Showing Appreciation For Your Best Customers
Over the past few months we’ve been talking to a group of florists about their best personal customers, the value of those customers to their businesses, and the techniques they use to show their appreciation for their loyalty.
By “personal” we mean customers that are not buying for business reasons, but for their own use or as gifts for friends. By “best” we mean those that spend the most money – sometimes this means a high frequency of small to regular size purchases, sometimes it means fewer larger purchase, sometimes it means many large purchases.
Customers like this are important for a number of reason. First - they spend a lot of money. Secondly they can be great ambassadors. At the very least by frequently having your flowers in their own homes, or sending them as gifts, they are showcasing your work to other potential customers. Since people that purchase a lot of flowers for personal reasons tend to be affluent, and affluent people tend to have affluent friends, this is very important.
Given the value of this type of customer to your business maintaining their loyalty is critical. Making them more loyal, more passionate, and more vocal about your business is also important. But how?
Some things are obvious. At the top of the list would be customer service. People that spend a lot of money are sought after by all retailers and will expect the highest possible level of service. But everybody knows this. What else can you do?
Some people have suggested discounting, the idea being that you should reward and recognize your best customers by offering them a small discount on all purchases.
There are a number of problems with this. The first is that you are taking your most profitable of customers and, by discounting all their sales, choosing to make them less profitable. And, given that ideally all customers would be “best” customers, you're really committing to lower prices and less profit across the board.
But that is just the start of it. The reality is that people don’t care about small discounts. Saving a few percent just isn’t going to keep anyone loyal. Don’t believe that? The typical points-based loyalty and incentive programs reward at an average rate of about 2%. Why do you see so many loyalty programs like this, based on points, and so few based on tiny 2% discounts? Because points work and little discounts don’t. If you want to start getting attention you need to be discounting 10% or more and that would be ill-advised.
You also risk offending them. You’re basically saying “you are one of our very best customers and I have chosen to reward you with this tiny little discount!”. What do you expect them to say? They weren’t even thinking about money before, but know you are making them think about it, and suggesting that saving two pennies on every dollar is something that they will not be able to resist.
A lot of your best customers would resent that. But even if they don’t you are also showing that you don’t understand them at all. Remember – we’re talking about people that spend a lot of money on flowers. There is no reason to assume that price is their priority. In fact, if you think about it, they have probably demonstrated over and over again that they are far more interested in other considerations – quality of design, freshness of product, level of service, etc. They’ve really been telling you they are concerned with everything but price.
So why would you try and win them over with a tiny discount? It’s like making a birthday dinner for your spouse and saying “I know how much you absolutely love pasta with cream sauce so I’ve made you barbecued pork chops”. It just shows that you aren’t listening or understanding what they really care about.
What are the better alternatives? There are a number of good ones.
Some stores do open houses or parties with snacks and drinks, and limit the attendance to their best customers. This is good approach. Even if they are not able to attend the invitation is meaningful and conveys that you value them as a client.
Free delivery is another option. The delivery share is the least interesting part of what you sell and a “free” delivery or service charge resonates with a customer far more than a small discount on the entire purchase. There is also a good chance that in future they will spend more money on flowers to offset the difference, meaning that your revenue stays the same.
If you go this route you need to reinforce it on every receipt/invoice - you need to show a delivery/service share line item, with a value of zero, so that the customer is reminded you are taking special care of them. FloristWare includes a special feature just for this – you can flag specific customers as being exempt from delivery and/or service charges. Their receipts and invoices will still include the charge as a line item, with a value of zero, and a comment saying something like “Standard delivery fee of $14.99 waived”.
Another good idea is a free gift. During slow periods, or when special prices are available on flowers, the shops will send a free arrangement thanking them for their business. Typically they will send something a little different than what the customer usually orders, maybe with some interesting and less common flowers and/or a different design style, in the hopes of expanding what the customer likes.
But the best idea seems to be to go to them. You explain that, as one of your very best clients, you’d like to give them a free in-home consultation – that you would like to come and see their home, their colors, their sense of style…. all so that you can serve them better in the future. You want to take pictures of each of the entertaining rooms so that when they say they need a Thanksgiving centerpiece you know exactly what color and style of furniture they have in their dining room. How much space there is between the table and the light fixture overhead… and if there are maybe some other surfaces in the room that would look good with flowers too.
There are multiple benefits:
- you have powerfully demonstrated just how much you value them as a client – you have offered to come to their home and give them your time and expertise just so you can serve them better in the future.
- you are going to serve them better because you know more about what will work in their house and with their tastes.
- they are going to be happier with each and everything you send them because they are now more involved and invested in the process. Everyone feels better wearing a custom made suit that involved multiple fittings and this is much the same.
- you have also secured their loyalty. In addition to having done them the gift of the free (and very exclusive) in-home consultation you are now the florist that knows what they like. The shop down the street can’t serve them like you can.
It is a powerful technique that seems to be working very well for the shops we’ve been talking to. Hopefully it will work for you too.