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Resale Royalty 103: ‘VIP: Very Important Purchasers’


When 80 percent of your sales come from 20 percent of your customers, having a VIP Club that caters to that 20 percent makes good business sense. In this week’s episode of Resale Royalty, Sue decides to relaunch her old VIP club at the suggestion of one of her oldest customers. They decide to kick the club off with a fancy evening party that will show the customers that Women’s Closet Exchange isn’t just a retail store, it’s a social community for people who love quality fashion.

Resale Royalty VIP
Before they can start handing out the cards, they have to come up with a list of perks. They go with 10% off any purchase, invites to special events, early entrance to sales and dressing room pulls upon request. The cost of membership? $100. Since a handbag at the store could cost as much as $1,000, they’d make their money back on a single purchase.

Next it’s time for the event planning stage. Jourdan wants to be in charge but right out of the gate she annoys assistant JoJo with her overly explicit instructions for scroll rolling and favor bagging. Takeaway number one, if you want your staff to be enthusiastic about an event, make them feel like a valuable member of the team, not a low level servant. Don’t micromanage.

Later, the subject of employee innovative creates a problem for the store. When Molly hears a client complain about her overflowing closet she jumps at the chance to suggest a closet buy, but instead of referring it to Sue and her daughters, she offers to do it herself. Then, to seal the deal, she offers to organize the closet for free. The client is thrilled but Sue isn’t when she hears what happened. Molly is a sales person. She isn’t trained to do closet buys and Sue certainly isn’t going to pay her to clean up the client’s mess. Though, from an outsider perspective, closet organization services does sound like a natural add-on that could increase Sue’s business. Trouble is, all of this should have been discussed before Molly made the promise. Now Sue has to either let her do it or risk letting the client down.

Do You Know What You're Worth?

Sue decides to set up a test buy in the store. When she sees that Molly has the process down, she takes her along to the customer’s home to learn on the job.

Takeaway number two: give your employees the tools they need to succeed because at some point, you have to let go.

The episode ends with the luxurious VIP Club party. Champagne cocktails and complimentary make-overs work magic and the sign-ups start rolling in. The smartest move of the night, Sue gives a free VIP membership to the loyal customer who suggested it in the first place.

Crazy item of the night: A Ralph Lauren goat suede ball gown that originally sold for $5,000. WCE picks it up along with a vintage Gucci tote for $1,000 in store credit. The client then promptly spent the $1,000 plus an additional $400 before leaving the store. Now that’s good business.

What Do You Think?

Is the VIP Club worth taking a 10% hit on future sales from their best customers? Tell us your thoughts in the comment section below.

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Photo courtesy of The Style Network

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