5 Questions Retailers Must Tackle to Attract and Retain Customers
2. Do you really know your customers? Do you know what pushes their hot buttons? Do you know what makes them buy? Do you know what's important to them as you're building your product mix and operationalizing your products and services?
Zara has built its business around understanding its customers’ incentives to buy. By investing in product speed and fulfilling its customers’ needs, Zara has developed customers who, on average, visit its stores 17 times a year. The retailer sells 85 percent of its inventory at full price.
Zara understands that its customer is the fashionista who has less money in her pocket, but a thriving desire to have the newest fashion. It knows its customers are constant shoppers who want to wear the newest, latest trends. Zara has 200 people in Spain who are constantly creating product, and the brand turns its inventory every three weeks to lure its customers back into its stores.
Because Zara understands what drives its customers, it's decided to spend less on advertising and more on product development and product speed, which is what its customers really want. Knowing your customers and using data to understand how and when they buy and their buying behaviors can give you insight on where to invest and what to operationalize.
3. How proactive are you? Do you examine every interaction you have with your customers? Are you proactive in understanding when you disrupted their day, their week or their month because your processes aren't up to par? You're not delivering to your customers at an optimum level when you're not actively looking at your data, understanding where the failures occur, and reaching out to your customers before they reach out to you.
Southwest Airlines is a great example of a company that gets this right. Every day Southwest Airlines looks at every single flight that goes out because it wants to know what customers had their day interrupted, whether it's from something that the airline caused (e.g., an electronic failure) or simply weather. Every morning it convenes a morning overview meeting. In that meeting are meteorologists, operations people, flight staff and someone The New York Times has dubbed the "Chief Forgiveness Officer." This team looks at every flight from the previous day, and based on the disruptions to a customer's day, they send out personalized letters to customers apologizing. Before a customer picks up a phone they've heard from Southwest.