Lifetime Value Of A Customer Doesn’t Compute At Saks Fifth Avenue®

This past Saturday my wife and I went into Saks® to see what they would do to exchange my wife year and half old Tori Burch® handbag. I bought the bag for my wife for her birthday in 2010.

One of the straps on the bag is completely  detached and as a result my wife can’t use the bag. We know that an experienced shoe repairman would be able to repair the bag, but that wasn’t what my wife wanted.

She told me that Nordstrom® has a policy of exchanging or even taking the bag back. Not just handbags, but as far as she knows, pretty much anything. They understand lifetime value of a customer, though lifetime value of a customer doesn’t compute at Saks Fifth Avenue®.

My wife insisted we go into Saks® to see what they would do. I told her I didn’t think Saks® was going to do anything because that probably just wasn’t their policy.

Anyway, here’s what happened . . .

We showed the bag to a sales woman in the handbag department. She then tells us that the best thing to do is bring the bag to a shoe repair store and have them fix it. She even told us tat the same thing happened to her recently and that’s what she did.

I told her that we’re looking to see what Saks® would do to remedy the problem. “Well”, she said, “that wasn’t Saks®’ policy and there was nothing she could do.”

I asked her to get the manager.

A few minutes later the manager came over. He introduced himself and extended his hand to both my wife and I. His approach was pleasant enough, though he could have asked our names.

My wife explained the issue with the bag and showed it to him. I interjected that I purchased the bag in Saks® almost 2 years before and that I chose to buy it from Saks®, though I could have picked up the bag for the same price at Nordstrom®.

I informed him that Nordstrom® would exchange the bag today, had I purchased it there. He told me that he couldn’t do that as that wasn’t Saks®’ policy and that this wasn’t Nordstrom®.

I told him I was aware of the difference, but that I wanted to make something very clear. I know Saks® has a significant number of preferred customers and that my wife and I don’t fall within that group. But I told him; “ my wife and I have spent thousands of dollars in the store over the years and in all likelihood would spend thousands more over our lifetime.”

The manager listened…

I went on to explain that if I didn’t receive satisfaction today, the thousands of dollars I expected to spend at Saks® in the future would now be spent at Nordstrom®. I told him that over a $500 bag Saks would forever lose our business.

He apologized again and told us there was nothing he could do, an exchange just wasn’t the store’s policy. The manager let us walk out of the store…forever.

Do I blame him? No, not at all. I didn’t expect him to be empowered to make an exception for us. But that’s my point.

The lesson to be learned, and I often have to remind myself, is that if you’re going to let your customers walk away, you better be aware of how much it’s going to cost you. Saks® can afford to take the hit, but I bet you can’t.

When I say lifetime value of a customer doesn’t compute at Saks Fifth Avenue®, I mean this in a very literal sense. Look at the numbers. Let’s say my wife and I only spend $500 in Saks every 2 years. And let’s say we do that for the next 20 years. That’s conservatively $5,000 in future purchases at Saks®.

As a result of this past weekend’s episode, Saks® can now kiss those sales goodbye forever. But, here’s the greater problem for Saks. My wife already told her mother, my mother and both her sisters. I honestly don’t know how much any of them shop at Saks, but collectively I’m sure they would occasionally. They each have the some of the same bags, shoes and clothes as my wife.

You see, Saks® not only lost our business, they lost all that other business. And, you know the funny thing, comes holiday season, each and every year Saks will spend money sending us coupons, invitations and updates on sales. None of which we’ll ever respond to.

When lifetime value of a customer doesn’t compute at Saks Fifth Avenue®, Nordstrom® gets a boost! Funny how that works!

Bottom line: know what your customers are worth to you and your business. Don’t make it easy for your competitors to win over your customers. Empower your staff to make intelligent decisions, or at the very least, create an opportunity for your staff to get in touch with you to resolve the problem.

Here to help…

 
Eric Herman
President
DoMobileConsulting
Photo Attribution:
www.flickr.com/photos/arabani/4297818010/ by Arabani

TOPIC:  Lifetime Value Of A Customer Doesn’t Compute At Saks Fifth Avenue

Mobile Devices Cause Dell To Shift Its Focus Further Away From Consumers

SAN FRANCISCO (Reuters) – Dell Inc launched a new line of servers for enterprise customers, boosting its corporate business unit and shifting its focus further away from consumers, who are increasingly choosing such devices as Apple Inc’s iPad.

Chief Executive Michael Dell said his namesake company is no longer a personal computer company and has transformed itself into a business that sells services and products to corporations, a lucrative market that he said is worth $3 trillion.

Corporations have grappled with ever-smaller IT budgets as slow economic growth curtails spending. But many experts say tech spending will swell over the long term as companies upgrade systems, connect to the Internet cloud, or begin to make better use of user data.

Dell’s so-called enterprise business has doubled in the past five to six years and now represents half of the company’s profit, he added.

“It’s not really a PC company; it’s an end-to-end IT company,” Michael Dell said at an event in San Francisco where the company launched a new line of PowerEdge servers aimed at businesses with remote computing needs.

The company’s founder said the growth of Dell’s enterprise business validates its strategy of diversifying away from personal computers as a new crop of devices such as the iPad captivates buyers.

Michael Dell said he wants to focus on the enterprise and public markets, rather than a drastically smaller $250 billion consumer market.

“The consumer market is not particularly healthy and the enterprise business is much more so,” Dave Johnson, Dell’s strategy chief, told Reuters.

Dell’s storage and networking revenue grew 10 percent last year, while sales of its desktop PCs fell 4 percent.

Manufacturers of mobile devices cause Dell to shift its focus further away from consumers as the company refocuses on business and enterprise markets. The onslaught of feature rich mobile devices enable consumers to perform virtually every task they used to perform on their pc or mac, but now they can surf the net, text, engage their friends on social media sites from wherever they are.

Read the entire article here

QR Codes In the Spotlight As a Part of a Wallet App

MasterCard isn’t standing by while rivals such as Visa and American Express move forward with their own wallet apps. The credit card company is rolling out the first trial of its QkR mobile application, a mobile payment app that allows people to interact and initiate payments via QR codes, NFC tags and other technologies.

MasterCard is working with Australian cinema chain Hoyts and Commonwealth Bank on the first pilot of its QkR app (pronounced quicker), which I first wrote about in September. Visitors to high-end Hoyts movie theaters will now be greeted by QR codes and NFC tags on their seat armrest. Using the QkR app, available on both iPhone and Android, they can scan the QR code, manually enter in the code or tap their NFC-enabled phone on the NFC tag, which pulls up a menu of food items. Users can then pay with a preloaded credit or debit card and their food will be delivered right to their seat.

NFC move over as MasterCard places QR Codes in the spotlight as a part of a wallet app that’s launching in an Australian trial. The fight for positioning in mobile payments and mobile commerce is going to introduce unique applications in the coming months and years. Some say QR Codes are going to be put to pasture by NFC technology, but if MasterCard has anything to say about it, that’s far from the case. Click LIKE or SHARE to join the debate, NFC or QR Code?

To read the entire article, click here

Search, text messaging and use of QR code scanning are all native to mobile devices and the trends suggest mobile use among adults is only going to continue to get stronger.

Mobile Usage By Adults Is Gaining Real Traction

“This is the year mobile explodes,” he said, noting that U.S. adults spent 30% more time interacting with their mobile devices at the end of 2011 than they did at the beginning of the year. For the entire article click here.

Is it any real surprise that mobile usage by adults is gaining real traction? It shouldn’t be! Adults often follow their kids into new technology, but what can be fun and social for a kid, can be increased efficiency, savings and new opportunities for adults.

QR Code Use Expanded in 2012

Despite many consumers not knowing what to do when coming across a QR Code a whopping 86% of marketers said they plan to use QR Codes sometime in the future. For the entire article click here.

QR Code use expanded in 2012 as many more marketers put them to use. In the future, expect to see them more on packaging and in direct mail. Many more smaller businesses are likely to put them to use in their marketing as well.

This article expresses the importance of delivering a mobile experience to the mobile visitor. The pages a mobile visitor needs to see must be unique and distinctive from the desktop version of similar content.

Mobile Friendly Websites Require Optimized Landing Pages

…it is important for marketers to optimize campaigns for mobile and to optimize landing pages to improve conversions once traffic is driven there.

Click here for the entire article

Since click through rates are higher with mobile than desktop, mobile friendly websites require optimized landing pages to convert sales. The mobile optimized pages need to render quickly, provide easy navigation and provide a call to action.

Mobile Sites, It’s Amazing How Few Businesses Have Them!

Now, it’s saying that good mobile landing pages aren’t just devoid of Flash but have other characteristics that appeal to mobile users. Those characteristics include prioritizing content and making layouts simpler. And it’s now putting some weight behind its suggestions.

Why does Google care about this? Well, it can encourage more people to click on ads if it can ensure that the landing pages look good on mobile devices. Google is, at its heart, about advertising, so it makes sense that it wants to improve the experience, which should ultimately benefit the bottom line. But it’s also a recognition that the web is different on mobile devices, and as people move toward smartphones and tablets, it requires some adjustment.

Google said it’s in the interest of advertisers and web publishers to embrace mobile optimization. Google has said early this year that 79 percent of top advertisers do not have a mobile optimized site. But a recent study found that 61 percent of users are unlikely to return to a mobile website that was hard to access from a phone. Mobile consultant Tomi Ahonen wrote today that jeweler Tiffany & Co. optimized its mobile website and found that sales of jewelry on its mobile website grew by 125 percent.

While Google has a stake in optimized mobile websites, it’s not a bad idea for publishers and advertisers to get on board. The world is going mobile and yet, it’s still surprising to see how many websites are not built with mobile users in mind. This is not just a lost opportunity to engage with a customer, but it’s potentially lost business as well.

So what are you doing to capture the mobile visitor? There’s no reason to be one of the many businesses that for mobile sites, it’s amazing how few businesses have them! Check out our mobile site page, we’ll be happy to discuss how your business can become mobile optimized!

Mobile Optimized Sites Affect Google Keyword Rankings

Google has been prodding mobile website owners to optimize their sites for mobile. Now, it’s taking a more aggressive step by announcing that it will consider whether an advertiser has a mobile optimized site when assessing ads quality for all AdWords campaigns.

What this means is that in the coming weeks when Google looks at how to decide which ads to feature, it will consider how well a site is tailored for mobile devices, things like whether it works well for touch, is made for smaller screens, has shorter load times and avoids Flash. To be sure, advertisers who adhere to these guidelines won’t be guaranteed better visibility. But connecting to mobile optimized landing pages that perform better in AdWords will now be a factor in determining ad placement. This will only affect advertisers who advertise on mobile and won’t affect ads served on PC browsers.

This is interesting because Google rarely talks about what affects keyword quality scores in AdWords. Advertisers bid on ad placement based on keywords, but Google looks at a range of factors like click-through rates and ad quality to determine what goes where. So ads that are considered to be beneficial to users can be featured higher than ads whose owners sometimes bid more in AdWords.Click here to see the article.

Do you have a mobile optimized site? Since mobile optimized sites affect Google keyword rankings you should learn more about them. Click here to check out our mobile site page for help in becoming mobile optimized!

It goes without saying that your customers can’t bring the experience of your full website with them, but isn’t that the whole point? But, having an Optimized Mobile Website makes it easy for your customers to buy when they’re mobile.

When your customer, or potential customer is looking for something to eat, purchase or explore, they hit your full pc site and with a simple, easy to install script, they’re redirected to your mobile optimized website.

Your mobile optimized website has the features every mobile user wants:

• Fast loading content (hey, they’re paying for bandwith)
• Minimal graphics
• Call to action features including:
  • MAPS / DIRECTIONS
  • TAP TO CALL PHONE
  • MENUS
  • HOURS
  • COUPONS / SPECIAL OFFERS

What can you achieve with a mobile optimized site? You can create a web-based application that can be modified to change and grow as your business grows without the cost and constraints of platform based mobile apps like Iphone or Android. Alternatively you can create menu driven content to quickly engage mobile visitors. Lastly, you can create squeeze pages to collect customer names in exchange for something of high value. Mobile is simply loaded with new revenue generating opportunities.

A hidden benefit of optimizing for mobile is that mobile search is on the rise and will only play a greater role in the future as more content and mobile optimized search results are driven to mobile devices.

So, is mobile for everyone? The answer is yes. Mobile use continues to climb and as business owners transition from static to interactive content, buyers will continue to demand more. This is certainly an area in which you don’t want to fall short or get left behind.

So now you know an Optimized Mobile Website makes it easy for your customers to buy when they’re mobile. What will you do to get your share of the mobile explosion in 2012?

Business owners that see a substantial proportion of their business from within the surrounding community often have a leg up on mass marketers and big box retailers, because of the personal interaction and hands-on ownership.

The problem for many small business owners is capitalizing on their advantages. At the core of the issue is the ability to systemitize their business. That’s where they can learn from the big box chains.

One of the first things a local business can (and should) do is to make sure their website is optimized for mobile. That means: Tap To Call buttons, minimal graphics, fast loading, limited scrolling and mobile friendly content.

According to Paul Feng, group product manager for mobile ads at Google, “Search is a really critical part of our mission [at Google]. With computers in so many consumers’ pockets, it becomes even more important for Google and other search engines to “organize a wealth of information and make it universally accessible.” Google has seen mobile search grow at an exponential rate — it’s increased five-fold worldwide in the past two years. That rate of growth is comparable to the early days of Google’s desktop search. [source: 6 Hot Mobile Search Trends From Google & Bing - July 12, 2011 by Lauren Drell: http://mashable.com/2011/07/12/mobile-search-trends-google-bing/]