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Who Are “True” Customers?
If customers or prospective customers consider your company a “commodity”, are they really true (or potentially true) customers? That’s a serious question to consider. True customers don’t see your organization as a “commodity”—they are loyal, appreciative and trust what you offer, and understand you are worth what you are charging.
I recently watched a discussion on the topic of customer loyalty among retailers such as Target, Walmart, Family Dollar, Costco, and others. Of the major big-box retail brands, one of the chains with the strongest group of loyal customers is Costco. If you think about Costco for a moment, what they are NOT is a commodity in a sea of retail “sameness”. Here are a few things that set Costco apart and that have led them to build a worldwide group of 129.5 million true customers in 2023.
Costco delivers superior service to customers. But not necessarily because of what you might consider typical “customer service interactions” out in the store. 90% of customer interactions with Costco store staff happen at the front of the store, from the card checker at the entrance to the checkout process to the member services desk to the in-store food offerings, etc. The Costco staff that do all the work to stock, clean, organize, and prepare the inventory are almost invisible. But they do an amazing, almost Disney-like job of maintaining their expansive stores. Think about how this compares to other big-box retailers you frequent.
Costco offers many major brands but also offers a significant and expanding number of high-quality store-brand products under their own Kirkland brand.
Costco’s purpose-built stores are designed from the ground up to maximize efficiency and provide a consistent customer experience.
Another very important element of Costco’s success formula is its membership card/fee. According to Forbes.com, “The fee itself is a factor in increasing loyalty—it’s a ‘sunk cost’ that encourages consumers who have made the investment to keep spending there.” Customers have to have this card to enter the store and to check out—ensuring there is a mini Costco “billboard” in the majority of Costco member’s pockets. And Costco’s “true customers” must not mind paying for this access, as they stated in June of 2024 that their annual membership renewal rate was 92.9%.
And since these membership fees provide roughly 50% of Costco’s annual profits, they are able to keep prices very favorable for their customers—especially relative to almost all other retailers that don’t have this alternate source of revenue to reduce their required markups to cover costs and provide some level of profit.
All of these factors help set Costco apart from all of its retail competitors. And because of this, Costco is not a commodity. And this differentiation adds up to significantly more “true customers” than many other retailers enjoy.
I feel a large part of my job is to ensure that Standard is never tagged as a “commodity,” or just one of the pack. To earn the business of true customers, we must go above and beyond in fulfilling customer needs and exceeding their expectations—always seeking ways to better serve. Even if we have to ask, “What more can we do to improve your experience working with Standard?”
By always striving to recruit and retain customers who are loyal, appreciate and trust what Standard offers, and understand we are worth what we are charging, we can all help contribute to another 75 years of success providing commercial roofing and building envelope solutions for true customers.