| There are three kinds of customers in a retail business environment: first time customers, referral customers and repeat customers. Each must be courted and serviced in slightly different ways in order to keep them coming and returning to your store. Understanding the different types and having a well thought out plan for each is an important key to success in retailing. The computer based point-of-sale system is an excellent tool to organize your sales and marketing efforts, as well as, provide flexibility for new ideas and strategies which can be developed over time. Let's look at the customers individually.
The first kind, the first time customer knows only about the store from the image you have made by print, radio or television ads and the store's exterior, windows displays and location. This customer really starts out as a shopper, a browser looking into your store to satisfy a curiosity or perhaps in search of something in particular.
The second type of customer, the referral customer is, referred in some sense by another customer of the store. Depending on the store format this may be a simple response to a question about where they purchased a particular item or they actually gave a recommendation to another person, “you really should go to the _______ store, they have the best ______ and the best _______ and the best service.”
The final type of customer is the repeat customer. They initially came to your store either as a first time or referral customer, they liked what they saw and they came back, in fact they keep coming back.
All of the aforementioned customers are important and each must be cultivated. A store will not survive if it can only get first time customers. Such customers take the most time to acquire and are the most difficult to get. Any customer who comes into the store should be turned into a repeat customer and even better turn them into a salesperson for the store so that the store's customer base can grow exponentially. Even if a store has plenty of repeating customers, new ones are always needed as customers move out of your area and new people move in.
In order to become a first time customer, a person needs to know the store exists. How to get the word out is a subject in itself, but commonly, print ads in local newspapers, and direct mail pieces to local residences, as well as, the creation of an inviting store gets people in your door. The point-of-sale system helps to make that first transaction quick and convenient and importantly acquires customer information so that the customer is more likely to return to the store than otherwise would be the case. How this happens is the first two fundamentals of the point of the point-of-sale concept.
Fundamentals of Point-of-Sale (Benefits)
1) Increases Sales Transaction Efficiency
2) Creates Customer Marketing Program
3) Simplifies Inventory Purchasing & Management
4) Reduces Inventory Shrinkage and Loss
It is important to have a fast and efficient sales process so that a sales person's focus can be on customer service, helping a shopper to make the decision to purchase. Then, once a purchase decision is made, the sale is made complete before any alternative decision by the purchaser can be made.
The Sales Transaction Process:
1) Customer is Identified
2) Items to be Purchased are Identified
3) Special Discounts or Charges Added
4) Tender Type and Amount is Identified
5) Tender Change Calculated and Receipt Printed
The information on a customer that is needed for later marketing is: name, address, phone number, and email. This is the information that allows contacting the customer to invite them back to the store. It is the same information that is exchanged by friends; it allows a relationship to develop by allowing mutual contacting to occur.
Let's look at some methods of identifying customers and getting the customer information in the first place.
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 Many retail operations have found it easy to identify customers by their phone numbers. The phone number is a number that every individual knows; it is not as potentially invasive as a social security or driver's license number. More and more people in addition to a phone in their homes have a personal cellular phone. Thus even if two people have the same address (and home phone) they can give an individual phone number as an identifier. The phone number is therefore an efficient customer number, an identifier to help us organize and sort our customer database. Other ways to organize a customer database is by last name/first name, by address, last four digits of a social security number, or by a sequentially assigned number (this is usually done by “Club Card” programs).
Because the small retail store success is so often based on the personal relationship of the store, sales person, and the customer, a nature progression tends to develop to obtain the customer's information.
When the sales person is behind the point-of-sale counter they can formally introduce themselves, telling the new customer their full name and perhaps giving them a business card. It is now natural for the customer to introduce themselves. Now naturally it flows that the sales person can say something like, “Mary, it is nice to meet you can I get your phone number (or whatever identifier is used) for our records? The response is positive 99 times out of 100 and that is all that is usually needed to begin a customer record on a point-of-sale system.
Getting the additional information can be done one of two ways. If there are no other customers waiting and the current customer is in no apparent hurry, the complete customer record can be typed into the point of sale system and a complete customer record created “on-the-fly,” that is after beginning a sales transaction. If there is not the time to create a full record, just a phone number identifier is sufficient in most all point of sale systems to create a customer record that info can later be added.
When time is of the essence, a form can be made available to the customer who can complete it while the sales person is completing the transaction or can take it with him/her and return it later.
Experience has shown that if a customer information form is provided in an attractive display on the sales counter, many customers will fill it out without even being asked.
Some other incentives can be offered as an added inducement for the customer to part with their information. Most common is an offer of a promotional item (ball point pen, key chain, kitchen magnet etc. printed with the store's logo address and phone) if the customer fills out a customer form.
The form can also be devised as a survey or questionnaire asking how the customer found out about the store, how was the service, what items they would like to buy that are not currently stocked, etc. This kind of information about a store's customers can be vital for the store's success.
Discount on the current purchase can also be offered as can a future discount after a certain amount of visits or purchases; the point of sale system can make all the calculations necessary for any kind of incentive program that can be thought up.
____________________________ By Jonathan Schillinger, C.A. , Esq.
The author is the managing partner of Point-of-Sale Systems, a division of Charles Carroll Associates, ltd. a professional services firm.
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At Left is an Example of customer sign up form |
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