Part 11: Want Loyal Customers? Here's the "Secret Sauce"

Many readers of the articles in my blog series on loyal specialty retail pool products shoppers (Loyalists) have been wrestling with some counter-intuitive results. In many cases, Loyalists told us the individual advantages of shopping at a pool products store did not lead to a high level of satisfaction with overall value with their retailer. These surprisingly underwhelming results triggered us to drill down deeper and we began analyzing advantage combinations.

The Advantage Mix

In real life, each shopper experiences a combination of advantages. Could it be that that a certain combination, when delivered well as a group, is the key to customer loyalty — the secret sauce, so to speak? If so, could we identify the best combination that would efficiently maximize customer relationship strength, improve loyalty and increase business revenue?

To test this theory, we analyzed every combination of advantage — and there were hundreds — and compared each based on Loyalist recognition along with satisfaction with the overall value received from their retailer. 

The results are being published here for the first time, starting with two key patterns that caused us to consolidate some of the advantages in order to clarify results.

Applied Knowledge

Loyalists had a difficult time distinguishing “knowledgeable staff” advantages from “superior service” advantages. Looking back, this seems logical. For example, how does a consumer differentiate between the overall knowledge of how a pool operates versus the service of an employee applying that knowledge to help?  It is easy to see that determining which one (service or knowledge) is the singular advantage might be inconsistently applied. 

Our solution was to combine these two interactive “people” advantages into one new category we call “applied knowledge.” Satisfaction with retailer value then logically depends on how well employees can apply their knowledge to benefit consumers. The knowledge content can range from product recommendations to carrying heavy products out to a customer’s car. (It's thinking, "I have the knowledge that my company wants me to do this if the customer is not capable, and I apply it in a way that adds value.")

Product Line

Loyalists were also unable to provide usable differentiation between “product availability” and “product range.” Accordingly, keeping these as separate categories did not add value to this analysis. On the other hand, combining them served to simplify and clarify results.

So that's exactly what we did. We combined two “passive advantages” into one category called “product line.” Range and availability are two of its attributes.

Rather than provide hundreds of permutations, the chart below provides the combinations that ranked highest in percent of Loyalists who were extremely satisfied.  

B11

The Secret Sauce

Focusing on the grouping that provides the top ranking for satisfaction with the value Loyalists receive from their retailer, we found that combination #6, comprised of applied knowledge and product line, resulted in the optimum overall score. A full 85 percent of Loyalists that receive these two advantages are extremely satisfied with the overall value from their retailer. This is extremely high by today’s standards and an opportunity for every retailer.

In other words, this is huge! The key to creating and keeping Loyalists is contained in this “secret sauce.” 

The Problem: Only 19% of Loyalists are Served the Secret Sauce 

Many retailers told us they do a good job at providing applied knowledge (knowledgeable advice combined with superior service). When Loyalists were asked: “Do you experience these two advantages of shopping at your pool store over other outlets,” only 19 percent said yes. That means over 80 percent of Loyalists do not get served the “secret sauce!”

This is a really huge gap! You will learn in the next blog post that for those who don’t see these advantages, overall satisfaction with the value provided by their retailer drops to a mere 1.5 percent of all Loyalists. Stay tuned for more.

Your turn: 

  • Are you surprised by these results? How so?
  • How are your employees performing in serving the secret sauce?
  • How do you know?  
  • What are your biggest challenges preventing improvement in this area?

Read the previous post in this series: How Much Does Competitive Pricing Influence Loyal Customers?

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