Treat your customers well and they will come back; treat them like they are really special and they will not only come back more often but also spend more money. Sounds really simple when you say it but much harder to effect when it means making sure that your customer experience is consistent across all your touch-points.
Zappos the online shoe retailer (now owned by Amazon) has embraced and cultivated this customer-centric culture as an organizational philosophy. They ensure that they live up to this expectation of customer happiness in every aspect of their business; even down to making sure they hire people with a certain disposition and a passion for service. Tony Hsieh, CEO, once said “We want people who are passionate about what Zappos is about–service. I don’t care if they’re passionate about shoes.”
Here is an example (and great story) from Zappos.com. A customer checked into a hotel in Las Vegas and forgot to pack her shoes that she bought on Zappos for the trip. She called to order another pair and have them shipped to her overnight. Unfortunately, they were out of stock – most companies would have very politely said they would inform her the moment the shoe became available – Zappos did not. Instead they had an employee go out and find the shoe at a local mall and then delivered it to her hotel; all free of charge!
This is an example of above-and-beyond but the benefits of such GREAT customer service can be huge to a company’s bottom-line. Let’s look at the economics of this act by Zappos. It probably cost them a couple of hundred dollars for the shoes and cab fare. But the value of this seemingly extraordinary act for the customer will no doubt be priceless. I would wager it made her a loyal customer for life, and will probably end up increasing the amount of money she spends at Zappos because she will come back to shop there more often than she would have otherwise. Additionally, how many people do you think she told about her amazing experience; probably everyone she knows – driving countless new customers to Zappos.com – now the couple of hundred dollars suddenly don’t seem so much. Delighted customers are always the most powerful sales tool for a company.
The numbers support this customer-focused strategy. On any given day, 75% of purchases, on Zappos.com, are from returning customers. Repeat customers order more than 2.5 times per year and have a higher average order size vs. first-time customers (source: Luxury Daily, July 2011).
One last statistic I want to leave you with: on average, it costs 10x more to acquire a new customer than to keep an existing one.