Keep 'em coming: how committed are your customers to your store? Here's how to cement your relationship so they'll never stray

Pool & Spa News, March 12, 2004 by Julie Sturgeon

Beware of a satisfied customer.

In the mid-1990s, Xerox commissioned a survey that is often cited by marketing consultants today. The study revealed that seven out of eight shoppers who say they are "satisfied" with a company would still do business with a competitor if given the chance.

Only when those consumers consider themselves "very satisfied" of "ecstatic" does that trend reverse to where only one in eight will defect.

"So if they tell you they're very satisfied, yet they're not coming back ... they're lying," says Jon Schallert, president of The Schallert Group in Sorrento, Fla. "The only gauge for loyalty is the number of repeat purchases, with a continual increase in the transaction amount."

The same is true for retailers in the pool and spa industry. Maria Garety, co-owner of Garety Pools & Spa, has tracked a pattern in her Herkimer, N.Y., store: Roughly 75 percent of new-pool customers continue to purchase their supplies from her for the first few years, but then they begin to drift away. "It's like they feel they have to come here [initially] because they want that security of knowing we'll take care of them," she says.

Where pool and spa dealers such as Garety go from here requires nothing less than obtaining a better understanding of their core business and goals--and their customers.

Forgetting what you know

Most retailers seeking to create customer loyalty offer a sale price. But study after study proves that discounting attracts the least loyal customer, Schallert warns.

"Price-discount consumers are like Enron stock," he says. "You'll spend the most amount of time with them and get the least return on your investment."

The second mistake? Retailers commonly define customer service as greeting the customer, smiling and thanking them for the order. Schallert's message sounds sacrilegious, then, when small businesses first hear it: "Don't think about how good or poor you are at customer service," he says. "Think instead about creating additional customer services."

As long as it's something no one else offers, that magical difference can be as simple as staying open later than your competition one night a week--of issuing special invitations to a presentation by a manufacturers' agent. Even providing educational literature near the water-testing area wins points with Schallert.

For Brenda Murr, vice president of Mermaid Pool, Spa and Patio in Anderson, Ind., that edge is her vacation-sitting service. Her customers needn't entrust their pools to well-meaning but ignorant neighbors while away; they simply pay a minimal fee and Mermaid technicians maintain pool chemical levels during the homeowners' absence. Murr also is exploring the feasibility of adding an emergency-maintenance option this season.

For those who want to follow her lead and add services to their offerings, experts suggest that they get better acquainted with their customer bases first. Otherwise, they could commit to funding programs that don't solve their problems, of that only appeal to small populations.

"I tell business owners to identify their best customers, the ones who require the least amount of marketing dollars to get the biggest bang for the buck. Use them as a springboard to figure out what extra services this group needs," Schallert says.

Hint: Today's consumers highly value services that offer time savings, provide access to information and prevent costly mistakes.

Mermaid Pool found that its frequent-buyer program, which offers people convenience and cost savings, allowed the firm to maximize its impact on shoppers. As part of the plan, customers who purchase $175 worth of chemicals in February can obtain a 10 percent discount year 'round. Thanks to a sophisticated point-of-sale system, Murr not only tracks individuals' purchases for the future discount, but she also can call up previous seasons' purchasing volumes and the dates to help her customers plan properly for the year.

"We used to give out little buyer's cards, but now it's all on the computer so they don't have to worry about it," she explains. Murr considers the program a success: It has helped increase her steady customer list from 1,200 to 5,800 in less than three years.

Clarifying your vision

Over time, the average retail owner loses the ability to see their store through the customers' eyes, says Jill Griffin, a small-business consultant in Austin, Texas, who wrote Customer Loyalty: How to Earn It, How to Keep It, which is on Harvard Business School's "Working Knowledge" list of recommended books.

"What does your store look like, feel like, smell like when you walk in for the first time?" Griffin drills. "What about when someone calls on the phone? Has a question about a product? What is the essence of the customer's visit, and how do you make that an ideal experience?"

This school of thought led Garety to renovate her store five years ago to create a homier feel. "We needed to keep up the retail appearance because just 100 yards down the street is a Wal-Mart, and tons of people pass by because of it," she notes.