Picture Frames, Picture Framing and Picture Framers' Blog

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The chimera of the loyalty of customers

A chimera is myth,  delusion or illusion of something that is widely thought or believed to exist, but when rationally examined or investigated, is found not to be so.  When we began our picture framing business,  during the last millennium, or nigh on half a century ago, customer loyalty was the credo that small, local businesses would unquestioningly believe, seek and pursue.  Verily, we practised this belief ourselves and preached it to other business newcomers. We believed that if we picture framed customer’s works’ above and beyond the standards and norms in vogue at the time, that most customers would always return to us. Thus, when we custom framed a football jumper for Customer Smith,  and just before we’d finish the frame he’d ring us asking if   we could also include a ... photo in the frame,  we ‘d say, yes, no problem, even though it’d take us longer to do.  If Customer Jones  was having her wedding photo custom framed, and just before we’d seal up the frame, she’d  ring us wanting to change the colour of the window mat, we’d oblige, even though we’d probably already cut the original colour mat.  If Customer Williams complained about not having any picture hooks to hang her freshly-collected photo frame with, we’d cheerily give her some of ours, for free.   We, somewhat naively in retrospect, wished and hoped that Customer  would remember the extra work we did for them and that they’d  always come back to us.  Alas, all those Customers have either disappeared or they stopped being loyal because we don’t see them,  hear them, or get them anymore.  Customer loyalty has  transmogrified. It has gradually morphed with time from being a genuine, heartfelt sentiment, to being just another  industry. But  more relevantly, Customers have changed, they are no longer loyal because they have no reason to be or a need to be so. The loyalty industry has habituated them into expecting to be rewarded simply for returning to a store to buy what they’d always bought.  Of course, the internet, with it myriads of sites, products and choices has had a significant part in this customer change. Customers like this variety and diversity and are unlikely to be remain satisfied  with mum and dad’s Burl’s Eye maple frames. They want to possess Etsy’s, and other, kindred sites’, products or emulate its trendy customers’ whims and contributors’ foibles. Change and newness are their goals, to have something different, even if it’s only for the sake of it. These new Customers have their purses and wallets replete and bulging with everyone’s electronic Loyalty Cards. And thus, their  allegiance may arguably be deemed tainted, venal and even promiscuous, as it hinges minimally on personal experiences and personal satisfaction and maximally on the balance of  the reward in the form o points,  discounts or other benefits. The fulcrum of this venal bribery is the points reward system whereby retailers award these point in return for personal, financial and shopping data . Not only are these data can be quite advantageous for retailers, but the system itself subtly goads Customers into shopping more often, maybe more than they should, so as to increase ore accumulate their reward points.  So that’s how it works, but, we need ask, does the “ I-bribe-you-for-your-spending –loyally-with-me” system really work?  We cannot really ask whether the system is  effective or not with the points salespersons or rewards marketeers as they are not disinterested parties.  Since their industry and livelihoods depend on a positive or affirmative answer their advice could well be biased in favour of the system.   But we could make our own quotidian observations, and correctly deduce this by means of commonsense deductions. For instance, if the loyalty system really worked,  why are department stores and all types of retailers flooding customers with offers, specials, sales, discounts and holiday sales just about every week of the year?  To the average punter that could  suggest that cheaper prices are more important than rewards or points.  We could also try polling store owner and sales managers and ask them much the same question, do they really want loyal customers?   A big problem with devoted customers is that they tend to have expectations and entitlement demands above and beyond their shopping contributions.  So-called loyal customers tend to want products stores mightn’t carry, requests special dishes not on menus,  ask for services not on offer and tell store owners how to run their businesses.  On that score, we often read posts or blogs by well-meaning bloggers or business consultants comparing the advantages of customer retention against acquisition.  By and large these so-called experts extol the virtues of the former versus the latter maintaining that it costs businesses much more to acquire customers than to keep them loyal. However the true expense of keeping customers faithful to one’s store or brand is opaque at best.  This true expense does not include the hidden financial and productivity cost of making loyal but demanding customers satisfied.  In addition,  the cost of acquiring new customers is normally measured by the budget expenditures of advertising and promotional campaigns. Experienced retailers know that most customers just walk in or come in via third party sources and thus the factual cost of new customers acquisition is considerably lower than first calculated.  It follows the then that maintaining loyal but demanding customers  may well be more expensive than obtaining new ones, thus debunking well-established but inaccurate this myth of assumption.   Faithful customers can be, and often are, exhausting and expensive to service.  They often make difficult and unreasonable demands which are expensive to meet or satisfy.  Often they benefit from cheaper rates or discounts not available to new customers which can impact severely on profits.  As a final point, most picture framing store owners would have experienced the unsettling experience of so called "loyal" customers either demanding additional discounts, or cheaper prices still, to  match competitors' discount sales or picture frames specials. These experiences both  prove or or reinforce the conclusion that most customers are only loyal to stores so long as they deem these as offering the best deals or cheapest prices. As to the true cost of maintaining loyal customers, here’s a quick and easy example:  10 brand new customers buy a $10 ready-made picture frame each and that’s $100 in sales. At a profit of 50% that’s $50 in profit   10 old, loyal customers buy a $10 ready-made picture frame each. But they ask for their  20% Loyalty Discount so they actually spend only $80.  Thus the profit decreases from $50 to $30, and folks, that’s a staggering 40% loss in profit. And guess what, the more loyal customers come and buy, the greater the profit loss! In conclusion,  paid, subsidized or rewarded customer faithfulness is really loyalty bought at a price, seldom as profitable as marketers think and quite often,  not at all.

Comments

From a customer's viewpoint, I either will not, or I am extremely wary of giving my loyalty to any business. Banks, insurance and electricity companies, internet providers, etc, because they all rip-off, gouge, and otherwise take advantage of their customer at the end of their loan, subscription or contract periods. As for picture frames and picture framers, i don't know but usually I just buy the cheapest photo frames money can buy.
Harold B. - 19 Feb 2019 09:58 am
Very well written and matching many of my own thoughts and experiences!
Paul Z. - 15 Feb 2019 04:03 pm

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