THE CLARUS Blog

Psst, Retailers: Here’s the Secret to Customer Loyalty and Retention

So, what does the former hit TV series Cheers have to do with unlocking the secret to customer loyalty?

Shep Hyken, one of the industry’s foremost thought leaders in the area of customer service, along with being a New York Times and Wall Street Journal best-selling author, tackled this question during a recent interview with the Atlanta Small Business Network.

When asked what today’s customers really want, Hyken responded with the following.

“I’m going to give you the perfect example,” Hyken explained. “Listen to the Cheers theme song. You want to go where everybody knows your name.”

Hyken added: “That’s the beginning of the true connection. That’s what customers want. They want to feel recognized. There’s a trend toward personalization in the market experience. They want to feel connected and feel that these people know me and understand me.”

 

Consumers Are Loyal to Brands They Know, Like, and Trust

According to Hyken, consumers are loyal to brands they know, like, and trust.

“Trust is an experience the customer likes that is simple and predictable,” he said.

Brand trust is critical for consumers, Hyken said.

“Confidence leads to trust, which leads to repeat business, which leads to customer loyalty,” he explained. “We’re looking to create consistency and predictability.”

Earlier this year we spoke to John Baumann, president and CEO of multititle cataloger Colony Brands, about the importance of customer trust.

“We measure, measure, and measure in order to understand how our customers are relating to our brands,” Baumann told Clarus. “Do our brands speak to our customers’ needs? Do they trust us? Do they see shopping from us for years to come? If the answers to those questions are positive, then we feel confident they will advocate for us.”

Baumann said that consumers have so much choice today and loyalty is more difficult to maintain than ever before.

“However, we believe that what makes people loyal has not changed,” he explained. “It’s like any relationship. Be consistent in your brand, be a good listener, react to your customers’ changing needs, and be trustworthy.”

 

Consumers Need to Feel Welcomed

Brands should make their customers feel welcomed.

Here are a few examples of retailers who roll out the red carpet for their customers.

During last month’s Wells Fargo Consumer Conference & Beauty Forum Conference, David Kimbrell, President and Chief Merchandising & Marketing Officer at Ulta Beauty, touched on this important subject.

“What our guests tell us that they really like about Ulta is when they walk into one of our stores, they feel welcomed,” Kimbrell noted. “They don’t feel intimidated. They feel like they can discover on their own terms.”

Chris Giles, Chief Operating Officer for the Oakland A’s, talked to Clarus about the team’s innovative season-ticket plan implemented at the start of this season.

The new membership program is called A’s Access, which tailors season-ticket plans and eliminates the traditional model. A’s Access acts like a premium loyalty program in that it offers attractive benefits for fans and raises engagement.

“Our vision is to take them from feeling like fans of the team to feeling like a member of our organization,” Giles told Clarus. “From passive to active. The program wants to maximize the value proposition, which many retailers focus on today as well.”

Meanwhile, Stitch Fix works with its customers directly.

A customer creates his or her Stitch Fix account and are the led through a lengthy questionnaire called the Style Quiz.

Every step of the customer journey is mapped, analyzed, and optimized by algorithms.  More than 80 data scientists work for Stitch Fix and focus on clothing design to package fulfillment and logistics.

Everything behind Stitch Fix’s original concept focuses on creating personalized offerings and makes customers feel like part of the company.

 

You Want to Go Where Everybody Knows Your Name

According to the 2019 Clarus Commerce Premium Loyalty Study, nearly 70% of consumers agree their loyalty is more difficult for a retailer to maintain than ever before.

Consumers love that feeling of exclusivity or being a member of a club.

But, the other side of that equation is retailers need to offer that to their customers.

Consumers want to form emotional connections with brands.

Consumers want to trust brands, feel welcomed by them, and always experience something that is consistent and predictable.

Consumers want to be loyal to brands that know them, understand them, personalize offerings for them, and always want to engage with them.

Simply put, a consumer wants to go where everybody knows their name.

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