Cover Story: A How-to-Do-Everything-Great-in-2012 Guide for Cross-Channel Retailers
How to Make Your Customers Love You
Once upon a time it was enough to keep customers satisfied. In today’s they-can-find-it-anywhere-and-maybe-even-cheaper world, satisfaction is simply not enough to keep customers reliably coming back with money and friends. You need to think beyond satisfaction if you want to build loyal, long-term customer relationships.
When customers are loyal, they help you build a robust bottom line. They buy more often, they give useful feedback, they’re less price sensitive, and they refer you to their friends and colleagues. In short, they make your life easier, helping to reduce things like marketing costs and even employee turnover. But there’s a catch: Loyalty takes focus, attention and effort to build.
What’s the difference between a satisfied customer and a loyal customer? Emotion! Loyalty is an emotional connection with the customer. It’s built on trust, confidence, security, appreciation and even affection.
Think about your favorite restaurant, catalog or coffee shop. Do you ever find yourself saying something like “I LOVE Sam’s restaurant” or “I love Isabella’s catalog” or “I love Starbucks”? Maybe you profess love for your auto mechanic, hairdresser or dentist. When you feel a company really cares about you, you care back.
Neuroscientists have literally looked inside consumers’ brains to see what happens when someone is shown a logo of a company they “love.” No surprise here, the very same area of the brain that’s activated when in love is activated when shown that logo.
That doesn’t happen when someone is “satisfied.” Want to activate the love your customers have in 2012? Think about their emotional needs, not just their practical needs. What do your customers need to feel? That they’re cared about, valued, appreciated, important, special, confident, secure, happy, delighted, warm, welcomed, engaged, invited or any combination of those. Identify their emotional needs and get everyone on board to deliver them. — JoAnna Brandi
How to Offer Free Shipping and Still Be Profitable
Consumers and carriers are squeezing online retailers. Consumers expect free shipping and carriers keep raising prices. So how do you offer free shipping and still turn a profit?
The key is to reduce your shipping costs as much as possible to minimize the cost impact of free shipping promotions. Here are several ways to do that:
- Include the U.S. Postal Service. Only shipping with FedEx and UPS? If you ship lightweight, residential packages, USPS is hard to beat. It doesn’t charge residential add-ons, delivery area surcharges, or fuel and other surcharges. USPS offers a variety of pricing options including retail, regional pricing, cubic rating and volume discounts in addition to flat-rated products. First Class parcel service and other USPS products can cost up to 70 percent less than comparable services with FedEx and UPS.
- Give your customers deferred delivery choices. Consider adding deferred residential ground shipping alternatives to your website — e.g., UPS SurePost, FedEx SmartPost, Newgistics and EquaShip. These delivery methods may add days in transit, but at significantly lower pricing than FedEx and UPS air and ground services. While the goods being purchased often dictate the shipping method — e.g., frozen steaks on dry ice must be delivered within two days — when presented with choice many online shoppers choose the low cost (or free) delivery option, even if it means a longer transit.
- Try free in-store shipping. For those online sellers with a retail presence, consider offering free shipping for pickup in-store. Not only do you avoid high-cost residential delivery charges, but you maximize cross-sell and upsell opportunities. As an added benefit, this tactic lowers the cost of returns, too.
- Charge membership dues to offset shipping costs. Amazon and other leading e-tailers offer free shipping for customers that pay an annual fee to access free deferred shipping or low cost express upgrades on eligible products. Membership programs help to not only defray shipping costs, they also enhance customer lifetime value.
- Free shipping with minimum purchase. Many companies have been successful with free shipping offers for orders over a certain value. This improves retailers’ chances of profitability by creating a floor-to-order value, often prompting shoppers to buy additional items to achieve the free shipping threshold.
- Exclude certain products and ship-to destinations. Online retailers should be careful to exclude certain products from free shipping promotions. These include low margin products, those that incur higher shipping charges due to size or weight, and orders for international and offshore customers. — Rob Martinez