Your Customers Are Making You Crazy! Don’t Take it Personal. Think Lifetime Value.

As a specialty retailer it’s so easy to feel betrayed by your customers. Even your most loyal customers can burn you. After all, how many times have you gone the extra mile for a customer only to have them show up at your store to return that specialty wetsuit that you bent over backwards to order in, leaving you with a product that you can’t sell. Or what about when one of your good customers comes into your store to show you the new surfboard they just ordered from California, expecting you to share in their excitement. This was an all too common occurrence when I owned my business, and one that used to drive me crazy! It does feel personal, and it’s very hard not to be affected. As independent retailers we tend to think of our days in sales dollars, and every day is about exceeding a daily goal. So when a big sale needlessly slips through your fingers, or worse gets returned, it’s very hard not to be angry. But if you can detach yourself from the initial seething, there is opportunity in these situations to delight your customers, and get a piece of their wallet, but you have to approach it with the long term value of the customer in mind. Here are two examples of what I mean.

 

Example #1: Holding Back Information… “Why should I share my expertise if they are going to buy it somewhere else?”

This is a fairly common sentiment. I was speaking with the owner of a home decor retail business, and she had mentioned that she was going to limit the design advice that she gives to customers who had purchased items elsewhere. She was frustrated that good customers were buying items from her competition, then asking her how to best utilize them in their homes. While I understood her point of view, limiting the very thing that makes her special in the eyes of her customers, isn’t going to help her business. After all, these customers value her opinion and they trust her. In today’s retail environment, having loyal customers who trust you and your team is everything. Losing out on the sale of a mirror to a competitor is no doubt frustrating, but being able to react to the situation and understand that the customer is back in the store, and that there is still an opportunity to sell that customer something to complement the product that she bought elsewhere. It’s also an opportunity to further galvanize the relationship by doing what she does best – giving great advice that this customer obviously values. Even if she can’t create an immediate add-on sale, the free advice creates an opportunity for the next sale, and the next and while it would have been nice to put that $1000 in the till today, discounting the value of tomorrow’s $1000 is a mistake. If you can’t make a sale today, then sell for tomorrow. I’m sure most of you would sacrifice a $1000 dollar sale today if it meant $2000 tomorrow, $5000 this year or $50,000 over the lifetime of that customer.

 

Example #2: Arguing with a Customer. This one should be a no brainer…but …

I was standing in a line on December 23rd, and the lady in front of me was returning skis and ski boots that she had recently purchased so that she could “re-purchase” them when they go on sale on Boxing day. The Store Manager said “that’s kinda shady!” and the two continued to have a rather heated discussion while the return was completed. As independent retailers, this one literally feels like someone is reaching into the till and taking out a handful of cash. It’s almost impossible not to get frustrated, but you can’t. As in the situation above, there is still opportunity here, and you have to be able to think on your feet, and see the long term or lifetime value of the customer. A better response from the Store Manager might be something along the lines of…

“ok, let’s do that, but let’s make sure we put your name on these, and put them aside because our Boxing Day sales are usually crazy and there is a good chance that someone might snag these out from underneath you”

Despite our internal anger toward the customer and the situation, by openly looking out for her best interests we create an opportunity to sell her something else. Maybe today, maybe on Boxing day, maybe 6 months from now. If she had any misgivings about returning the items, there is a good chance that she now feels at ease because we have shown that we are looking out for her. Even if she doesn’t purchase additional items, the customer relationship is intact. The next time she needs new ski gear she will remember how well she was treated for the Boxing Day sale. In reality, I can all but guarantee this lady will not be returning to that store in the future, and I wonder if the Store Manager would think differently about his interaction with her, if he understood that he was losing a customer.

My point in sharing these stories is that it is easy to feel mistreated by your customers, and the feelings of frustration are often justified. But, if you keep the lifetime value of a customer front and center when dealing with these situations, you will be much better off and in the long run have a stronger business because of it. Keep in mind that customers can find the products they want with the swipe of a finger. Even when they seem to be doing everything possible to make your head explode, remember that they are standing in your store and there is an opportunity right now to delight them and keep them coming back again and again… as long as you take the long view.

 

Johnny McLellan Retail Coach Johnny’s retail background goes back over twenty years. His retail obsession started as a 15-year-old “shop kid” tuning skis in the back of the local ski shop. Since then, Johnny’s experience has included over a decade of retail entrepreneurship, highlighted by the creation and operation of a high-end Outdoor Sporting Goods retail business. Johnny’s passion is finding out what is possible within the modern retail environment. From new technology, to new ideas, Johnny works with like-minded retailers to uncover the strategies and tactics that produce results in this ever-changing retail landscape.

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