Baking Up Business

Click on this link: http://sethgodin.typepad.com/. It may just be the most worthwhile thing you do today.

In addition to all that he already does and did, Seth Godin, a well-known American entrepreneur and marketing guru, keeps a blog. In this blog, he shares his insight on different aspects of the marketing world in the form of short but powerful quips that can inspire even the most energy-drained university student to do some hard thinking at the crack of dawn.

In his post titled “Loyalty,” Godin makes some thought-provoking remarks on the topic of customer loyalty:

“Loyal customers understand that there’s almost always something better out there, but they’re not so interested in looking. We’re loyal to sports teams and products (and yes, to people) because being loyal makes us happy. I think there’s no doubt that some brands and teams and politicians and yes, people, attract a greater percentage of loyal fans than others. Not because they’re bigger or better, but because they reinforce the good feeling some people get when they’re being loyal.”

So how can this message apply to a business like the Bakery? Well, the Bakery is certainly doing one thing right. It charges sky-high prices.

Think about it: charging the lowest price is not the way to attract loyal customers. As Godin puts it, “If your offering is always better, you don’t have loyal customers. You have smart ones.” If the customer knows he or she is buying the cheapest product available and getting a great bargain, any good feeling he or she might have felt for supporting the same business on a long-term basis would be negated.

So what is the best way to reward customer loyalty? If Godin’s definition of customer loyalty holds true, reward systems such as points programs only add to the original product’s value, thus making the product itself a more attractive offering. According to Godin, this detracts from the customer’s feeling of loyalty.

In my view, the best way to reward customer loyalty is to provide great customer service. By building a friendly rapport with a loyal customer and treating him or her with the highest amount of respect and appreciation, he or she would feel compelled to return because of something other than the products for sale, something that could be uniquely offered to that customer alone.