Carlson Relationship Builder Study Reveals How to Get it Right in Retail

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Carlson Relationship Builder Study Reveals How to Get it Right in Retail

MINNEAPOLIS -- Customers have relationships with retailers, and the range of the strength of those relationships is broad, according to findings revealed in the most recent chapter of Carlson Marketing Worldwide's ongoing research series.

Nearly 1,200 consumers took part in the comprehensive survey conducted by Carlson Marketing and its Peppers & Rogers Group strategic consulting subsidiary.

Barnes & Noble, Hallmark, Bath & Body Works, Best Buy, Old Navy, and Target ranked among the retailers with the highest levels of relationship strength. However, in all cases, there remains substantial room for improvement, according to the study, which found that the strength of the relationship between a retailer and each of its individual customers is not uniformly equal. There is an opportunity to "raise the bar" on an overall basis, and individually based on the variances in relationship strength among customers within retailers.

"Thriving and not just surviving in the retail marketplace requires more than just executing the basics," said Luc Bondar, Carlson Marketing's v.p./loyalty marketing. "It requires building strong relationships that in turn enhance customer recommendations, retention, and shopping." Bondar noted that while some retailers are already doing this better than their peers, "there's ample room for improvement across the board. The use of loyalty programs, improvement of communications, customization, relevancy, and frequency are all one-to-one approaches highlighted in the study as mechanisms to 'get it right' and deliver results."

Bondar's top 10 things to remember in retail:

-- Loyalty programs drive incremental purchases.One-third (33 percent) of customers agree that direct participation in a loyalty program has resulted in the purchase of additional products from a retailer that otherwise would not have occurred.

-- Satisfaction is not sufficient. A large segment of customers (41 percent) are at least as satisfied with other retailers as with their primary retailer.

-- Here today, gone tomorrow. A majority of customers (51 percent) state that there are many other good retailers, any one of which could serve as an alternative to their primary retailer.

-- Walk a mile in their shoes. Customers agree that "being easy to do business with" (89 percent) and having "good customer service" (90 percent) are important attributes in preferring one retailer over another.

-- Aim for alignment.When the interests of the customers and the retailer are perceived as resulting in a mutually rewarding experience, the alignment enhances the likelihood that customers will recommend the store or company to friends and family, remain a customer, and shop more at the retailer (68, 39 and 43 percent respectively, for those with high vs. low levels of alignment).

-- Brand is big. Almost two-thirds (64 percent) of customers agree that familiarity with a brand name plays a role in the choice of a retailer. The effect is even larger for those with a high vs. low level of relationship strength.

-- Customers are human, too. Among the top three most important considerations when interacting with customer service are staff courtesy (59 percent), apologizing when something goes wrong (32 percent), and being empathetic (28 percent).

-- Morality matters. Customers agree that the reputation (70 percent) and the moral values (50 percent) of the retailer are important when choosing where to spend their cash.

-- Web sites work well. Almost two-thirds of customers (65 percent) use a retailer's Web site for activities such as searching for merchandise, learning more about the store, and reading about news or offers. The percentage varies considerably by the type of retailer (department store, 71 percent; grocery stores, 44 percent).

-- Don't botch the basics. Customers overwhelmingly agree that having the best price (93 percent) and having a good selection/availability of merchandise (93 percent) play a role in determining where shopping occurs.