TIPS FOR BETTER RETAILING: “Better Communicating with Loyal Customers”
by Joel R. Evans and Barry Berman
In this post, we resume our discussion about gaining more loyalty and patronage from current customers. The focus is on communicating with ongoing customers. Our assumption for today is that your business has started to develop a customer database and that you are also now at least thinking about enacting a frequent-shopper program.
There are several basic issues that should be considered in better preparing to communicate with current customers:
What topics/themes should be covered?
During the year, there should be a combination of “image” and “product/event” oriented messages; yet, the two messages do not have to be presented together. Image messages are broad and intended to portray positive company traits to customers (such as the number of years a firm has been in business, the family-owned nature of a business, the emphasis on customer services and a friendly sales staff, the quality of products sold, etc.) These messages are long term in emphasis and geared to making customers feel good about the firm. Product/event messages are more specific (such as the introduction of a new product, a special sale, holiday shopping, etc.). The purpose is to get short-term business. Frequent-shopper programs are both image and product-/event-oriented.
What audience should be addressed?
By examining the firm’s customer database, people may be divided into five categories: regular, heavy shoppers; regular, light shoppers; infrequent, heavy shoppers (those who seldom shop with you, but who spend a lot when they do); infrequent, light shoppers; and former shoppers (people who once shopped with you, but who have not done so in at least sixth months or a year). Different communications approaches should be tried with each of these groups.
What medium should be used to communicate?
Personalized communications should predominate. Therefore, E-mail with each shopper’s name (and not with “Dear sir or madam”) and telephone calls should be the media most used. Because E-mails are less costly and can reach a large group quickly, they are often the preferred medium for communicating with current customers. However, if a firm wants to show greater interest in its regular, heavy shoppers or to try to recapture some former customers, phone calls better indicate to people how customer-oriented a firm really is.
How often should communications with current customers be conducted?
E-mails should be sent at least monthly. If possible, a phone call just to keep in touch with customers (not to sell anything) should be made at least once or twice a year. As we have noted before, customers are often impressed when they receive friendly rather than just sales-oriented E-mails and calls; they like to feel appreciated. Obviously, product/theme communications should be sent at appropriate times during the year.
What should be the mix of communications targeted at current versus new customers?
The typical small firm, as well as some larger ones, allot very little (or nothing) from their promotional budgets for communicating with just their current customers. They either spend all of their budgets on attracting new customers or, more often, they use the same messages for both current and new customers. Our recommendation is for retailers to spend a minimum of 15-20 percent of their promotional budgets on messages targeted exclusively to current customers.