My Wizard of Ads (WOA) Partners and I have a presentation that shows with amazing clarity the profitability of “relational” customers versus “transactional” shoppers. Most retailers believe that traffic is the magic. “Get me enough people and I’ll be fine,” they tell their ad reps.
So then, are SALE events simply traffic-builders? I don’t think so, but I’d sure welcome your opinion as well.
You see, it starts with a focus on profits, not customers. Shareholders scream to the board and CEO that profits shall be forthcoming. The CEO starts screaming down the chain because his bonus is dependent upon the actions of everyone else. The VPs and directors of the different marketing channels scream at the buyers. The buyers scream on down the line until it reaches the sales staff on the retail floor and the operators on the phone banks. Suddenly, there’s no one left to scream at…except the customer. Call in the ad agency…better yet, let’s go direct to the media. “We need screaming SALE ADS! Let’s create some traffic!”
Ah, now we’re talking! TRAFFIC. Lots of folks start coming in because you’ve just told them how willing you are to stab your best customers in the back to cover the greed of those screaming lunatics in the glass towers.
The buyers bought too much because of the screaming. The sales staff didn’t sell enough because all the best showroom space was taken up by the discounted stuff. The loyal relational customer comes in and finds that the merchandise she paid top dollar for last month is now 65% off. She’s fuming. Next time, she’ll wait for the sale.
If the motivation of the company is greed, the result will be persistent sales events.
If a genuine interest in helping the customer is the motivation of the company, there will be no giant sales events (with the possible exception of an annual inventory reduction event to actually get rid of the honest mistakes of the buyers).
The focus will be on enriching the customer experience in all marketing channels and through every contact with the company. Profits will surely follow in the trail of happy customers.
What do you think?