Turn Customers into Advocates

A young couple come into your store for the first time, seeking a baptismal gift for a niece. It’s great to make that sale. But it would be even better to see them again and again. You’d like your business to be the first one they visit as each birthday, anniversary, graduation and holiday approaches. And you’d benefit even more if they were to tell their friends and family about your store.

What is repeat business worth to you? General Motors considers the lifetime value of a loyal customer to be $400,000. For Hilton Hotels, it’s $125,000. To calculate the potential buying power of each of your customers, use this formula, based on current market statistics:

Multiply your average sale by 4 purchases per year. Add 25% to that number, based on the assumption that most consumers will spend extra once each year for a special occasion. Since 20 years is the average tenure of a loyal shopper, multiply the total by 20 to determine the lifetime value of one customer.

But don’t stop there. If your customer were to recommend your store to 10 friends or relatives, you could multiply his or her value by 10. You don’t have to be an Einstein to calculate that every customer who walks through your door is worth substantially more than the price of the watch battery that may have prompted the visit!

What customers want. To keep customers coming back, you must keep giving them what they’re looking for. In today’s marketplace, this means good value, exceptional service and trustworthiness.

Good value: Though it may often appear that shoppers are looking for a deal, it’s rarely the lowest price that makes them feel truly satisfied. What they really want is to believe they got good value, regardless of the price. Value is the difference between what consumers expect to pay and what they actually do pay. A buying experience can leave customers feeling that they got good value if they believe they got more than expected for the price they paid or paid less than they expected for the item they purchased. A sales associate can establish the perception of good value by properly presenting the merchandise and pointing out how it satisfies a buyer’s need.

Exceptional service: Many businesses talk about customer service, but few truly deliver it. That’s why customers who experience it are impressed and often believe they got good value, regardless of the product or its price. You should deliver exceptional service in every aspect of your relationship with customers. Your sales staff should be friendly, helpful and knowledgeable. Your store’s ambiance should be pleasant, its amenities notable and its follow-up scrupulous.

You should begin providing exceptional service the moment you welcome customers – and never stop. Service isn’t limited to the time customers are in your store; it involves following up with them after their visit and contacting them between visits. It’s making sure that every piece of jewelry you sell delivers the message the buyer wants to send, regardless of the price or the occasion. It means making the shopping experience positive so that your customers can really count on you – they’ll know what to expect, and they’ll trust you to meet their needs.

Trustworthiness: In the past, a company established trust largely by its reputation, built through many years of presence in a community. Today, history and longevity alone do not ensure trust among consumers. They look for competence in each encounter. They reward you with their trust and loyalty because they have confidence in your knowledge and skills – in your ability to satisfy their needs. They assume their experiences in your store will be positive because you have set a standard for performance and you require each of your representatives to adhere to that standard.

Turning customers into advocates. When you are able to maintain loyalty because of value perceived and service rendered, you have created the most precious of all customers – the advocate.

Advocacy is the single most valuable marketing element in business today and it doesn’t require a separate line in your budget. Customers’ recommendation of your store to friends and family is the greatest endorsement your business can receive.

To build advocacy, first make a customer your client. A customer is merely someone who buys something. A client is someone who buys regularly and trusts your help with emotionally significant purchases. You acquire customers through luck or good performance; you develop clients through consistency. Clients gradually turn into advocates when they trust you enough to recommend you to others.

Of course, customer advocacy alone doesn’t guarantee success. The value and service you provide must be consistent with the endorsement you were given. With each shopper who visits your store for the first time – whether through a referral or by happenstance – the cycle of expectations, delivery, trust and loyalty begins anew. You simply cannot compromise your ability to deliver every time, all the time.

Keep in mind that just one bad experience can destroy trust and confidence. Just as a satisfied customer can spread the word about your good value and service, a single unhappy shopper can reverse the effect completely.

Conquest vs. relationship marketing. Today’s customers have more outlets than ever vying for their discretionary dollars. Newspaper and television ads tout products and prices in fierce competition. The fact is that few products are available from only one place, and chances are slim that one retailer has the “best price” on anything – because when pressed to compete, someone else is always willing to sell it for a dollar less.

A business practices “conquest marketing” when its objective is simply to make the sale and get the dollars. A prospect can become a customer – in other words, a conquest – merely by succumbing to a one-time offer or a fast-talking salesperson.

Product and price will appeal to consumers for a limited number of items. But conquest marketing won’t develop loyalty and advocacy. Businesses that use it may never see the conquered customer again and thus must throw more and more dollars into making new conquests. Although you can sustain an adequate level of sales in this way, it’s virtually impossible to grow a business through conquest marketing.

Relationship marketing, on the other hand, helps you turn prospects into steady customers, customers into clients and clients into advocates. In relationship marketing, your objective extends beyond the immediate sale; the goal is to develop a long-term association with the customer. Your larger aim is numerous future sales to this customer and to his or her referrals. Your business agenda calls for building your client base exponentially through well-developed customer advocacy.

Relationship marketing can be successful only when practiced consistently by every member of your staff. It requires a well-trained staff and an excellent client information and development system.

Learn about your customers. One of the best ways to establish relationships is to keep good records – including every bit of information you can gather about your customers. You can then use such data to serve them exceptionally when they don’t even expect it!

This goes far beyond simply recording birthdays and spouses’ names. For example, if you know that a client runs a company and plans to be out of town before Secretaries’ Week, you can anticipate the need for office gifts and contact the client in advance with suggestions.

You begin to develop clients when you meet them for the first time, even before you show them merchandise. In just a few minutes of conversation while you seek to uncover their motives for buying, you should begin to learn about them and what they consider important. You should record everything you learn about them – and about anyone else they mention. The most important things at first, of course, are their names and how to contact them.

A business that provides exceptional service makes follow-up its responsibility, not the customer’s. If you hand out your business card with a price and a stock number on it, you make the customer work in order to give you money. Consider shifting the responsibility for follow-up to the salesperson.

Client information may develop slowly. Very few customers will patiently respond to an interrogation simply so you can fill out a form. Although it should be no secret to your clients that you intend to keep them in your records, cooperation shouldn’t be burdensome to them. The best way to get information is to do a good job of listening. With each opportunity to serve your customers, you’ll learn more and more about them, their relatives, friends, coworkers and acquaintances. As each customer grows to trust you, you will observe a greater willingness to confide in you and reveal additional layers of information.

Organize the information you gather consistently to create a contact calendar and an alphabetical index for your growing client base. Your system should prompt you to make follow-up calls after a sale to assess customer satisfaction, issue quarterly reminders to have articles cleaned and checked, suggest merchandise to complement or match jewelry already owned and send personal invitations to special events and greeting cards on occasions you know to be important.

The payoff. By doing the job well – with every customer, every time – you will build loyalty and develop advocacy. You will be able to produce traffic in your store through customer contact. You will acquire the ability to pre-sell jewelry or even sell it sight unseen. You will create legitimate reasons to be in touch with each of your clients frequently. Your clients will begin to rely on you to cover them for gift occasions.

The benefits of loyalty are staggering. If you stop to consider the lifetime value of a loyal customer, you will see the benefits of setting high standards, rendering quality service, exhibiting professionalism at every opportunity and maintaining a sophisticated client-development system.

Janice Mack Talcott and Kate Peterson are the principals of Performance Concepts, a company dedicated to the education and training of specialty retailers. Their products and services address staff development, client development, and business development. They can be contacted at 3151 Pear St., S.E., Olympia, Wash. 98501; (360) 754-7763.