Web Offers Key Lessons in Customer Loyalty

NEW YORK (TheStreet) -- Mabel's Labels, a Canadian online store that offers baby- and kid-friendly "sticky" labels for clothes, household items and stationery, has a good way of showing repeat customers it appreciates their business: Customers who hit a certain level of spending are invited into "Club Mabel."

There are club discounts for Mabel's products, the company says, and there's always a customer of the week getting sent a handwritten note and gift bag.

Mabels Labels has hit on a winning formula for making customers stick almost as well as their products. Much of the formula involves interacting with customers directly and through social media.

"It's not something that is advertised. It's just something that, once they meet a certain level here, says 'We appreciate you so much,'" says Julie Coles, co-founder of Mabel's Labels with her sister and two other women.

The company began eight years ago in her sister's basement and now has 40 full-time employees in a 7,500-square-foot workspace. A key factor in that success, Coles says, is the company's 40% repeat-customer rate.

And a key factor to getting that loyalty is good service and interaction with customers, she says.

Coles, a mother of six ranging from 18 months to 11 years, also blogs at The Mabelhood, in which she writes for other parents about what it's like to be a mom.

"We're not some faceless, nameless business owner," Coles says. "We're just like them and they feel connected to us. We're on Twitter and on Facebook. We're asking their opinions" -- on not only product-related questions, but on any issues parents encounter with their kids. The company has well over 17,000 fans of its Facebook page.

"It comes down to the fact that we really understand our customers," Coles says.

Customer loyalty is particularly crucial for small businesses, says Philip Guarino of Elementi Consulting. It leads to repeat business and referrals, two important factors for small businesses looking to grow.

At small firms, "customers see the people behind the service and/or product they are purchasing," Guarino says. "The human element is crucial."

But small businesses may want to take a page from larger firms that have gotten that way by not losing sight of that.

Zappos is a good example of a site that has customer loyalty, says Jen Berson, founder of Jeneration PR, a boutique public relations and marketing firm in Los Angeles.

Zappos' main product line is footwear -- a hard thing to sell online, since most customers like to try on shoes before buying. But the company knows that the simpler it is for a customer to conduct business, the more likely it is they will become repeat customers. "The Zappos' model is so great because there is no risk to the consumer," Berson says. There are no shipping costs, and Zappos makes it easy to return unwanted purchases.

Amazon ( AMZN) is another e-commerce business with strong customer loyalty. Berson gives some credit to services such as Amazon Prime, in which customers pay $79 per year for two-day shipping on many eligible items. The online retailer has two related services -- Amazon Student, which lets students with .edu email addresses have free two-day shipping with no minimum purchase, and Amazon Mom, in which caregivers spending $25 in a single order in Amazon's Baby Store gets additional shipping benefits.

"That's makes me feel like I want to be loyal to Amazon because the more I spend, the longer I get the free shipping benefit and exclusive deals on all of my essentials," Berson says.

CVS ( CVS) offers coupons to customers with specific near-term expiration dates.

"For small businesses that are selling exclusively online, one of the ways to get the word out is kind of like a PR outreach through online outlets," Berson says. "Try to reach blogs and websites that have content that would reach their target market and offer exclusive promo codes for their readers."

Capturing a customer's information, such as their email address, is particularly important these days because the information allows businesses to invite customers to opt in to newsletters and promotions, she says.

Implementing and managing email marketing campaigns like the big companies is essential. Owners of bricks-and-mortar stores should gather email addresses as readily as online sellers to do scheduled marketing campaigns highlighting in-store discounts, new merchandise and customer frequency perks that can keep customers coming back.

An email marketing program does not have to cost a lot of money. Websites such as MailChimp, MyEmma and ConstantContact are subscription-based services that allow a business owner to track and manage customer lists, Berson says.

Still, with the explosion of smartphones, BlackBerrys and other cell phones, these days mobile marketing can be even more successful.

"My advice to any business owner is to implement that text messaging follow-up system" because consumers are unlikely to be far from their cell phones or smartphones, says entrepreneur Anthony Morrison, 28, who has started at least eight businesses and written two books.

One of his business ventures, a one-on-one coaching and mentoring firm, recently sent out a text message blast that got $460,000 in sales in one hour, he says.

"We've never experienced that with email because people check their email at different times a day," he says. Text messaging "gives you that instantaneous blast of traffic and business."

-- Written by Laurie Kulikowski in New York.

To contact the writer of this article, click here: Laurie Kulikowski.

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