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Wednesday, August 23, 2006

A Good Hug Is Worth....

"Big hug" originally uploaded by Wam Mosely.
What would you say to a business strategy based on hugs? This is the approach that Jack Mitchell, author of Hug Your Customers and CEO of Mitchells of Westport, Richards of Greenwich and recently Marshs of Long Island [high end clothing retailers], described in a CCA Global Summit presentation in Denver last week.

Hugging is a metaphor for what Mitchell and his folks do day in and day out to express to customers "I care about you!". These hugs essentially encompass all of the daily activities that touch people in a personal way, from a smile, to using a person's nickname, to walking a customer to the right section of the store, to remembering that they prefer coke over pepsi. These are simple caring gestures executed consistently and with PASSION!

The Hug strategy creates a unique selling culture where every person in the company -from IT to the mailroom to the salesfloor- treats customers similarly. It inspires a passionate focus on customers! Everyone must spend time on the selling floor to understand firsthand the power of hugs and how hugs create friends who develop loyalty for life! How can hugs do this? Because everyone loves a hug; it's a natural, requiring little training; it's easy, it's contagious and it's fun.

Mitchell challenged the audience to do two things:
  • Commit to focusing on each's top 100 to 150 customers.
  • Commit to focusing on each's employees.

Focusing on one's top customers means tracking and accessing many details about them to be able to hug them effectively. Technology can help by generating reminders around simple caring gestures and recording information about purchases, personal preferences, special dates and other details. These amount to investments in one's customers! Mitchell's organization even sifts through data on an SKU by customer basis rather than the traditional product basis.

Some examples: customers receive a personalized letter when they first visit the stores. Any customer purchasing $2000 receives a personalized letter from CEO. Associates call their best customers regularly.....

As it relates to one's employees, this means celebrating their successes, remembering their important dates and sending cards on birthdays or anniversaries. They are as critical to success as customers are and need to be treated as such. Focus on them and they will focus on the customer. It all starts at the top.

Note: Do check out this post titled Reichheld on Employee Loyalty from a fascinating blog called Brand Autopsy. I mention Reichheld in an earlier post "Good Tea. Nice House." from the perspective of customer loyalty. Here, John Moore from Brand Autopsy emphasizes the importance of employee loyalty to develop customer loyalty via a quote from his book "Tribal Knowledge" re: his days at Starbucks.

It is vital to hire the right associates who are passionate about customers first, then about product. In short, Mitchell's organization hires for culture. The rest can be learned. He listed five criteria for hiring great people:

  • honest [do they have the right open work ethic]
  • positive attitude
  • competent [i.e., self confident]
  • passion to listen, learn and grow to be the best that they can be
  • be nice

From a marketing or advertising perspective, Mitchell spends not a dime unless it touches the customer. He focuses on repeat customers because they affect referrals, then on new customers [e.g., send a box of hangers with a brochure to certain new home buyers]. Furthermore, no mark downs! Product that is out-of-fashion or obsolete is simply shipped to Filene's basement. Mark downs go against business strategy; they don't match customer expectations. Wow!

The hugging strategy is NOT about transactions. Rather, it's about developing a longterm relationship with a customer. At the heart of any transaction are personal details. Know those to create a relationship! Create a WOW transaction so customers become extremely satisfied.

It's about positive personalization with passion; simple and powerful. It means that local retailers can indeed be dominant through hugging, by being personal with customers and associates.

As it relates to marketing to women, hugging is right on target! Women pay attention to details. Women have higher expectations than men do for the retail experience. So, if hugging is effective with men [an important customer segment for Mitchells, Richards and Marshs], imagine how powerful it can be in a flooring environment where the core customer group is women!

Not only does hugging create loyal customers, but it also develops tremendous employee loyalty. A good hug is really worth it! So, what are you waiting for? Go hug your customers AND your employees!

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