By Nick Godfrey, Partner, Customer Portfolios
It looks like the Thanksgiving weekend passed rather successfully and uneventfully as Black Friday took in slightly more shoppers without incident and Cyber Monday continues to grow. Before the holiday came upon us though, I noticed with interest that the National Retail Federation (NRF) has advised its members to prepare for “crowd management” this holiday season. Issues such as loss prevention, in-store security and customer safety are the hot buttons there and it is certainly an important issue. After all, it’s the customer experience that’s important at retail, whether it’s a Black Friday midnight sale or a high-end boutique showing. It makes sense to consider that while you have all those people in your store, why not get them for the long-term relationship vs. the fleeting thrill of Black Friday bargains? This also got me thinking though that crowd management is just as important for multichannel retailers. The issues are different but the outcomes — stronger customer relationships — are the same.
A crowd is made up of surge of customers. Brick and mortar retailers try to manage when that surge will arrive, and what offers entice them to leave with the maximum amount of purchases. This can be done online as well, and in fact was tried by several retailers that extend Black Friday into Cyber Monday. I’m all for that. But I think multichannel retailers could do much better for themselves and their customers by following these three “crowd management” tactics for multichannel holiday customers.
- Play to your best customers. Retailers should know who their top tier of customers are either through purchase data, engagement metrics or hopefully a combination of both. If a fashion retailer knows that its highest valued customers in terms of overall purchase are responsive to e-commerce offers during the holiday, serve them something exclusive. Let them know that either a discount or new styles will be available to them for a limited period of time. Provide this to them at a special time, perhaps before all other customers. Another key is to identify the customer segments that a brand wants to attract for a “surge.” Maybe a cosmetics brand sees an opportunity to reach professional women for a special in-store event. An effective coordinated combination of local advertising, direct mail, email and loyalty program communication could accomplish that attraction. Again, multichannel customers can be attracted and managed.
- Generate excitement vs. entitlement.The American consumer expects every discount and loyalty perk imaginable, when they rarely have to exhibit loyal behavior. Change that and you can change customer relationships for the better. If a customer is part of a loyalty program, (an active part of a loyalty program?), come up with something worthwhile and exciting for them to do business with you during the holiday season. Get beyond the 10% off coupon that every customer gets. In my experience, crafting an offer that they earn that can be delivered after the holiday season can increase customer engagement.
- Manage to long-term engagement.A surge of customers will lead to temporary engagement. Anybody that waits outside a Wal-Mart for the chance to rampage through at midnight is certainly engaged for those moments. But you want the most valuable customers to engage after the surge; you will want to invite them back. How many customers that survive Wal-Mart on Black Friday are going to want to repeat that experience? There’s the rub. Capitalize on the surge! Retailers need to use data collection methods to be able to track and measure customer behavior so they can understand how to re-engage them during the holiday season and then after the holiday season. Retailers can’t get caught wasting money on a customer segment that only wanted their yearly holiday purchase and they can’t afford to ignore the customers that are engaged and will want more offers and will buy more.
So by all means, practice sound crowd management. But do think beyond just the midnight madness!
Nick Godfrey is a partner at Boston-based Customer Portfolios, a marketing services agency that specializes in retail data and communication programs.