The Gilman Company Blog

Grocery Store Membership Cards

Dear Chain Grocery Store CMOs,

Yes, membership cards seemed like a good idea at the time. But let's face it. There is no value in grocery store membership card programs for customers and your not realizing the type of value that seemed to exist from a conceptual perspective. Here are a few reasons why you should drop your membership card program first and take credit as the industry leader who did so:

1. Obviously, all of the retail chain grocery store competitors in your category have the same program.

2. A lot of the data you collect is bogus.

3. The rewards you offer aren't compelling and unique enough to retain a customer that you wouldn't retain without a card program.

4. Now you have a duty to inform people when they may have purchased bad food. "Dear Valued Customer, we sold you some bad food."

5. Your card program is a hassle for potential new customers.

6. You give so-called preferred treatment to some customers and the others are chopped liver.

7. Wal-Mart has been expanding grocery sales since "Go" and they don't have a card. Although customers will still come in for your extensive mustard selection...unless it's cheaper at a card-less discount grocer.

8. You can reduce your marketing budget by eliminating membership cards and have something new to talk about or pass the savings along to customers.

9. Unless you're a discount chain, the real value in your local stores is location, personal service and selection, not membership. Spend more money marketing that stuff.

10. Relating to the people who come into your stores as "customers" is more important to them than relating to them as "members."

Get a Gilman consultation.

You are Not Your Customer

If you want to enhance the experience that your customers have when they do business with you, remember that "you" are not "they". What may appear to be the best solution to you may not be the best solution for your customer.

For example, if you like pastels and your in the business of selling sporting goods, the packaging for your boxing gloves product probably shouldn't be designed based on a pastel color scheme. You should be looking for a bold and strong color scheme.

If you like to get creative but your customers are very no nonsense, you should market to and communicate with them with that in mind.

Bonus tip: know your customers.

Get a Gilman consultation.

Customer Experience: The New Battleground

Interested in a new way to measure your success with consumers in a market? Several directly competing firms have begun to bash it out on "customer experience". No, it's not about product satisfaction, it's not about environmental friendliness and it's not about trust or economic viability. It's strictly about customer experience, not to be confused with customer service.

How do you measure customer experience? Think interactions in terms of usefulness, ease of use, pleasantness and general customer satisfaction with interactions.

Here, a recent fray and a worthy match up between Dell and Apple where Apple takes the day.

But, what does beating out or losing to your competitors on customer experience mean? That depends.

Get a Gilman consultation.

Existing Customers vs. New Customers: Marketing and Sales(Part II)

If your only marketing goal is to source new customers or members, you’re losing out on sustainable growth. That means you’re not optimizing the lifetime value of each customer. Unless you’re running a lonely gas station in the middle of nowhere that caters to the occasional passer by, existing customers should be a priority.

Because the attention span of consumers can be short and because consumers love trends, marketing efforts to retain existing customers or members should focus on the reason why your existing customer became a customer in the first place: “value.” If you keep a close eye on your competitors, this marketing focus might need to change to “added value.”

Also, it’s almost always less expensive to keep an existing customer than it is to track down a new one. This is precisely why the sophisticated players in this game are often willing to pass a part of that savings on to existing customers in the form of loyalty based incentives.

Get a Gilman consultation.

Top Ecommerce Retailer Searches

According to an Internet Retailer article, the top 20 ecommerce retailers in the month of February were as follows:

1. eBay
2. Walmart
3. Amazon
4. Target
5. Best Buy
6. Netflix
7. Home Depot
8. Circuit City
9. Sears
10. Costco
11. Walgreens
12. Macys
13. Bed Bath and Beyond
14. JCPenny
15. Kmart
16. Staples
17. Office Depot
18. Kohls
19. Barnes & Noble
20. iTune

Is it great to be as high up on this as possible? Absolutely! Is it everything? Probably not. However, much to learn about consumer habits online if you watch this list fluctuate month to month as it certainly does.

Get a Gilman consultation.

Existing Customers vs. New Customers: Marketing and Sales (Part I)

One of the greatest marketing flaws I see on a regular basis occurs when a company focused marketing (dollars) on either existing customers or new customers, but not both. First, existing customers.

Focusing all of your marketing or sales efforts on existing customers is a great way to create a downward spiral in sales and growth. One of the reasons why a marketer’s job is never over in a relatively free market is because customers always move on at some point. On one end, a customer tries your product and doesn’t like it. That customer is lost. On the other end, they try your product, love it, buy it over and over again for several years and then they…well…die. Either way, if you only market to your existing customers, you will eventually fail.

Ignoring your existing customers, on the other hand is much like chasing your tail. Maybe “reinventing the wheel” is a better platitude. Either way, your existing customers should be coveted and marketing efforts that are uniquely designed to keep them coming back should be planned and implemented.

Get a Gilman consultation.

Give Your Impulse Buyers a Chance

Some of your customer prospects won’t need much convincing. Give these buyers the chance to close a deal immediately.

When working on a deal, the challenge here is recognizing which buyers need to marinate longer than others, because a precocious nudge toward closing a deal too soon, could come off negatively. One key is sensitive listening and, perhaps, asking the right questions. A seasoned negotiator may or may not express her excitement about what you’re selling and leverage her lack of excitement when the first round of numbers drop. On the other hand, some no-nonsense negotiators recognize a great deal and want to move forward.

When making offers to consumers, create two tracks. One track up front for impulse buyers to make a purchase and another aligned track for those who want more details.

Get a Gilman consultation.

Lifetime Value: A Definition

The lifetime value of a customer or member is the value that the customer or member will bring to your company throughout his or her life.

I love doughnuts! Say you’re operating a doughnut shop and Gertrude is a customer. Gertrude comes in one day and buys one doughnut for one buck (your doughnuts are that good). The value of that transaction to your shop can be characterized as one dollar. However, let’s say Gertrude comes in on average twice a week for the next five years, buys an average of one doughnut each visit and those are the only times that she will ever, in her life, buy doughnuts from you. That means the lifetime value of Gertrude as a customer of your doughnut shop can be thought of as (Warning: math coming up!) $520.00 (52 weeks X $1 X 5 years). Yes, you’ll have to make adjustments for price changes and other variables.

If you can track customer buying habits, you’re golden and with some basic sales tracking tools in place you can estimate the lifetime value of your customers.

The question them becomes, how can you increase the lifetime value of your customers?

Get a Gilman consultation.

Ritz-Carlton Fishes For New Customers: Capitalzing on Romance

How's this for an incentive to look at Ritz-Carlton Hotels for your wedding: a free wedding and a free three-night stay in the Caribbean and Mexico? All you have to do is book at least 25 rooms, something that a good amount of couples will do either way for a destination wedding. Why not get a free wedding and room while your at it?

This is a great example of connecting a product or service to an industry that has the same values and recognizes the same ideas. Here, it's romance, so why not expand the enterprise by focusing on the wedding industry, which is perfectly aligned and an idea like "Free" when it comes to weddings is especially compelling.

What ideas do your products and services embrace and what can you do to align with potential customers who embrace the same ideas? Next, how can you incentivize them to act.

Get a Gilman consultation.

Value Entertainment and the Video Game Industry

Entertainment is a recession oasis. No matter how bad things might get, entertainment will happen and consumers will pay for it. That doesn't mean that consumers aren't looking for a good value for their entertainment spending.

One of the strongest retail entertainment segments is video game sales. According to the Wall Street Journal, Gamestop has done surprisingly well, even in light of the recession. Why? Video games are a cheap form of at-home entertainment. But why Gamestop and not other video game retailers like Wal-Mart and Gamestop? Because Gamestop is focused, caters to gamers and has the ultimate cheap skate weapon: they buy and sell used games.

Get a Gilman consultation.