of asking customers if they have any friends or family who would like what you sell. And because customers are often reluctant to provide a friend or family member’s contact information, you have to give them an offer they can’t refuse.

You might create a customer referral program in which the customer doing the referring and the person she refers receive a reward. You might give the person doing the referring a $20 gift card, and the person she’s referred 25 percent off her sales total in her first visit to the store. I know this feels painful, but just think about the lifetime value that new customer could provide. If she keeps coming back to your store, you’ll make back what you may have lost in the discount, and you’ll continue to make money off her if you turn her into a loyal customer.

Use coupons. They’re a back-to-basics tool that always works. It’s a recession. You simply can’t fight the fact that your customers are going to be more price- and value-minded. You should just go ahead and embrace it. That said, there aren’t many things in this world that price- and value-minded customers like more than coupons. They love feeling like they’ve gotten a great deal, like they’re smart shoppers, and even like they’ve beaten the system in some way. And that should be perfectly fine with you as long as they are coming back to your store.

The secret to successful coupons is using a dollar amount instead of a percentage. Dollar amounts are more tangible for customers. They immediately know what their savings would be whereas with a percentage they might have to take a second to calculate it. And the reality is they may never take that second! Also, make sure your coupons have tight expiration dates.

“Bounce them back” into your store. Bounce-back coupons are a relatively new retail sales tool. They let you give your customer a reason to come back to your store before he even leaves. Here’s how it works: You offer your customer a percentage of his current purchase in a coupon that must be used at a later date. For example, if a customer buys $100 worth of merchandise, he gets a $20 off coupon, but it must be used within a certain time frame, say, at least three days after his purchase but within seven days.

Not only does this provide you with a way to get a customer back in the store, it allows you to pressure him to come back sooner rather than later. Give him too long of a window and he’s more likely to forget about you.

Get your customers to sing your praises…and record their arias. Customer testimonials are the most powerful form of marketing for retailers. So, any time a customer sings your praises, be sure to capture the moment. Bring your customer testimonials into the 21st century by keeping a digital camera and a notepad by the cash register. When a customer gives you a compliment, thank her and ask if you can write it down and take her picture. Then put it on display.

You might frame the picture and testimonial and hang them in your store. Or you can put it on your Web site. Or you can use them in a mailing piece that goes out to your customers. Displaying these testimonials reminds customers of how great you are and convinces potential customers of the same thing. And who knows? The special attention might persuade your attention-seeking customers to give you a testimonial just so they’ll get the same treatment.

Turn your customers into research sleuths. The curse of the retailer is that, despite how beneficial it is for you to see what other stores are doing, you are often trapped in your own store. Your customers, however, have more opportunities than you to get out and about. You might as well take advantage of their mobility.

Ask your customers where they’ve been shopping and what interesting merchandise or clever sales or promotions they’ve seen. Ask the right customers in the right way and you will get unbelievably valuable information. This also helps you make a special connection with your customer—most people love being asked their opinion. It makes them feel important.

Seek out anonymous feedback via customer service surveys. Many retail owners don’t use surveys, but the truth is they can be very valuable. Anonymous surveys, in particular, are a great way for you to get straightforward feedback from your customers. Try it at least once. You might be surprised by the powerful advice you get.

You’ll find out things about your store that no one would ever say to your face. Sure, some of them might be hard to see on paper, but they allow you to correct any problems that are mentioned in your survey. Besides, if you’re doing things right in the first place, the survey results shouldn’t be all negative. You might find out that certain customers would be coming in more if you had a certain product line or if you ran a certain promotion more often.

Create a customer advisory board. Ask a few of your loyal customers if they would be willing to meet with you about four times a year so that you can pick their brains about your store. At meetings, ask what they think about your merchandise, your employees, the way you do business, etc. Remember, those on your advisory board should not have lifetime appointments. You’ll want to switch them in and out every year or so to ensure you are getting the freshest perspectives possible.

Seek out and cultivate lagniappe moments. In tough times businesses have to be willing to give lagniappe—that’s New Orleans-speak for “a little extra.” While this concept is interpreted in various ways, it means that in addition to great deals, coupons, and the like, you also give of yourself. And that is the heart and soul of customer maximization.

You focus on what you can do to genuinely improve your customer’s day rather than on what your customer can do for you. You build a relationship with him. Whether that means you take the extra time to really explain a product to someone or give him a gift card as thanks for referring a customer, you’ll be building a relationship that turns into customer loyalty.

Today’s consumer is in the hunt for the best buy of the day. And we as retailers are in the hunt to convert the hunters into the hunted—in a nice way, of course. That process starts with maximizing the customer.

I love the saying that retailing is a contact sport. You have to get in front of your customers. We are living in the era of proactive retailing. We can’t wait for customers to just walk through the front door anymore. You have to interact with them and get them to open up to you so that you can find out what their want is. Naturally, that’s never an easy process. But going the extra mile, every day and in every way, can keep them spending more and coming back. And that’s the best recession survival strategy you’ll ever find.

Rick Segel, CSP, a seasoned retailer of 25 years, owned one of New England’s most successful independent women’s specialty stores. He is the marketing expert for Staples.com, a contributing writer for numerous national publications, and a founding member of the Retail Advisory Council for Johnson & Wales University.

Rick has authored nine books, two training videos, and a six-hour audio program. Retail Business Kit For Dummies, published by Wiley Inc., became the No. 1 selling retail how-to book in the United States in January 2002 and is now in its second edition.


2 Responses to “Opinion: 12 ways to maximize the customer during a recession”

  1. matt Says:

    This blog’s great!! Thanks :).

  2. Gary Says:

    Couldn’t agree more – in this economy a Customer Advisory Board is by far the low hanging fruit for any marketing and sales team to identify new revenue and secure existing customer loyalty!

    I’m linking to this article in our next newsletter and blog – feel free to reference us too!

    Cheers, CustomerAdvisoryBoard.org

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