Is the Customer still "always right"? (part 2)
Please see part one of this blog for reference.
In the late 20th century retailers have found a (relatively) new way to entice Customers to remain a loyal shopper to their establishments. Loyalty programs such as Air Miles, Petro Points, HBC rewards (the list is endless) have emerged in the past 20 years to create rewards for loyalty. Even the local coffee shop may give you a free coffee on your 10th visit. Canadian Tire is considered a pioneer in loyalty rewards in Canada by offering cash back in the name of Canadian Tire Money starting way back in 1958.
Loyalty cards are valuable to many consumers and may influence where they purchase their items. Loyalty programs are valuable to retailers because of the same reason. There is another tangible value to retailers that emerged perhaps as a secondary benefit. Retailers could now monitor the purchase habits of Customers. Air Miles provides aggregate information on consumer spending to their sponsors as part of their business offering. Retailers now have valuable information on what Consumers are likely to buy, and their actual buying behaviour.
Retailers are now using this massive database to decide who their profitable Customers are, and who are the "less than desirables". Liz Pulliam Weston has a great article that expands on this topic. Complaining too much or being over-abusive? Returning too much? You may find that your Customer file is being updated with all of this information. Most of us know that there is a growing database of our consumer spending habits, but we haven't reached the point where it's affecting us, right? Well you may be surprised how much we're affected by it. For example, when you call your bank and enter your bank card number, their call switch software may decide your wait time based on your profitability. If you're answered quickly, you are a great Customer. If you are waiting for a long while, you may not be the Customer they want to please. When you travel, you'll notice the people who are high spending, highly profitable Customers. They are the ones that can line up at the business class and platinum rewards line. The line usually has 1 or 2 people in it, and is staffed by the very best representative of the airline. Blackberry Customers (highly profitable) may get faster service when calling than the pay as you talk Customer. If you are a desirable rewards Customer at a hotel, you'll likely get upgraded without asking. It's everywhere, and retailers are getting smarter and smarter at catering to their best.
The next step in this database driven retail world is how to lose your losers. Companies are using this valuable information not only to reward their best Customers, but to fire their worst. Those Customers that are no longer desirable to deal with (whether it be for abuse of policy or staff) are being asked to leave, and to take their business elsewhere. The tide is changing on these Customers that feel entitled to make unreasonable demands on retailers. These undesirable Customers are no longer able to use the threat of taking their business elsewhere. The retailers are making the decision for them.
A relatively small group of Customers causing a relatively large problem for retailers. Retailers now have an answer.
Most of us are not on this list. Those of us that treat retailers with respect will enjoy the rewards that retailers offer us for being loyal.
The common retail phrase in the 20th century was "The Customer is always right". In the 21st century "The profitable Customer is always right"
