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Customer loyalty and store cards
encourage repeat purchase of products
and also provide businesses with the
opportunity to gather data about their
customers’ shopping habits.
the business. Making your
customers love you therefore hinges
on both the quality of the product
or service and the benefits for the
customer in remaining loyal to a
particular brand or company,
whether that’s for convenience,
a bargain, or a feel-good factor.
Cultivating loyalty
Pioneered by the airline industry
with its frequent-flyer programs,
the idea of loyalty programs is
especially important to retailers.
A successful loyalty program will
not only offer customers a “money-
back” type of incentive, but will
also enable the business to gather
data about customer preferences,
spending habits, favored brands,
and reaction to promotions.
Retailers use this data to make
decisions about what products to
stock. Through its loyalty program,
US department store Nordstrom
records the size and color
preferences of customers, as well
as birthdays, anniversary dates,
and other personal information. It
offers “Fashion Rewards”—points
earned for every dollar spent with
its store card. When a customer
has accumulated a certain number
of points, they receive “Nordstrom
Notes,” which can be redeemed
against future purchases. Many
other stores around the world run
similar loyalty programs.Online challenges
Retailers who exist online potentially
have more to gain from loyal
customers, but first they have to
overcome the lack of an immediate
emotional connection provided by
the ambiance of a physical store.
For example, Zappos, the online
shoe seller, uses its call center to
forge relationships with customersSUCCESSFUL SELLING
and win their loyalty. For founder
Tony Hsieh the call center is not a
running cost, but an opportunity
to market. Call center employees do
not read from scripts—they seek to
make an emotional connection with
customers. Their reputation for
going out of their way for customers
is now enshrined as part of the
brand. Simple tactics such as
sending goods ahead of schedule,
and a 365-day returns period, have
helped to build a repeat purchase
rate reported at about 75 percent.
CEO of Amazon Jeff Bezos
paved the way for the development
of customer satisfaction in the
digital era. Bezos was able to
overcome some of the potential
stumbling blocks of Internet
retailing, such as customers not
being able to touch the products
and having to wait for delivery, since
its customer service includes next-
day delivery and free returns. The
company has consistently ranked at
the top of the American Customer
Satisfaction Index. As Bezos
asserts, “If you make customers
unhappy in the physical world, they
might each tell six friends. If you
make customers unhappy on the
Internet, they can each tell 6,000.” ■Is the customer always right?
Department store owners Harry
Gordon Selfridge (1857–1947),
who founded Selfridges in
London in 1909, and Marshall
Field (1834–1906), who in 1865
started the store bearing his
name in Chicago, are both
credited with coining the phrase,
“the customer is always right,”
which has come to mean that it
is cheaper to retain a customer
than find a new one. In an era of
overblown product claims it was
an approach designed to attract
the burgeoning middle classes.However, since the 1990s,
marketers have adopted a more
discriminating approach to
customers in the belief that the
customer is not always right.
Each customer can be
measured by their individual
return on investment (ROI)
or lifetime value, allowing
customer-service efforts to focus
on the more profitable patrons.
Using ROI, some businesses
differentiate between customers
who are always right and those
who are not worth listening to.The customer can fire you
by simply deciding to do
business elsewhere.
Michael Bergdahl
US director for people, Wal-Mart
(1954 –)