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What's in a Name?

The value of a customer

Did you hear that collective sigh? It was the sound of various retailers as they read the newspaper article talking about the closing of another dot com retailer.

There was however, an interesting point about their closing; as they filed their bankruptcy proceedings, one of their "assets" drew a lot of attention. The asset was the names and addresses of those who had purchased from the now deceased retailer. The concern was to ask if, because of Internet confidentiality rules, this information could be sold.

The surprise with the news article was that the retailer had been offered $20 per name by a competing dot com retailer. What does this have to do with your business? Perhaps, nothing in a direct sense. But the point we draw from that news article is to ask a question. If the name and address of some individual, living somewhere in North America is worth $20 to a business that will never see that customer walking in their front door, what is the name of a customer that has shopped in your store worth to you?

Unfortunately for too many businesses, while they realize there is a value, they do nothing to capitalize on that information. And if a retailer does not find a way to speak to that customer on a regular basis, then they are not placing any real value on that information.

Imagine the customer that has walked into your business for the first time. Unless you ask the customer, you probably do not know how they found your business.

Perhaps they came in because they saw that sign in front of your business. Hopefully, they are visiting your store because another customer recommended your store, or because someone you know said your store was the place to buy some item. The key for your business is to know as much about this customer as you can.

Let's look at an example. A customer walks into your store and purchases an item. Wouldn't you like to have the name and address of this person? The purchase of this item is giving us a very clear message; we have the potential for a customer that will return to our business many times.

The only technique that we, and our sales staff need to learn is how to ask the customer for the personal information without becoming offensive. Let's look at conversations that could work.

The first occurs when the customer asks for a certain item that you do not have.  Your salesperson could ask, "When do you need it?" With an answer that provides you with some lead time, you could order the piece from your supplier.  Of course, the customer would be giving you the necessary information to contact them.

On a side note, for the customer that tells your salesperson they need the item as a gift for a birthday party this weekend, the exceptional store will take the contact information and then send one of their employees to the competition to purchase the piece. Upon returning to the store, you resell the piece to the customer. Why go these great lengths? It prevents your customer from seeing the competition, and puts you in the top 1% for customer service efforts.

If the customer is shopping for no particular occasion, a great response would be, "We have several on order. I would be glad to give you a call on the day it arrives so that you could be the first person to come in and look at it."

This conversation probably helps a customer to think that you have a store that is genuinely wanting to satisfy their customers. What if you do have the item on hand? If the customer is paying by check we have access to the necessary information.

And for the customer who is making a purchase with cash? We have to invent a way for us to get the information. Perhaps you are selling an item that come with a warranty.  While it is probably not the responsibility of your shop to resolve warranty problems, consider this approach; explain to the customer that the item has a warranty which requires a proof of purchase. If the customer will provide you with the name and address information, you would create an index card which you will keep on file along with the information about their purchase.

When the customer needs to replace an item under warranty, you can easily create for them a duplicate sales slip as they have most likely lost the original. And again for the extreme retailer, we have met one whose policy is to simply exchange the item for the customer and then takes it upon themselves to resolve the warranty with the manufacturer or their wholesaler. Is this a lot of effort? Of course it is! But according to that retailer who has tracked his efforts, while the dollar amount of such exchanges has increased over the years, as a percentage of sales it has decreased. He credits the increase in sales to his "total customer care" policy.

Of course, as we gather these names and addresses, what are we going to do with them? After all, we did begin this discussion by looking at the Internet retailer. The retailers we have seen profiting the most from this information make a point to communicate with the customers on a regular basis - quarterly, if not even monthly.

Create a newsletter telling about what new items are in your business, including a coupon which goes only to those on your mailing list. If not a newsletter, try a postcard or an e-mail which invites customers to a special sale which is held after hours.

There is an old adage which most definitely applies to this store; "A dog with a full food bowl, does not go about looking at other dog food bowls." A customer who is getting their needs met in your business is not going to go about looking for another business. And if the Internet retailers think there is so much value in a name, you should probably place even more value in the name.

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This article is copyrighted by Tom Shay and Profits Plus Solutions, who can be reached at: PO Box 1577, St. Petersburg, Fl. 33731. Phone 727-464-2182. It may be printed for an individual to read, but not duplicated or distributed without expressed written consent of the copyright owner.
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Profits Plus Solutions, Inc.
PO Box 1577
St. Petersburg, Fl 33731
(727) 464-2182
Fax: (727) 898-3179