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Making Friends With Your Customers

BY Dan Berthiaume

Business and friendship are generally considered incompatible. It’s hard to take the dispassionate, profits-first mindset that traditionally governs business transactions with a person you think of as a friend. However, in this burgeoning age of social media and social commerce, retailers need to make friends with their customers to maximize engagement, loyalty and profits.

Many years ago, someone I know worked at a golf course where management’s official directive on customer service was, “Customers are sheep. Take their wool and move them along.” While this approach may have worked in the 1980s, it does not work today. The advent of social media has created a highly personalized customer dynamic where shoppers do not necessarily just want to find the cheapest possible products, but want to engage with a retail brand on a more intimate level.

Modern customers want to know the retailer’s story, hear about charity and community activities that make them admire the retailer, and receive personal recognition for their patronage in the form of individualized discounts, rewards and promotions. In short, they want to make friends with the retailers they choose to shop. And while treating customers as your friends rather than as faceless sources of revenue probably does sacrifice some short-term profitability up front, the long-term payoff in loyalty, engagement and evangelization more than compensates. First let’s look at a few key steps to making friends with your customers via social media, then review a few key benefits.

1. Friends give gifts. Friends give each other gifts, whether for a special occasion, to say thanks, or for no special reason at all. If you want your customers to become your friends, giving gifts once in a while is very helpful. These gifts can be special discounts, free products or social media perks such as points or rewards in a social game or access to exclusive, social media-only product previews and advance sales.

2. Friends help each other out. Beyond giving gifts, friends offer each other assistance. You should offer your customers advice, tips, product instructions and any other information they may find useful. Take it a step or two further by letting customers reach out to each other for help on your social media page, allowing customers to become social media subject matter experts, and even performing “social listening” to identify complaints and concerns your customers are expressing via social media before they bring them to you.

3. Friends push each other to be better people. Social media is a perfect venue to both demonstrate your commitment to community involvement and engage your customers in community activities. A social signup form for a local charitable event you are sponsoring will likely drive much more involvement than in-store signup sheets and social media also allows you to do things like run contests where customers submit ideas for community programs you can help run and/or sponsor.

So what do you as the retailer get from making friends with your customers, beyond general goodwill and image enhancement? Let’s drill down to three specific, more granular benefits.

1. Friends brag about each other. Friends like to boost their own standing by telling other people about what great friends they have. In the social commerce world this is known as “evangelization.” Having your customers tell other consumers about how great you are, especially if they do so in a social forum, is a free form of advertising that can prove much more effective (and less expensive) than any paid campaign in any medium.

2. Friends stay loyal. A true friend is a loyal friend and won’t ditch their longtime buddies because a newer, more popular person comes along. Want to stave off competitors who may be offering something newer, less expensive or trendier? Build deep personal relationships with your customers through social media and continually nurture and strengthen them with the methods suggested above.

3. Friends tell you how it is. A real friend will praise you when you do something right and also gently but constructively criticize when you do something wrong. Socially engaged customers will provide you with invaluable free feedback and advice that you would otherwise have to obtain from expensive and time-consuming focus groups. And unlike focus groups, social feedback is continuous and occurs in real time – some retailers have even been able to modify marketing campaigns while they are still going on, recapturing promotional ROI and market share that otherwise would have been lost.

I started this column with the commonly held wisdom that business and friendship don’t mix; I will end it with the commonly held wisdom that you can never have too many friends. Most old saws hold at least a grain of truth, but in this case the fact that a retailer you can never have too many friends holds more grains and tips the scale.


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J.Cage says:
Jul-09-2013 12:47 pm

Interesting, retailers can share data with consumers through social media and personalize the shopping experience. Read a whitepaper on this very topic that readers will find very interesting "Thinking about tomorrow: Post-recession strategies for retailers” @ http://bit.ly/10XoIQa

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ThinkGeek to take the Internet to San Diego Comic-Con

BY CSA STAFF

FAIRFAX, Va. — ThinkGeek.com is taking the merchandise it offers on its e-commerce site to Booth #5541 at the San Diego Comic-Con, from July 17-21.

The Internet retailer will offer con-exclusive merchandise such as Minecraft Gold Swords and Pickaxes, Portal 2 Deco Starfield Turrets and Bravest Warrior pin packs and party masks, as well as a wide selection of other ThinkGeek merchandise, including a gold- and silver-plated working Sonic Screwdriver Universal Remote from the Eleventh Doctor which will surely have Doctor Who fans and cosplayers flocking to the booth like companions to a glowing TARDIS. ThinkGeek will also offer most of the con-exclusive items on its e-commerce site while supplies last.

ThinkGeek is a wholly owned subsidiary of Geeknet, Inc. Since 1999, ThinkGeek has offered apparel, toys and gadgets to its niche, but ever-growing, market.

The company leverages social media, most notably its Twitter feed and its YouTube channel, to engage existing and potential consumers and offer incentives, such as discounts or buy one-get one offers, to drive traffic to its site. Once on the site, shoppers can sign up for ‘Geek Mail’ to receive email blasts that showcase new merchandise, sales or discounts with offer codes and if they register free they can keep wish lists on the site. The company also offers a loyalty program wherein shoppers can earn ‘Geek Points’ with purchases that they can then redeem later to get free merchandise.

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Sears faces class-action lawsuit by Canadian ‘Hometown’ store dealers

BY Marianne Wilson

Toronto — A "Sears Hometown" store owner in Woodstock, Ontario (Canada), has launched a class action lawsuit on behalf of approximately 260 Sears Hometown dealers across Canada against Sears Canada and its American affiliate, Sears. Both are subsidiaries of Sears Holding Corp.

The lawsuit alleges that Sears lowered dealers’ commissions, reduced advertising for local stores and bypassed the franchises by selling directly to customers who are located within their markets.

The dealers also claim that Sears is setting their compensation and work conditions, without abiding by labor laws or franchise protection laws.

"We are tired of disappointing our customers because we lack the resources to serve them properly," said Jim Kay, the dealer who filed the class-action lawsuit, in a statement. "We are tired of disappointing our customers because we lack the resources to serve them properly. We are tired of facing the public without a smile, because we know there is no paycheck at the end of the week. We are tired of being fed scraps for the benefit of a U.S. hedge fund billionaire."

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L.Sampson says:
Sep-23-2013 06:47 pm

I am Sears Hometown Store owner in the United States, and, it is the exact same thing here. We are not surviving, much less making a profit. The business model is designed to solely support the holding company and not benefit the owner. Sears puts the inventory in the stores while the owner is solely responsible for the overhead and operating expenses of their store. The margin is so low, it is unbelievable. Owners are paid on average less than 10% margin on sales plus have the "opportunity" to earn a so called bonus based on specific metrics set forth by the holding company. I expect to see a drastic decrease in Sears Hometown Store owners in the near future. Unless SHOS can come up with a much greater commission percentage that benefits the owners and makes the endeavor worthwile, they will not be around long.

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