Your Brick and Mortar Can Do Better at Customer Retention Than Amazon
You Hold the Key to Customer Retention
If you’ve been reading our blogs about the Amazon Effect, hopefully the thing that stands out is that a personal relationship with your customers is the advantage your brick and mortar store has over the online retail giants and despite any amount of artificial intelligence (key word artificial) or other technology that attempts to simulate a human-to-human experience.
Relationships have been the intangible benefit of customer awareness and customer acquisition, but when it comes to retention of customers, there is a tangible benefit as well—cost.
ROI of Customer Experience
As the The Amazon Effect and How Retailers Can Slay the Beast says, “online retailers spend almost 80% of their digital marketing budgets acquiring shoppers, and for each 1% of shoppers who return, the overall revenue increases 10%”.
By working to continue the work you’ve done bringing in customers, you can more easily retain your customers. This allows you to adjust your marketing budget to spend more on awareness and acquisition—and gain more customers.
More Retention, More Savings
Another way you can shift your spending is by expanding the number of products you sell but limiting the stock. Because online retailers have to commit to buying product lots, they have a large overhead of products they may or may not be able to sell (hello Amazon Prime Day!). By working with your existing customers, you can better gauge their interest in, say, the latest seasonal craft beer. Knowing the interest in a product category, you can “stock shallow and exclusive”. This allows you to stock enough product to provide to your customer interest without the product becoming “stale”. Also, as discussed in our last blog, built in exclusivity creates interest. If your new product is only available for a limited time and you’ve purchased enough for your loyal customers and just enough for interested newcomers, the product won’t have time to sit around and become dusty.
Beyond the ability to appropriately stock for your market, more frequent introduction of products gives you more content to message about. You can post on social media the new stock of must-have spring shoes that just came in on Tuesday and by Thursday have a new batch of waterproof spray for them giving you the opportunity to post content about the shoes, the spray, and the spray with the shoes!
What Does it All Mean?
The core message behind the Amazon Effect is that customers are looking for brick and mortar stores close to them. They want to build interpersonal relationships with retailers like you to have a customer experience that is driven by more than an algorithm based on previous purchases. Once you move customers through the entire funnel, the relationships you build and the effects they have on your customers will keep them coming through your doors and will also help you gain the all important word-of-mouth advertising. This naturally reduces the cost of marketing because you do not have to spend as much to retain customers because they will already be loyal to you and will tell others about their experience with you. Your store and your employees are in the optimal position to fuel the cycle of the customer journey: awareness, acquisition, and retention.
When someone expresses empathy for your brick-and-mortar battle against online retailers, just smile, remember the Amazon Effect and take the opportunity to take the first step—make them aware.
