Costco is popular for selling products in bulk and customers are willing to pay a membership fee for great quality items and convenience. There are always new things to try and there are plenty of benefits available for customers like grocery discounts, travel vouchers, and reward certificates. Their stores are organized with friendly employees and customers love the one-stop shopping experience. The warehouses are huge, and customers love taking the time to browse while shopping for groceries. Given below are some tactics that Costco has used to build a loyal customer base and a reputation.
Lesson 1: A Membership System Packed with Value
Customers must pay an annual membership fee so that they can take advantage of their discounts and exclusive products. Their pharmacy also offers competitive prices compared to other pharmacies. There are a range of options for membership and the Business membership even allows customers to purchase goods for resale. There are cash-back rewards on almost all the products. Costco members also enjoy discounted prices on gas which they use when they move through a one-way drive through the system. There is also the added advantage of having a Doctor of Optometry in the stores who offer optical services. There is a photo center for members and customers can upload photos from their phones through the app.
Lesson 2: Competitive Yet Low Consumer Cost Pricing Strategy
The customer experience becomes more enjoyable at Costco because products and services are available at a relatively low price. The company sells products in bulk and hence it can offer such low prices. The store offers multipacks or multiple units of the same product. Multipacks are easy to sell as customers know that they will get a discount if they buy products in bulk. The store also sells bundles which means selling different products together. The advantage of selling bundles is that customers can get new products together with their favorite products. The kitchen appliance packages at Costco are extremely popular.
Lesson 3: Offer Quality Goods!
Customers prefer Costco not only for quantity but also for value and quality. Its private label also offers superior quality goods at budget-friendly prices. Customers are often effusive in their praise of the wines and liquors of its private label, Kirkland. According to them, the wines are cheaper and tastier than other brands.
Lesson 4: A Generous Refund Policy
The refund policy at Costco is very convenient as customers can return almost anything that they have purchased. The items can be returned at any Costco warehouse that may be different from the warehouse where the customer had made the purchase. This encourages customers to make purchases because they know that they can return products easily and this makes the option of buying products less risky. Not only that, but there is also the guarantee that if a customer purchases a product and the price is reduced within 30 days, Costco will refund the difference.
Lesson 5: An Affordable and Yummy Food Court
Bargain lovers also love the food court at Costco. The hefty slices of pizza, the hot dogs, and the refillable drink are popular favorites. The price has also remained the same for decades. This is also a great strategy to make customers loyal.
The author, Dara Busch, is co-CEO of 5WPR a leading PR company.
