How do you keep your present customers coming back?
Q: "Is it often much more expensive to try and get new customers compared to getting your present customers to buy more?”
A: Yes. It costs you a boatload of money to get more customers. In fact, I was looking at the numbers for Wayfair. It's a big online shopping site. You may have heard of them. They sell furniture - all things. Their cost of acquisition, which is what it costs to get a customer, was pegged at $195. Let that sink in.
They have to spend almost $200 to get a customer and that average customer's buying something that had cost $400. I think they're giving free or low price shipping both ways. So you do the math. If they didn't have VC money behind them, would they be able to be in business? Absolutely not. Well, the same for you is knowing your numbers.
So yes, it costs a lot more for you to get a new customer than to take care of an old one, but he goes on. What are the key things to do to give your present customers the best possible service and deals so they want to keep visiting your shop?
Well, the best way is you have an exceptional experience, so when they walk out of that door, they say, “wow, I would go nowhere else.” You know, they have, on their butt it's branded your brand and they couldn't imagine going anywhere else. Unless and until you have a branded shopping experience, you are going to have people who are loyal to price, not loyal to the store. And that's a very big deal. Because let's say you're convenient. Let's say you're on the way from here to a city that's 10 miles away and you're on my way. Well, you have me as a customer because maybe there's no one else around.
See also, How To Build Retail Customer Loyalty
What happens if somebody comes in four miles from me? Am I going to go out of my way to come visit you? Maybe, but probably not because most of us havn’t really worked on a branded customer experience.
That's what makes a loyal customer. I do yoga and I go to Lululemon and they do an amazing job, but I don't do all the stuff they do. I just know the stuff that they do in their local community. So you see their local yoga instructors are around, their pictures are around the store. They move out all of their racks so that they can do yoga every Sunday afternoon. They set goals for every one of their employees to develop them, whether they work with Lululemon or whether they go onto other things. So you get this whole philosophy. You get this whole idea of what that shop is like and it sticks with you.
Now compare that to your toy store, jewelry store, gift store, whatever it's going to be, and you're just a warehouse selling stuff. I don't think that's a compelling reason for me to want to come back.
So to your point, you're asking what deals to get them to visit your store. Look, you know there's always somebody cheaper and because you put 20% off this weekend only, I know that if I walk in there on Monday, you're not going to be 20% off, so that's kinda gone. That whole leverage is gone. The only thing you can feed on is the experience in your four walls.
So if you want to have great customer service, then you're going to recognize me when I walk through the door and you are going to say "Hi, Bob," and you're going to be able to have a different conversation because you remember what I bought from you before, etc.
Or if that's really too granular for you, at least you were going through and treating me with an exceptional sales process because there are three parts to a sale. There is first, engaging a stranger and then discovering the shopper and then making the customer.
Most retailers work on the last one, but that would be like going to a movie and having half the movie cut off. You wouldn't have any affinity to it. You wouldn't understand it. You wouldn't really feel like, “oh, I want to have that experience again,” because all you're really trying to do is to get me to buy your one widget today, which frankly, that's just not worth the effort to drive out of the way.
I will drive out of my way if I have an exceptional experience or I get a positive energy, right? I don't have Bitter Betty behind the counter.
"Next. Is that all for you? Here's your change. Next." That may not be you, but that is the perception of a lot of brick and mortar retailers right now, which is not an exceptional experience.
What it is, it's not even an average experience. It's work to go to your store because you haven't thought about how to merchandise it. It isn't Instagramable. You haven't had training for your employees. You're just happy. Somebody can basically come in and fog a mirror.
There's no criteria. So, of course, there's no feeling with the shopper.
And the problem is, the shopper becomes loyal to your low price, not to that experience."