Thanksgiving is approaching and you may be dreaming of autumn colors, a full belly, and catching a nap in front of the game – all in the company of friends and family. For most retailers it means something else completely. For them it’s time to enthuse action in consumers and get them into stores for Black Friday. The Black Friday strategy is birthed out of what is known as the Wal-mart effect. In simple terms the Wal-mart effect is the belief that consumers want as much stuff as possible at the cheapest price as possible. The success of Black Friday proves that for many, this is true.
However, the Wal-mart effect is not true for everyone. This is because some value connection, time, and experience more than simply accumulating more stuff. This motivated Recreational Equipment, Inc., commonly known as REI, to take a risk and close their stores on Black Friday in 2015 and then encourage their customers to #OptOutside instead. Not only did they close their doors, but they also continued to pay their staff.
Knowing the massive benefit Black Friday has on the bottom line, you may be thinking that REI is crazy for running such a campaign. But the results speak for themself. The strategy was hugely successful and REI is running it again in 2016. In fact, REI will never open their doors on Black Friday ever again.
In order for REI to truly connect and establish long-term brand loyalty with their audience, they understand that it is best for them to align themselves with the beliefs and values of their audience – and REI understands that those values include wonderful experiences. It turns out that it makes a lot of sense for the bottom line too and here’s why.
REI Wins By Understanding Relationship
In business, the one to many voice does not work anymore. Consumers no longer respond to this approach as they have become desensitized to the inauthenticity of advertisements. Rather, businesses are establishing a two-way communication with their audience. Consider a service like Netflix where consumers are willing to spend the time rating content they watch, thereby sending information back to the company. They do this to help Netflix curate a better experience for them individually. Its an approach that takes the stance of: What can I do for my customers rather than what can I do to my customers.
The basis of all good relationships begins with sharing information with those who have your best interest in mind. By closing for Black Friday, REI is doing exactly that and their customers are spreading the word and closing the loop by communicating back to REI via social media.
REI is delivering a narrative their audience believe about themselves. That’s what makes the idea so successful. To carry on that narrative, REI brought back the phrase “co-op” to invoke the idea of being in a community with them. It’s a two-way experience.
Measuring Success: Customer Lifetime Value and Customer Acquisition Cost.
Customer lifetime value (CLV) is one of the fundamental business success metrics executives focus on. It is defined by the total net profit a company makes from any given customer. Therefore, in order to maximize CLV, it makes sense that customers are consistently enjoying a positive experience with a brand.
Another vitally important metric for executives is Customer Acquisition Cost (CAC). CAC is simply the amount it costs to acquire a new customer. By connecting with a community of folks who have similar interests – people will begin to tell their friends, meaning the cost to acquire a new customer is incredibly low.
Building Customer Experiences that Matter with Helpshift
Helpshift believes community is important. It was developed to build better relationships between businesses and their users in order to foster better customer experiences.
By being available when your customer needs assistance, you are helping your customer to connect with your brand at the right moment. Customers are easily able to provide valuable feedback and to interact with you by sharing information about matters in which they care. You are then able to understand your audience better and then incorporate that feedback into your customer service experience. You are driving that two-way narrative. Bring the Thanksgiving traditions of authenticity, sharing, connection, and friendship into your business and you are sure to delight your customers.