How Gilt Groupe Built, And Kept, Its 7 Million Member Fan Base
Building a loyal fan base, even while scaling a business in hyper-growth mode, can only work with a constant focus on customer experience, said Alexis Maybank, co-founder of flash sale company Gilt Groupe, speaking at the Women Entrepreneurs Rock the World Conference in New York on Thursday.
The six-year-old company sells products from close to 50 brands and has accumulated seven million customers, 60 percent of whom joined Gilt because a friend invited them. While it's easy to become intoxicated by fast growth and tempting to focus on that, nothing is more important than a relentless focus on the customer's experience, Maybank said.
Part of Gilt's allure is its flash nature: Sales of limited time offer items start at noon Eastern time, and sometimes sell out. Logging on checking out what's new becomes a part of the customer's daily routine--and getting ahold of the best stuff before it sells out is addictive.
"Psychology wise, [shoppers] know they have to move quickly," said Maybank. Gilt customers are competitive and shopping is "kind of fun that way." Seventy percent of Gilt's daily sales come in the first 90 minutes of the day's sales.
Like many fast-growing businesses, the Gilt team found that their site was not prepared for the volume of traffic during that 90 minute window, and its customer support team could not keep up with calls. So for three months the company didn't reach out to new vendors to expand inventory, didn't build out more services, and didn't solicit new customers. Instead, the entire team focused on improving and scaling the site and customer support services.
"We had to stop business operations and really rebuild infrastructure of our site. That was a really painful thing to do, to say stop," said Maybank. However, it was a necessary move to maintain the quality of customer experience and to sustain their customers' demand.
In e-commerce, it often comes down to scale, how big can you get as fast as you can, said Milbank, but what can set you apart from the competition is your focus on the customer.
"Competition keeps you on your toes, and you have to ensure to provide the best customer experience," she said.
JANA KASPERKEVIC is a graduate of Baruch College, City University of New York, where she earned a bachelors degree in Journalism and Political Science. She covers start-ups, small businesses, and entrepreneurship for Inc. Her work has appeared in The Village Voice, InvestmentNews, Business Insider, and Houston Chronicle, among others. She lives in Brooklyn.
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