How to Create Loyalty and Sales
How would you like to receive $500,000 in revenue from 1 percent of your store’s customers? Sedona, at Ward Center, has managed to do just that through a number of programs, including one that builds customer loyalty.
Named for a beautiful city in northern Arizona, Sedona, which opened in 1988, is dedicated to personal and spiritual growth. The store offers something for every sense.
A customers’ first experience is olfactory. “We’re like a bakery. We have hundreds of candles, incense and other odors,” owner Malia Johnson says. “I wish I could bottle it. Dozens of people ask if they can buy it.”
The store is visually dazzling, with thousands of colors. Antique Tibetan singing bowls fill your ears with sublime sounds. The biggest area in the store is filled with stones and beads, whose rough or smooth surfaces customers can touch. There are hundreds of different stones in every color of the rainbow. Customers can spend hours working on unique bracelets or other pieces.
Johnson says, “Some customers stay for four to six hours in the store. It’s not uncommon. Most stores would kill for that. There is so much to do, hear or feel. Many return with friends and demonstrate products to them the way we demonstrated it to them.”
Johnson purposely created the store to be entertaining. “Sedona is a place [customers] can spend time learning, trying something, smelling and listening. It’s a visceral, hands-on store.”
photo courtesy: Bob Sigall
Sedona builds value with thousands of small signs and information sheets that explain what items are used for or made of. It takes a lot of work to create the story cards, Johnson says, but they raise people’s levels of understanding and appreciation. While some of the products can be bought elsewhere or online, many customers buy them from Sedona because of the story cards that come with them.
Sedona also has one of the best customer loyalty programs in Honolulu. “The program started small in 1998, in response to the big-box retailers moving into town,” Johnson says. “We wanted to build customer loyalty based on customer service, rather than big-box pricing.” Johnson also wanted to be able to easily identify her best customers and target them with special sales promotions.
Sedona’s Star Card (named for the stars in the store’s logo) allows customers to collect 10 stamps, one for every $10 they spend. Customers don’t have to give Sedona their name, address and e-mail until they redeem the filled Star Card for a $10 store credit.
Customers who spend $1,000 in the store and complete 10 cards are called Supernovas. “These are people who love our store. Every time they come in, they spend lots of money. We want to know everything about them – their names, what they bought, what they like, and where they live. The staff knows them by name. The customers love the attention. It’s a great way to know our customers,” says Johnson.
She sends each Supernova customer a personal letter and a laminated card with his or her name on it. Supernovas get 10 percent discounts on most merchandise, free gift-wrapping, and advance notice on special offers.
More than 2,500 customers have Star Cards. More than 550 have five or more cards, and 230 have Supernova cards. Johnson estimates that 20- to 25 percent of her sales comes from Star Card holders, and 10 percent comes from her Supernova customers.
“Most of them like being a Sedona VIP,” Johnson says. “They’ve become part of our family. We cry when they move out of the state.”
It’s cost prohibitive for Sedona to send the 7,000 people on its regular mailing list more than two mailings a year. It’s more affordable and effective to target the store’s 230 best customers. “Every now and then, we send a blast out to our 230 Supernova customers with specials just for them,” Johnson says. “It costs about $100 to mail. A huge percent come in.”
Sedona’s Supernova program is something any store can emulate with time and effort.
Bob Sigall teaches marketing at Hawaii Pacific University and owns a company called Creative-1. Contact him at Sigall@Yahoo.com.
Do you like what you read? Subscribe to Hawaii Business Magazine »