Customer loyalty: 3 ways to win if you’re a retailer

Customers are closer than you think

These findings from research of the ways we go about our lives have confirmed people are nowhere near as random as previously thought. In point of fact, after tracking more than 100,000 mobile phone users over a period of six months, the clear conclusion from this research if you’re a brand is that people mostly visit a limited number of locations time and time again. Customer loyalty pays. Literally.

What’s interesting to note, given that we live in this much heralded era of mobility, is that most people also move around over very small distances – five to ten kilometres. No surprise then that this infographic by FlowingData shows a pizza-chain within a 10-mile radius across the United States.

Some people, of course, range much further, but even then, they stick to remarkably similar patterns, once again tending to return to the same places over and over again. So customer loyalty is also limited. For the most part, it operates within finite parameters.

But a recent study of grocery buying habits also reveals something stranger, and contradictory. Even though we generally return to the same places and those places are usually close by, we will travel much further than seems reasonable if the incentive to do so is great enough. For example, while we may like our fast food close, people in cities will travel miles to shop for food from their favourite outlet, even if they have a supermarket or corner store nearby. Watch the videos and see for yourself. Customer loyalty defies logic.

If you’re a business that depends on physical traffic, here are three take-outs around customer loyalty that I think are worth noting.

Firstly, we are indeed creatures of habit. If people’s behaviours are characterised by repetition, then it makes sense to look for ways to become part of their regular rituals. Find ways to incorporate what you do into their day.

Secondly, many retailers in particular, have an appeal strategy based around destination of chance rather than destination of choice. This research would suggest that customer loyalty and the repeat business it brings is even more important than many believe. In the case of some food anyway, it is possible to defy geography through the sheer attractiveness of your offer. Time to step up the reasons to get people back. A surprising amount of your take probably comes from people who keep coming back.

Thirdly, focus on narrowcasting. Think about what you could do to increase your “share of day” amongst the people you value most and who will value you most, rather than everyone.

We may live in a world of seemingly endless choices, but these studies show that consumers find and stay with choices and brands they know and feel comfortable with. For many people, that’s a surprisingly short list. What are you doing to win and hold local customer loyalty?

Acknowledgements
Photo of “On the go phone” taken by Craig Cloutier, sourced from Flickr

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