Unfortunately, that metaphor has shifted at many large retail companies to address the loss of sales – and by extension, the loss of customers. So practitioners face a new challenge: Thinking like a shopper.
Here’s a little help to get into the mindset of the shopper. Convergys Corporation has just released extensive research into customer expectations and the customer experience in a number of industries, including retail. To capture a 360 degree view, the study included not only more than one thousand consumers, but also all front-line employee groups and executives. This survey will be featured in a RILA webinar soon.
The research revealed that, despite market wide recognition of the importance of the customer experience, almost half of the retail customers surveyed – 48 percent – reported having had a bad experience while shopping.
Almost three-fifths of these customers who had a bad experience reported it to the store or to someone in the company. That’s good news – because in doing so, the customers gave the retailer an opportunity to make things right and retain their loyalty, along with future purchases.
The bad news: more than four in 10 customers who had a bad experience did not report it, most frequently because they didn’t think the company would take any action.
These unhappy customers, however, did take action. More than 90 percent of customers who had a bad experience reportedly told friends or colleagues about it – spreading the negative word-of-mouth in a multiplying effect.
The worst news of all is that 40 percent of the retail customers who had a bad experience – which amounts to almost 20 percent of all shoppers – stopped doing business with the store without complaining or giving the retailer any chance to win them back. In other words, almost 20% of customers are “silently leaving” their retail provider because of a bad experience.
Perhaps not surprisingly, the study showed that retail executives believe they’re doing a better job with customers than they actually are. Executives underestimated the percentage of customers reporting a bad experience by almost 20 percent.
Fortunately customers are clear about their expectations. According to the Convergys study, the top attributes customers seek in retailers – all ranked in the top five by at least two-thirds of customers – are:
1. Knowledgeable employees
2. A good value for the money
3. Courteous employees
4. Treats me like a valued customer
When asked how well retailers were currently performing in each of these qualities, these same customers gave notably lower marks for the first and last- knowledgeable help and valued treatment. Clearly if your company wants to reduce the kinds of bad experiences that lead to the silent loss of customers, these two attributes are a good place to start.
Let’s consider the second of these: delivering valued treatment.
A Powerful Tool for Improved Customer Experiences
The central challenge for any large retailer in “treating me like a valued customer” is that the store representative working with the customer – whether in a store setting, assisting with a Web transaction, or handling a telephone inquiry – doesn’t always have personal knowledge of the customer’s shopping history.
As a result, the employee simply doesn’t know the customer’s true long-term value to the company, or their buying preferences. The employee is not able to treat a long-time customer who has spent thousands of dollars over many years any differently from a shopper who has just completed their first purchase. Nor can an employee offer buying suggestions based on other recent purchases, or extend special offers limited to high-value customers.
New retail technology called decisioning applications empowers employees in all channels to take advantage of that information, by using customer analytics in real time to add intelligence to customer interactions.
When a shopper is interacting with an employee – or browsing your Web site, or even using your IVR – the tool can access the customer’s records from CRM and other back-end systems such as billing data. Based on that customer’s specific data, along with business rules your company establishes, the tool then makes recommendations for employees or takes actions on its own.
For example, the decisioning tool can display on a POS terminal a customized offer based on the customer’s most recent purchase, or present the same cross-sell suggestion to an agent’s desktop in the call center. For a Web customer, it might convey the product recommendation directly via email or a special pop-up screen.
Because a decisioning tool incorporates customer lifetime value, it enables your company to target special treatment to just your most valued customers. Your store delivers the preferential policies and procedures your best customers are seeking, while reducing the overall costs of special treatment.
For example, a decisioning application can help your business provide top customers with:
A decisioning application can even help your company use the return desk as a loyalty-building tool for high-value customers. Returns can trigger discounted offers for customers whose buying history warrants such special treatment – cementing a customer relationship that may be at risk, without requiring across an -the-board return offer policy.
And because a decisioning tool can be implemented as an overlay application that leverages existing business systems and data resources, it can be deployed relatively quickly, with minimal disruption to current operations – preventing another kind of loss even as it helps your business retain customers.
Preventing any kind of loss is not easy. Fortunately, new technology is now available to control the problem while pointing the way to an even stronger, more lucrative relationship with your best customers. If you'd like more information about this study, please email morris.applewhite@convergys.com.