Home » A Tool You Can (and Should) Use From Time to Time

A Tool You Can (and Should) Use From Time to Time

We offered a layaway program at Toy House. It was one of those services my grandfather thought would be helpful for customers buying toys. It was simple, too. Just pick out the toys you want, take them to the register, put down a 10% deposit, make a payment once a month, and pay it off when you’re ready to pick up the toys.

Some people would pick up their layaway late afternoon Christmas Eve. They only had to hide the toys from prying children’s eyes one night.

On the customer’s end the layaway program was simple. On our end it was a lot of work. (That’s the way any program should be in a customer-centric business.) One reason it was a lot of work on our end was because our biggest fear was losing a customer’s product. In the thirty five years I worked in the store (including my part-time roles while in high school and college) we only lost three items that we didn’t have in stock in the store. That’s not bad considering we did over a quarter of a million dollars in layaway every single year.

Then again, we agonized over every single one of those losses because it was a failure on our part to service the customer.

I still remember them. One in particular was a Little Tikes Football Toy Chest. I remember it clearly because I was sixteen years old and my dad had me drive to Lansing to Toys R Us to buy one so that we could replace the one that was missing.

Another time I ordered the missing product from a fellow toy store owner out in California. I paid $84 in next-day shipping to have the $14.99 item in my hands Christmas Eve for the customer.

I didn’t bat an eye at the $84 shipping cost because I was looking at the big picture. It wasn’t $84 for a $14.99 item. It was $84 to protect the trust of a lifetime value customer. It was $84 to protect the integrity of the layaway program and the $250,000 in business it affected.

Sometimes it is worth losing a few dollars today to make more money tomorrow.

You probably don’t have a layaway program. But you do have customers in your store today looking for a solution you don’t have in stock nor plan to have in stock in the next day or two. She could have gone to Amazon, but she didn’t. She came to you. If you send her out empty handed, she’s likely going to Amazon now (and she might never come back to you.)

Unless you order it for her.

You could go online and order the item for her. Have it delivered to your store. (Note: you don’t even have to order it from Amazon. You can choose to support someone else.) It is the same for her whether you order it or she does.

The difference is how she feels about you.

You won’t make as much money as if you had it in stock, but you kept a customer happy by solving her problem for her (as she was hoping you would when she walked through your door.) Plus you get her back in the store to pick up the item.

If you know the lifetime value of a customer, quite often this will be worthwhile. If you look at each transaction as simply a transaction, then it will never make sense.

I don’t recommend this as a standard policy. You’re much better off having the right solutions in stock. At the same time, I want you to have the right frame of mind if you do decide to help out a customer this way. It makes sense if:

  • It will Surprise and Delight the customer
  • It will keep her as a loyal customer
  • There is a lifetime value of the customer that will pay off down the road

It isn’t a policy so much as a tool to help you keep a customer happy. Like all tools, it has a specific use. When used right it will make a difference.

-Phil Wrzesinski
www.PhilsForum.com

PS I have actually pitched this idea to several manufacturers that happen to also sell directly online. They should have a code for each vendor (such as your account number) where you can order directly online from the vendor, put in your code, get a back-end discount, and make the customer happy. Just think how much better that would be for you, your vendor, and most importantly the customer, than to have the vendor undercutting you or the customer leaving to go to Amazon.

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