February 23, 2015

Attracting the Loyal Customer

There is an old saying that “competition is good for business.” There is some truth in that it keeps businesses on their toes and it is certainly good for shoppers who benefit with better prices and service. But several retailers I spoke to of late, namely the new age of proprietors of the independent kosher supermarkets, strongly disagree arguing that recruiting and keeping loyal customers was the key to success for them. They even suggested that it was the very essence of their business plan. To the extent that shoppers used them as a “one-stop destination” for everything kosher” they could most likely meet the high fixed costs of running a kosher specialty supermarket with its myriad of kosher options and even turn a profit. But if their stores are used more for the occasional specialty items and shoppers do not use them for “one-stop” shopping, the chances for long-term survival might not be as bright.

To be sure, attracting and keeping loyal customers is not new to business. The whole idea of affinity programs, frequent fliers or buyers, and special discount incentives are specifically designed to encourage customers to be loyal. Loyalty programs work but as I found out in my discussions with some of the retailers are not used enough to keep buyers in the store. In today’s technologically advanced era, there are many more options than ever. For example, effective use of social media can generate a following. Communications tools like e-mails can be used effectively to blast out specials to the frequent customers. Attracting and keeping loyal customers is no longer a luxury; it is a necessity for the long-terms survival of the growing number of the kosher independent stores as it probably is for almost every type of retailer.