Brush Up on Boomerang Measures

How frequently do your customers return to your store? This boomerang measure is an indication of your current retailing success. When you track the measure over time, it’s also an indication of where your business is going.
     Consider what’s happening with hair salons. CNBC says that customers typically visit every six weeks, but in economic downturns, it drops to every eight weeks. The frequency did decrease but now is improving. As a result, hairdressers’ profit margins are at almost 8% as contrasted with about 4% in 2008.
     As the interval between return visits decreases, offer your customers a broader range of products and services. This maintains the momentum of the boomerang. Consumers don’t like to experience the same things repeatedly. A Professional Beauty Association white paper says that during the time the frequency of visits was found to increase, spending on hair color increased by about 6%.
     When customers return soon and often to your store, the total of sales revenues for those customers averages a higher amount than that for customers who come infrequently. This is true even when the customer is making a large purchase on an infrequent visit and smaller purchases when shopping with you frequently.

• Coming in increases the likelihood the shopper will have others along. The shopping is combined with socializing. And somebody shopping with a group tends to spend more. Customers are more willing to tolerate the inevitable nuisances of shopping when they are with a group. This “misery loves company” effect has been noted by social psychologists at Vanderbilt University.
• According to University of Pittsburgh and Baylor University research, more than 75% of shoppers plan to make purchases beyond what they came in for. However, there is a limit for each shopping trip. The more shopping trips, the more often the customers stumble across needs they’d forgotten to include on their shopping list and items they didn’t realize they wanted until the items were in front of them or in their hands.

     To increase boomeranging, have migration paths for current customers:

• Merchandise a continuum of product lines. The retailer carrying Gerber baby foods could have all six product lines, starting with Birth+ and moving on up to Preschooler.
• The retailer could add more advanced levels to a loyalty program, keeping the customers returning by upping the challenge. If you have a silver level and gold level now, add a platinum reward level.

Click below for more:
Habituate Customers to Quick Return Trips
Minimize Customer Turnover