Monday, June 14, 2010

Customer Loyalty and the Farmyard

Stats have said for years that it is much less costly to retain existing customers than search for new ones.  In the world of online retail sales, cultivating customer loyalty is particularly challenging, especially if the products being sold are unrelated, as in a consignment shop model.  If you're a specialty shop or department store, and have got multiples of a single item or a couple of  specialty skus, and those items are on the consumer's frequent purchase list, you've got a chance for repeat sales.  Otherwise, not so much. So in this new 'one-off' sales model, each new sale has the potential to be a customer who realistically may not care about purchasing from you again.  Interesting economic factors at play then - it's a buyer's market, and the cost to find the next sale just went up. If you believe in Cindy Solomon's customer loyalty advice, (author, "The Rules of Woo"), in this new environment,  it doesn't pay to spend any time on customers who come at you with a punitive grudge based on their last transaction in another online marketplace that failed.  Keen radar can help anyone spot the bad attitude approaching.  If it's possible to refer them away, we do it.  More and more, customers seem to be taking on the persona of  Oscar the Grouch during this recession.  With margins low and recession entrenched, it doesn't make much economic sense to placate the Grouch.  Our philosophy  is to let him sit in the can til it's over.  We strive to delight clients, we celebrate when they are appreciative.  Nana always said, you get more with honey than with vinegar, and what's good for the goose is good for the gander.  Seems like basic farmhouse wisdom applies even in the virtual world.

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