June 26, 2019

Can I Can Cause A Customer To Become Loyal?

Maybe.

If you are Starbucks, sure, your darn addictive product is more than enough to foster loyalty. In fact, when your customer purchases six or more times a year it isn't difficult to improve customer loyalty.

Annual purchase frequency is a function of at least four things.
  • Whether your product is addictive (Starbucks).
  • The breadth of your assortment (Amazon).
  • Whether your product is needed (i.e. food).
  • The seasonality of the products you sell.
Most of my readers aren't Starbucks, aren't Amazon, and aren't McDonald's.

Our products aren't addictive.

Our products aren't terribly broad - we aren't Walmart or Nordstrom or Target or Best Buy. We serve a niche.

Our products aren't needed. We need weekly grocery trips to Safeway. We don't need an O&H Kringle on a weekly basis.

For some of us, our products are gift related, limiting their sales to November/December. It's hard to foster loyalty when the customer has minimal reason to buy in ten of twelve months.

The result is this ... our product assortment dictates customer loyalty ... not the other way around. If you sell something that a customer only "wants" 1.5 times per year, you can flail away all you like with loyalty efforts and you'll be successful and the customer will buy 1.63 times per year. Nothing changed. You actually did a great job, and nothing changed.

You're better off spending the money finding a new customer.

Your business model, the products you sell, that determines if customers are loyal. Offering triple points on items that customers don't need frequently is an altogether different proposition.




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