Gaining Customer Loyalty Is Not About *%$# Points

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Anecdotal evidence comes this month from Art.com that at least one Internet merchant understands the most important front in the marketshare wars is customer retention -- not slash-and-burn prospecting.


The day after iMarketing News Senior Editor Ted Kemp placed his first order with the custom artwork merchant, he received an e-mail explaining that the dimensions of one piece were listed incorrectly on Art.com's Web site. As a result, "the mat you originally chose will no longer be suitable for the large print.


"If you would like," the e-mail from Art.com customer service representative Jim Miller continued, "I can have a few of our interior designers choose a mat that best matches your original selection, all, of course, at no expense to you."


The next day, Miller sent an e-mail suggesting: "We selected a sort of dark green which would really look great with the print and the frame ... Please let me know what you think. I know that it is more difficult to make these decisions from the other end of a computer, but again, these adjustments are free for you..."


At this point, is there anything another online art merchant can do to get Ted's business? Not likely. Art.com has turned a mistake into a marketshare-wars victory.


For the record, Ted used his Yahoo e-mail address to make the transaction, so it is unlikely Art.com knew it was dealing with a reporter.


Granted, it's August -- a slow season for everyone except ice vendors. We'll see how Art.com does, along with everyone else, when the holidays arrive. Also, this is a company snapshot. It could be that Jim Miller is the one good customer service rep at Art.com. It could be, but not likely.


Companies tend to serve customers consistently well or badly depending on the business philosophies of their executives, especially the philosophies of the one at the top. We did not contact Art.com CEO Bill Lederer to get his customer service philosophy. After all, what's he going to offer but the company line?


Meanwhile, industry experts predict loyalty programs will flourish online. The reason has been repeated ad nauseum: "On the Internet, the next merchant is just a single click away. Online retailers must find ways to make the costs of switching to another site too high."


How's this for a way: Every time Ted sees his new piece of art, he's going to think of how much effort Art.com put into making sure he was happy.


Now there's a loyalty program.


Seems to be common sense, but instead of scrambling to offer the best service, many Internet merchants are busy discounting prices, adding personalization features and launching points programs.


Why? Because customer service requires a commitment well beyond long hours put in by company principals in preparation for an IPO, a concept that doesn't necessarily sit well with the Internet's gold-rush mentality. Rather, many online merchants think they can bribe customers into being loyal with custom content, frequent flier miles and trinkets.


But that's not loyalty. That's getting people to stick around just long enough to get a CD player or fishing rod.


Sure, loyalty programs and personalized home pages are great ways to add value to a brand. But loyalty is not about points or adding some feature that any merchant can buy. Art.com apparently has learned very early in the game that customer loyalty comes from providing personal service.
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