This is my final installment for the series, “Inside the Mind of the Loyal Retail Pool Consumer.” I hope you enjoyed it. You can access all 18 posts here. Since many of you are getting ready for the current pool season, here are a few of the key points as reminders.
The Specialty Pool Store Customer Mix
All specialty pool stores have a mix of customers that can be segmented along the lines of this chart. The motivations associated with each group as well as their distinguishing characteristics are quite different. Keep in mind that they should not be treated equally.
Above all else, retailers must protect and grow Loyalists if they are to continue to be successful long term.
In 2012, 55 percent of all in-ground pool product shoppers were Loyalists. They purchased most of their products at only one specialty retail store, accounting for 70 to 80 percent of specialty retail purchases each year. But Loyalists have a missing link in their satisfaction with the overall value received from their specialty retailer.
Retailers have significant gaps in understanding Loyalists
While many are savvy in understanding their customer base, we respectfully believe most swimming pool retailers do not fully appreciate the differences between their loyal customers and the ones that are not loyal. This is a new way of looking at their business, and retailers have not been educated to segment their customers and marketing efforts along these lines. In most cases, there remains substantial room for progress that can lead to improved business profit and sustainability. One reader made a poignant reflection: “Even when you believe you are doing a great job as a specialty retailer, you can´t let up. Rust never sleeps; why should the owners of pool retail stores?”
The Secret Sauce
Most pool products have a degree of complexity that requires product knowledge and superior service to create advantage. We call this applied knowledge. Maximizing product value relies heavily on interactive exchange with consumers to bring advantages to life. This research specifically points to applied knowledge as vitally linked to creating advantage through products. For those Loyalists that see both applied knowledge and product line as an advantage, satisfaction with overall value jumps to 85 percent. This is the “secret sauce.” Only 1.5 percent of Loyalists who don’t see this combination of advantages are sufficiently satisfied. The key to creating and keeping Loyalists is contained in this “secret sauce.”
Getting started
With so much at stake, measurement of customer loyalty and retention is essential. Yet our experience is that very few swimming pool retailers have a defined process for measuring and tracking customer loyalty, let alone understanding what creates it and how to improve it. How can someone have all the answers before they ask the questions? Relying on intuition for something this important makes very little sense.
Consider this. Your customer base is a business asset. Your employees maintain this asset. There are tools you can use to measure this and understand where to take action. Here is a starting point:
1. Identify your loyal customers.
Analyze your customer base to identify loyal customers. Develop a list of customers who have purchased from you each of the last four years. What percent are they of both your active customers and total revenues? Survey them to see how satisfied they are with your overall value. Ask for gaps and how you can improve. Reward them for spending time and money with you.
2. Look for signs of defection.
Identify those customers whose sales have declined over the last year. Do you know why? Which ones are Loyalists? Which ones could become Loyalists? Look for potential defectors by following up directly with each customer. Those that are true defectors will stand out from other cases. Give them a reason to stay with you before they fully defect.
3. Objectively evaluate how you are doing in the area of applied knowledge.
We precisely identified the importance of applied knowledge as part of the “secret sauce.” Can retailers say with confidence that their teams are among the best at delivering applied knowledge? It would be extremely biased to say this without putting their business to the test. Get started by making certain all employees have a solid knowledge foundation to help customers understand their pools and solve problems. Then look for people to shop your store and report back.
The choice for retailers
The insights in this research point to an important consideration for retailers. Will they accept this evidence with an open mind and look to improve their business? Or will they believe they are the exception and avoid trying the very things that can help? Based on our findings, that decision may be the determining factor between success and failure. We believe those who take these research results seriously will have greater likelihood of positive actions along with prosperity in the future. Best wishes for success!
Your turn:
What did you think about this research and the blog series? What was insightful for you?
What experiences can you share?
What will you plan to work on within your business?
Need to train your employees? Try Larry's online training course:
As Larry's study found, your business's success relies on having a knowledgable staff to meet (and surpass) your customer's needs. However, every retailer knows how hard it can be to quickly train employees in how a pool actually works. With that in mind, Larry Bloom and the Xmente team created How Pools Operate, an online course designed to help every employee reach a basic pool knowledge threshold quickly, giving them the confidence to attract and maintain customers as a trusted, credible source of information. Six online interactive lessons cover basic information on pool operations including types of pools, circulation, filtration, cleaning, testing and basic chemistry. The lessons also contain self-guided activity worksheets to perform in the store environment, a comprehensive glossary, digital note cards for review, a final exam, and a certificate of completion. Employees can complete the online courses at their convenience, outside of store hours. Click here to learn more about the course.
