How to Win Customer Experience in Retail Industry
Competitive advantages of the past are no longer enough to win and retain customers. Accelerated commoditization coupled with more informed, connected and empowered consumers requires retailers to step up their game. Customer Experience (CX) Management has become the go-to retail expansion strategy to create what may be the most strategic and sustainable competitive differentiation.
Customer Experience technologies facilitate end-to-end consumer engagement journeys over physical, digital, social and mobile channels. They apply consumer personas, preferences, and purchase histories to deliver relevant, personalized and contextual consumer experiences.
But as consumers are more empowered, more informed and more demanding, delivering consistent and rewarding customer experiences is hard and getting harder. Consumers are increasingly impatient, connect with multiple devices and prefer to communicate on their channels (not yours).
And when brands don't comply, or cannot connect consumer multi-channel communications, they lose a valuable source of revenue. When brands request that buyers repeat themselves yet again, or put them through a maze of disintegrated connections, or just fail to meet their growing expectations, consumers show a propensity to quickly switch brands.
On the flipside, customer-centric retailers that do meet consumers rising expectations not only benefit from additional sales, but gain advocates who share praises within their social spheres and the public at large. All brands know word of mouth advertising is the best advertising bar none. And this digital form of word of mouth advertising scales customer advocacy to a never before possible reach.
By using CX technologies to streamline customer facing processes and reduce friction, the brand achieves several strategic benefits including increased brand loyalty, spend, customer share and customer lifetime value (CLV).
But how do these Customer Experience benefits translate to hard numbers?
According to a Tempkin Group Insight report titled, The ROI of Customer Experience, CX leaders enjoyed a 18.4% advantage over CX laggards in consumers willingness to buy more, a 19.2% advantage in terms of reluctance to switch brands and a 19.5% increased likelihood to recommend. Ask your CFO to apply those increases to customer share, customer longevity and customer referrals and show the cascading effects to both top line revenues and bottom line profits. You will likely find the revenue impact to be more substantive than any other business development program.
The below chart from the Forrester Customer Experience Index shows how CX leaders build more valuable companies than their peers.
It's difficult to rebuke the financial payback of Customer Experience when CX companies outpace the S&P 500 and CX laggards by such substantive values.
So how do you get started?
CX begins with a customer-centric culture and orchestrating customer journeys which lead to positive CX outcomes. As customer experience strategies should be tightly aligned with your CRM strategy, here are three areas to stimulate your customer journey thinking.
Customer experience management begins with expectation setting – and that often begins with advertising and marketing. Retail marketers have long been focused on brand management. But to many consumers brand messaging is pie in the sky and woefully insufficient by itself.
Consumers have moved beyond lofty, feel-good messages and seek retailers that are easy to do business with – on the consumer's terms. Fortunately, retailers are now empowered to link customer journeys with rich consumer data to systemically facilitate rewarding pre-sales and post-sales customer experiences.
Sales fulfillment is the next customer experience opportunity. Designing sales and fulfillment experiences which reduce friction and are easy, dependable, timely and personalized will most certainly improve conversions at the point of sale.
Research from CFI Group and eBay Enterprise puts this in quantifiable terms. The research report found that a whopping 96% of consumers said guaranteed delivery dates are important when choosing which online retailer to purchase from, and 46% said late delivery will cause them to look elsewhere before making another purchase from the retailer. While promotions will encourage about one-third of consumers to make another purchase after a late delivery, the damage done is enough to push 11% of consumers to completely abandon the brand.
Customer service is often the most critical point in determining whether consumers remain with a brand or switch brands. When consumers seek help, the company can facilitate or frustrate the consumer. The call center is often the most common access point for consumers, but research from the CFI Group report found that consumers prefer multiple call center contact methods.
57% of shoppers believe that customer service call center wait times are longer during the holiday season and prefer additional contact methods in order to resolve their inquiries. Shoppers seek tools such as online chat and cite speed (39%) and convenience (30%) as benefits. About half of the surveyed consumers said they would try self-service options, if available, to resolve their issues. This presents retailers the two-fold opportunity to better satisfy consumers and lower customer service support costs with self-service.
Customer Experience in Retail Isn't Optional
An Accenture Customer Experience in retail industry study found that 85% of participants view CX as critical to achieving their strategic growth priorities. 70% say that CX plays a critical role in the overall corporate strategy. But on the other foot, the Accenture research also found that more than half of all CX investments are ineffective.
Similar research from the most recent CRM/Unified Commerce Benchmark Survey found that two-thirds of retailers ranked improving the customer experience and engagement as their number one goal.
The customer experience is the customer's emotional perception of your brand based on the totality of their interactions. Of course not all interactions contribute equally to the customers' experience so an overarching strategy is needed. In my experience I've found it relatively simple to calculate the Customer Experience investment and payback.
However, the CX strategy can get complex when designing positive emotional outcomes for the many customer interactions which may include marketing campaigns, loyalty programs, mobile retail, account management, in store service, store merchandising, POS transactions, online order management, billing, product delivery and fulfillment, warranty management, services delivery, customer support, preventive maintenance, SLA compliance, renewals, and the many forms of omnichannel customer interactions.
Nonetheless, sidestepping CX is not a viable business option. Satisfying consumers and delivering good customer service has become table stakes in today's competitive landscape. Retailers need to step up beyond the minimum and design customer experiences to win customer affinity, turn customers into advocates and maximize profits.