Customer Loyalty 101:
Advice for Navigating the Retail Jungle...and Winning.

Retailing is a demanding business, even more so when your top price is $1.  And yet, despite these and other obstacles, many dollar store retailers manage to thrive and grow, in good times and bad, by maintaining great customer loyalty.

We talked to several retailers, both small and large format, to get their views on this subject.  What emerges is not so much a secret formula, but instead a checklist of simple common sense rules that keep the customers coming back and telling their friends.

To start with the basics, experienced store managers know that when a customer samples a store, she'll be back.  The bargains are simply too appealing to resist.  The hard part is getting them to try the store.

Many first timer customers have the idea that dollar stores offer inferior merchandise or that the selection is limited.  Of  course, nothing could be farther from the truth, but lets talk about getting the customer to sample your store.

First, dollar stores are the domain of female shoppers, generally blue-collar workers with household incomes of less than $30,000.  For these shoppers, perception is vital.

They are attracted to stores that look clean and inviting, but NOT those that look like they have spent a lot of money on furnishings.  Shoppers feel they won't be saving money if the store can afford to splurge on fancy fixtures and decorations.  So, keep it friendly.  No-frills merchandising really does work.

Friendly also means working hard to impress the customer with how good your customer service is.  Make it a point to greet every customer at the door, like Wal-Mart Does, and train your people to smile and make eye contact.  Nothing impresses a new customer more than a friendly store, and good management can control how the customer perceives your customer service staff.

Another thing that keep customers coming back is inventory turnover.  The most successful chains know that customers enjoy shopping for impulse items, the element of finding unexpected bargains, so make sure those items are turned frequently.  (Shopper frequency at dollar stores averaged 11 times in 2001, so that indicates a monthly turn of impulse items is about right.)

So far, we've been talking about convenience.  the other half of the customer loyalty equation is price, and the only way to consistently assure your customers of the best prices is to buy from reputable suppliers who have a history of delivering merchandise on time with no surprises.

Remember that your supplier is also your partner:  suppliers hear about new product breakthroughs before anyone else does, and it’s their business to know the market.  By doing your homework and working with the best suppliers, you can guarantee your customers the best value for their money.