By: Wojciech Kic
In retail, year-end holiday themes frequently address business profit margins. The ever- recurring theme is the all-important “After Thanksgiving Friday,” commonly viewed as an indicator of economic progress.
The year-to-year sales comparisons validate not only the strength of the economy, but also the success of new marketing approaches to reach the customer. This year the target is customer relationship management, which focuses on increasing sales to and profits from the best customer, by eliminating the marginal, mostly unprofitable customer.
The pesky, perennial worst customer has been warned to “shape up or else.” No more buying products at a loss to the seller, no more endless returns, no more complaints about products that fail to satisfy needs, no more tying up 800 lines and discussions about the quality of service in chat rooms. No more lowest price shopping here and there. No more!
We are in pursuit of the loyal, best customer!
New, high-tech tools are employed in the pursuit of the loyal, profitable, best customer. Customer spending habits are tracked and recorded in a myriad of ways. So called “cookies” follow the Internet surfer’s every move from site to site, grocery stores track customers’ buying habits with “loyalty” cards, and insurance companies gather information about the insured’s conduct.
The customer typically submits personal spending data to business providers voluntarily. Grocers, for example, secure personal spending data by ensuring participation in “loyalty” card programs. Non-loyal customers, those without a “loyalty” tag, pay higher prices.
Newspaper Internet editions demand, as payment for permission to read, the reader’s name, age, sex, address and the level of personal annual income.
The information customers provide is viewed as vital to the creation of the loyal, profitable, indeed, the best customer. Studying past purchases is considered key to predicting sales in the ever-evolving future. If business owners only knew buyers’ spending habits, purchases would be predictable, and the customer would be provided with exactly what he wants when he needs it.
From the customer’s perspective, the frictionless, high value, totally loyal transaction has some basic requirements. Contrary to popular sales training, the customer does not want you to know his pet’s name. She does not want you to know the name of her spouse or her children’s names and the colleges they attend. Really, lest you disclose the details about him to somebody else, the best customer does not want you to know his name. The best customer demands total anonymity. On top of that she demands that you know exactly what she wants when she needs it.
What is a business owner to do?
The expectations of the best customer are signaled entirely by the worst customer. The worst customer takes time and interest in educating a business about service problems, no strings attached. It is the worst customer who signals business owners by crowding the aisles when goods are sold below cost. It is the worst customer who returns the poor quality goods. And it is the worst customer who demands the service that was seemingly advertised, but not offered or delivered. If only customers were not so difficult.
Since business owners do not view the worst customers as rational, and they reject their message, the worst customers get frustrated. The frustration takes many forms. Screaming at salespeople, arguments at check-out counters, and the looks.
Business owners do what they can to contain the worst customer. My cell phone provider for example has a security guard at the entrance to the store. On a query, a salesperson revealed . . . “Some of our customers get really angry.” Thus the worst customer’s message is lost.
The worst customer is the test customer.The degree to which a business owner relates to the worst customer dictates the quality of the business product. Without quality, a business will never attract the best customer.
But what about the customer who always wants the best deal? That customer who will never pay what it takes to stay in business? This customer will always pay the market price for a quality product so that it can be secured, again, tomorrow, but not a penny more.
The best customer on the other hand does not have time for the business owner. She is always polite, smiling and unforgiving. If the business owner does not offer exactly what she wants, she does not return.
The worst customer is the golden nugget of sales. If retailers only realized that the path to the best customer begins through the worst customer, they would pursue the worst customer with abandon.The reward of retention of the worst customer is a frictionless and profitable business transaction with every customer.
Can a business owner overcome his aversion to the worst customer? If not, the pursuit of the best customer’s love and loyalty will remain a pipe dream.The predictability of a company’s demise will be all but assured.
So this holiday season, treat your worst customer the best, all the time, lest he not return. Embrace him warmly and thank him for helping you when you thought you didn’t need it. He is your most prized customer. The race for the best customer is now over.
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