Why credibility is the one asset you can’t discount your way into.

Retailers know how to put a price on almost everything.

We know the cost of the merchandise. We know the retail price. We know the markdown. We know the gross margin. We know what an advertisement costs, what we pay our employees and, hopefully, what it costs us to acquire a new customer.

But one of the most valuable assets in a retail business never appears on the balance sheet.

Trust.

You can't order it from a vendor. You can't manufacture it overnight. And you certainly can't buy it with a 20-percent-off coupon.

Trust is accumulated slowly, transaction by transaction, customer by customer. Yet it can be damaged remarkably quickly.

That makes trust not merely a customer-service issue. It makes trust a marketing issue.

In fact, I would argue that virtually every marketing decision a retailer makes either adds to or subtracts from the customer's trust account.

Every Promise Creates an Obligation

Marketing is fundamentally a promise.

When you advertise that you have the best selection, that's a promise.

When your website says an item is in stock, that's a promise.

When you say your employees are experts, that's a promise.

When you advertise "lowest prices," "best service," "easy returns" or "fast delivery," you have created expectations that your operation now has to fulfill.

The problem occurs when the marketing department makes promises that the rest of the business can't keep.

If an advertisement says "huge selection" and the customer arrives to find empty shelves, you haven't merely lost a sale. You have weakened credibility.

If the website says an item is available and it isn't, the inventory problem has become a marketing problem.

If you advertise exceptional service and the customer is ignored for ten minutes, the advertising may actually make the experience worse because you created an expectation that wasn't fulfilled.

Marketing doesn't end when the customer walks through the door.

That's when the customer begins checking whether the marketing was true.

Customers Have Excellent Memories

Retailers sometimes assume customers won't remember the details of an offer.

They do.

Maybe they don't remember every word, but they remember how the offer made them feel.

If the promotion sounded better in the advertisement than it turned out to be in the store, they remember.

If the exclusions were buried in tiny print, they remember.

If the "sale" price wasn't really much of a sale, they remember.

If the salesperson pressured them into something they didn't need, they remember that too.

Customers may forgive mistakes. Most reasonable people understand that mistakes happen.

What they are less likely to forgive is feeling manipulated.

There is an enormous difference between making an error and designing a marketing strategy that depends on the customer misunderstanding something.

One damages confidence temporarily.

The other damages trust.

The Dangerous Addiction to Discounting

Discounting can generate traffic.

I've run sales. Every retailer has.

There are legitimate reasons to reduce prices: seasonal clearance, excess inventory, discontinued merchandise, competitive situations and strategic promotions.

The problem begins when discounting becomes the primary language a retailer uses to communicate with customers.

If every email says "20% OFF," what have you taught the customer?

Wait.

If every holiday becomes an excuse for a sale, what happens when there isn't a holiday?

We invent one.

Eventually, the customer begins questioning the regular price.

That is where discounting starts colliding with trust.

A price should communicate something. It should reflect the value of the product, the service surrounding it and the retailer's confidence in what is being sold.

Constantly manipulating that price can unintentionally tell customers that the original number didn't mean very much in the first place.

Once customers stop believing your regular price, you have a much larger problem than excess inventory.

Trust Can Be More Powerful Than Price

Independent retailers sometimes assume they must beat larger competitors on price.

Frequently, they can't.

Fortunately, they don't always have to.

A customer may willingly pay slightly more when they believe the retailer will help them make the right decision.

That matters enormously in categories where expertise has value.

For decades in the shoe business, customers weren't simply purchasing shoes from us. They were frequently depending upon our staff to help determine fit, size, width, construction and the appropriate product for their needs.

If customers trusted the salesperson, price became only one part of the decision.

The same principle applies in furniture, jewelry, appliances, sporting goods and countless other specialty retail categories.

Expertise creates confidence.

Confidence creates trust.

Trust reduces the customer's perceived risk.

That has economic value.

Sometimes the Best Sale Is the One You Don't Make

There is a moment in retail that can build extraordinary customer loyalty.

It occurs when the salesperson tells the customer not to buy something.

Maybe the fit isn't right.

Maybe the expensive model doesn't provide any meaningful advantage for that particular customer.

Maybe the customer already owns something that accomplishes the same purpose.

Maybe the salesperson simply says, "I don't think this is the right product for you."

You may lose today's transaction.

But something interesting happens.

The customer realizes that your objective isn't simply to extract the maximum amount of money from today's visit.

Now your recommendation means more.

The next time that salesperson says, "This is the one I think you should buy," the customer has a reason to believe it.

That's trust.

And good luck putting a coupon value on it.

Your Employees Are Carrying Your Reputation

A retailer can spend thousands of dollars building a brand and have one employee damage it in five minutes.

That's why marketing and employee training cannot be separated.

If your advertising says you're knowledgeable, employees need product knowledge.

If your brand promises friendliness, employees need to acknowledge customers.

If you promise convenience, your policies can't make ordinary transactions unnecessarily difficult.

If you advertise a generous return policy, employees shouldn't act offended when somebody actually uses it.

Customers don't distinguish between your marketing department and your sales floor.

To them, it's all the same company.

Every employee is delivering the brand promise whether you call them a marketer or not.

Reviews Are Trust Made Visible

Years ago, customers asked friends where they should shop.

They still do.

Now thousands of strangers are invited into the conversation.

Online reviews have turned reputation into something customers can inspect before ever visiting the store.

Retailers naturally want more five-star reviews, but the objective shouldn't merely be accumulating stars.

The real objective is creating experiences customers believe are worth talking about.

Ask satisfied customers for reviews. Absolutely.

But also study the negative ones.

Occasionally, a negative review is unreasonable. Sometimes it is simply wrong.

But if multiple customers identify the same problem, stop arguing with the reviews and start investigating the business.

Your customers may be identifying a crack in the trust foundation before you see it.

Trust Compounds Too

There is a financial characteristic of trust that retailers sometimes overlook.

It compounds.

A customer who trusts you is more likely to return.

A returning customer is more likely to know your employees and understand your products.

That familiarity makes future purchases easier.

A satisfied repeat customer may recommend you to a friend.

That referral arrives with a portion of the original customer's trust already attached.

Now one good transaction has influenced another.

This is how reputation becomes an economic asset.

It doesn't happen because of one clever advertising campaign.

It happens because hundreds or thousands of promises were made and kept.

Ask One More Question

Before approving an advertisement, promotion, email, social media post or pricing strategy, retailers should ask one additional question:

Will this make customers trust us more or trust us less?

That's a tougher standard than asking whether something will generate traffic.

Sometimes the answer will tell you to change the wording.

Sometimes it will tell you to simplify the offer.

Sometimes it will tell you to stop making a claim you can't consistently support.

And occasionally it may tell you not to run the promotion at all.

There will always be another sale.

There will always be another advertising campaign.

There will always be another opportunity to offer 20 percent off.

But credibility is different.

It takes years to build, moments to damage and considerably longer to repair.

Treat it accordingly.

Because merchandise can be replaced, advertising can be changed and prices can be lowered.

Trust is the one asset you can't discount your way into.

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About the Author

Alan Miklofsky is a semi-retired business consultant and longtime independent footwear retailer. He spent approximately 40 years operating The Shoe House, Inc., doing business as Alan’s Shoes in Tucson, Arizona, before selling the business in 2022. He was a member of the National Shoe Retailers Association Board of Directors for 29 years and served as its Chair from 2009 to 2011. Alan was named NSRA Retailer of the Year in 2015 and received the top national score in Footwear Insight’s Gold Medal Service Award in 2019, and the store followed up with another top service score in 2023.

An early adopter of e-commerce, Alan founded Shoes.com as a Yahoo Store in 1998. He has contributed articles to Footwear Insight, Shoe Retailing Today and Specialty-Retailer.com and continues to advise retailers and businesses on financial performance, marketing, merchandising, operations and growth strategy. He is also a speaker on the practical application of artificial intelligence in independent retail.