Which comes first: Retention, Satisfaction or Execution?

An interesting topic for Retail Wire panelists today: In tough market conditions, the three tenets of maintaining market share (according to one author) include retaining your best customers, measurement of their satisfaction, and good execution. I weigh in on the subject of good execution as the starting point:

Of the three tenets — retention, satisfaction and execution — I would start with execution and use it as the foundation for the rest. Without good execution of the store experience (efficient checkout, friendly associates, competent replenishment), it’s impossible to achieve a satisfying shopping experience. And without the shopper leaving the store satisfied, it’s difficult to deliver the kind of commitment among your best customers that leads to loyalty and retention. McDonald’s well-documented turnaround in the past several years was driven by a focus on execution (and an outreach to new customers), more than a focus on satisfaction “metrics” or retention.

These are valid tenets regardless of good times or bad. It’s too easy to get sloppy about good execution (and the satisfaction and retention that follow suit) when the overall economy is growing, but at some point retailers who fail to execute are going to lose market share regardless of the economic climate. If the current downturn has any benefit, it focuses the minds of the “survivors” on better execution rather than growth for its own sake.


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