GETTING IT RIGHT IN RETAIL

Carlson Marketing Puts Retailer’s Relationships to the Test

New research from Carlson Marketing Worldwide focuses on the question: Do consumers have relationships with retailers? The answer appears to be a qualified “yes.”

According to the Carlson Relationship Builder (SM) 2007 study on the current state of customer relationships within the retail industry, and the 1,200 consumers surveyed, customers do have relationships with their retailers, but the range of strength varies broadly. Among the retailers with the highest level of relationship strength are Barnes & Noble, Hallmark, Bath & Body Works, Best Buy, Old Navy and Target. However, the study also found substantial room for improvement in all cases.

Participants in the research study answered numerous questions on a range of topics, including whether they would encourage friends and family to shop at a specific store, whether they would still be a customer of the store a year from now, and how likely they would be to shop the store for more products within the next 12 months.

“Knowing that customers have varying degrees of relationships with retailers, the Carlson Relationship Builder 2007 study addresses the key question of whether it really matters if retailers get it right,” says Luc Bondar, vice president of loyalty marketing, Carlson Marketing. “We all know that building better relationships in retail certainly makes common sense, but at the end of the day, does it actually enhance customer recommendations, retention and intent to shop more with a specific retailer? The answer is a resounding ‘yes.’ Thriving and not just surviving in the retail marketplace requires more than just executing the basics. It requires building strong relationships that in-turn enhance customer recommendations, retention, and shopping.

“Today, some retailers are already doing this better than their peers,” Bondar continues, “but there’s ample room for improvement across the board. The use of loyalty programs, improvement of communications, customization, relevancy, and frequency are all one to one approaches highlighted in the study as mechanisms to ‘get it right’ and deliver results.”

For those looking to capitalize on the opportunity to “raise the bar,” Carlson Marketing and its strategic consulting division Peppers & Rogers Group, offers the following:

The Top Ten Things to Remember in Retail

1. Loyalty programs drive incremental purchases. Customers (33 percent) agree that direct participation in a loyalty program has resulted in the purchase of additional products from a retailer that otherwise would not have occurred.
2. Satisfaction is not sufficient. A large segment of customers (41 percent) are at least as satisfied with other retailers as with their primary retailer.
3. Here today, gone tomorrow. A majority of customers (51 percent) state that there are many other good retailers, any one of which could serve as an alternative to their primary retailer.
4. Walk a mile in their shoes. Customers agree that “being easy to do business with” (89 percent) and “having good customer service” (90 percent) are important attributes in preferring one retailer over another.
5. Aim for alignment. When the interests of the customers and the retailer are perceived as resulting in a mutually rewarding experience, this alignment enhances the customer’s likelihood to recommend the store or company to friends and family (69 percent), remain a customer (39 percent), and shop more at the retailer (43 percent). These percentages are for those with high as compared to low levels of alignment.
6. Brand is big. Customers (64 percent) agree that familiarity with the brand name plays a role in the choice of a retailer. The effect is even larger for those with a high versus low level of relationship strength.
7. Customers are human too. Among the top three most important considerations when interacting with customer service are staff courtesy (59 percent), apologizing when something goes wrong (32 percent), and being empathetic (28 percent).
8. Morality matters. Customers agree that the reputation (70 percent) and the moral values (50 percent) of the retailer are important when choosing where to spend their cash.
9. Websites work well. Customers (65 percent) use a retailer’s website for activities such as searching for merchandise, learning more about the store, and reading about news or offers. The percentage varies considerably by the type of retailer (department store, 71 percent; grocery stores, 44 percent).
10. Don’t botch the basics. Customers overwhelmingly agree that having the best price (93 percent) and a good selection / availability of merchandise (93 percent) play a role in determining where shopping occurs.