|Image courtesy of Pixabay
We have all the customers we could ever want…
… said no business ever!
Wow! What would ever possess a CEO to say that?
It’s what Ed Lampert, CEO of Sears Holdings, told investors as he was trying to reassure them that he could turn the retailer around. More specifically, he said:
“We don’t need more customers. We have all the customers we could possibly want,” Lampert said at Sears’ annual shareholder meeting. “As soon as we start making money, people are gonna say, ‘How did I miss this?’”
“I give you my assurance I am not in denial,” he added.
There are a lot of things wrong with all of that! So I did a little digging to see what I could find out about this “turnaround.” First of all, he blames everyone, especially the media, except himself for the issues and current state of affairs at Sears. I don’t know; the last time I checked, if a company is doing poorly, that typically falls on the shoulders of the leadership team, and more specifically, on the CEO.
One article states that…
Lampert said Sears would remain focused on improving its relationship with its customers.
“The strategy we’ve been talking about for over a decade, we think it’s clear. We think it’s working. We have a lot of data that shows where it’s working, and where we need to improve,” he said.
There’s no explanation of how he’s going to improve customer relationships or what that strategy is that he’s referring to. And it’s odd that he believes what they’ve been doing has been working. Is that why, just in the past week, they’ve reported more store closings?
Customer retention (which, I’m assuming, is why he thinks he has enough customers) is a big focus for many companies, although there are plenty of others who simply focus on acquisition and attrition. For those who focus on retention, which it seems that Mr. Lampert is implying (he cites in one article that his turnaround is based on the new Sears loyalty program), there’s more to it than offering loyalty programs.
I shared a post on Twitter that Seth Godin wrote earlier this week about Training Customers, which I believe describes loyalty programs that retailers like Sears, Kohls, and JCPenney are using: When I get points, I’ll use/buy. When I get a discount, I’ll buy. Until then, I won’t buy.
That’s not retention. In the scheme of things, that’s not true loyalty, either. You’ve got to have a brand that customers want to follow, a real experience that customers want to be a part of, to be able to say that you’ve got all the customers you want. (And I can guarantee you that even cult brands, like Harley-Davidson or Apple, have never, ever said that!)
I wrote a few posts over the years that focus specifically on retention and a couple about just such “loyalty” programs. Take a look:
The Secret to Customer Retention
Do Your Customers Talk About Your Products or Your Ads
Why Customer Really Leave
The CX Proof is in the (Diet) Pudding
Yea, But Will They Keep You as a Customer
No company should ever – let me repeat, EVER – state (internally or externally) that they’ve got all the customers they could want. Attrition happens, natural or otherwise. But retention still rules the day. And in order to maximize retention, you’ve got to constantly be understanding customers and their needs (both current and, especially, emerging), expectations, and jobs to be done – and then innovating as a result of that. Trust me; innovation is not a word that comes to mind when I think of Sears.
You cannot buy loyalty; you cannot buy the devotion of hearts, minds, and souls. You have to earn these things. -Clarence Francis