Retailers face countless hurdles to providing a fulfilling and profitable customer experience, and shoppers can be quite unforgiving when their expectations aren’t met. How can brands step up their game?
Retailers never want to deliver a substandard experience or fail to meet customer expectations. That being said, getting everything right for each customer is a tough task – and it’s getting tougher every day. The pressures of yore are still alive and well: Acquire new customers, grow repeat purchases, drive basket size, increase margin per shopper. Now layer on top of that experience-related challenges like channel integration, pre-purchase identification, employee activation and a myriad of others that have cropped up and are proliferating.
There is no denying customer experience is an important motivator that shapes future behavior. Forrester Research found that 63% of CX decision-makers think the importance of customer experience has risen, and 90% think it is critical to retailers’ success. The Customer Experience Risk Study, from LoyaltyOne and the Verde Group based on Verde’s Revenue@Risk™ analysis, found that a typical retailer puts 16% of its revenue at risk as a result of negative customer-experience initiatives.
When we consider how most companies approach customer-experience design, too often they believe that, through a carefully constructed brand promise and consistent execution, they alone shape the expectations their customers have of them. This approach won’t successfully keep a brand in the game for long. Here are a few additional points to remember to deliver a smarter, more effective customer experience:
Get the full view: When prioritizing customer-experience initiatives, retailers often focus on what’s happening within their own walls (or on their own servers). Accordingly, many companies have journey maps upon journey maps that depict how, when and where their customers interact with them. The problem is that this assumes a one-to-one relationship. In reality, a customer’s retail experiences extend far beyond a single retailer’s walls. It is likely outside of that retailer’s walls where their expectations of that retailer are shaped – whether shopping at competitors, at other retailers or even in other verticals. Gaining a more holistic view of customers is critical to understanding their expectations and affecting behaviors. A smart strategy gathers, analyzes and curates data from a variety of sources to build a 360-degree view of a customer and understands where their expectations are today, and to what point they are likely to evolve.
Avoid analysis paralysis: An Oracle global research study found that while 91% of organizations aspire to be customer-experience leaders in their industry, only 37% have started formal customer-experience initiatives. Why the discrepancy? One possible reason is that they feel reluctant to act since so many experience initiatives miss the mark. In addition to the narrow internal focus mentioned above, customer-experience initiatives fail to deliver because too often retailers focus on the wrong metrics, favoring applause meters like satisfaction or NPS in lieu of more actionable financial metrics.
They also fall victim to the squeaky-wheel phenomenon in which they prioritize negative experiences that are the most frequent – or affect the most vocal customers, but not necessarily those most closely tied to financial performance.
Onward and upward: Consumer expectations don’t stay still for long. Recently, Warren Tomlin, IBM’s Global Chief Innovation Officer, gave a presentation that included a slide that read, “The last best experience that anyone has anywhere becomes the minimum expectation for the experience they want everywhere.” In the 1980s, the Kano model defined this phenomenon for product development and customer satisfaction, and it holds true today in all areas of customer experience: Something that’s new and exciting today will drift to become just another expectation over time.
To best meet and exceed your customers’ expectations and deliver an exceptional customer experience, ensure you’re effectively prioritizing your customer-experience initiatives.
Consider how and where your customers shop outside of your channels. Consider the investments you can make today to set their expectations across retail tomorrow. And, of course, consider the financial impact these initiatives will have.
No retailer wants to deliver an inferior customer experience. With the right tools and strategy, it’s possible to create more fulfilling and profitable long-term interactions.