Customer relationships: Why they're essential to your survival

HOW MANY CUSTOMERS DO YOUR STORE EMPLOYEES know by name? (NOTE: reading the customer's name off a check doesn't count.) Certainly, you might argue that the world is a different place today and the "neighborhood store" concept isn't practical. However, knowing your customers -- by name, as well as by their shopping habits and needs -- isn't a thing of the past. In fact, it's one of the most important elements of what will determine your success in the future.

Why should a customer shop at your store?
On the surface, this appears to be a simple question. Progressive Grocer recently published its annual report detailing the criteria shoppers use when selecting a supermarket. Cleanliness, clearly marked prices, accurate price scanning, low prices and pleasant checkout clerks were at the top of the list.

In truth though, you can't be the best at everything. Consultant Michael Treacy suggests that you find a niche (one that is important to your customers) and provide that element 100 percent of the time. In the customer's mind, "It's not about the hundreds of things you did well. It's the three or five things that you did outstandingly."

What should your niche be? How about providing value that your competitors can't? One caveat: You need to find out how your customers define "value." It may surprise you to learn that value typically goes far beyond price.

Learning about your customer base
If you have a loyalty or frequent shopper program in place that tracks purchases to a specific customer, you have a great source of information available to you. Sorting through it, and determining what information is or isn't useful, is a challenge well worth your efforts. From this data, you can develop a picture of your best customers -- how often they shop, how much they spend and how profitable those purchases are. Also, by examining which categories they currently shop (and, consequently, those they don't), you'll discover opportunities to stimulate additional purchases.

Your goal is to get more people like your best customers. One way is to influence the behavior of other loyalty club members so that it mirrors the top percentile. Another is to see if there are consistent elements among the demographics of your best customers, and then target acquisition pieces to those segments. (Do many of them live in clearly defined sections of your community? Is one age-group represented more than others? Are any ethnic patterns visible?)

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