Commentary
Connecting the dots between retail customer experience, profit
Amy Brandli, director of client services at Centriam, shares data insight on a recent survey that asked consumers what they want and retailers likely aren't getting the message.
April 26, 2018
By Amy Brandli, director of client services at Centriam
Driving same store sales is an increasing challenge in the constantly changing environment of retail. Competition is fierce. Technology, especially mobile and the internet, has reshaped how customers shop, which leaves retailers to reinvent themselves to meet the demands and expectations of their customers.
Whether in store or online, one of the easiest ways retailers can stay relevant is simply to ask customers what they want. We did just that at Centriam, by surveying shoppers at the nation's largest retailers.
In a recently published white paper, Centriam illustrates the connection between profit and retail customer experience. Here are a few of the highlights from these findings.
Customer experience issues go unseen
Customer experience is just as important to your success as a retailer as user experience is to a website's success. If there are hiccups along the way, the potential customer may turn away. Centriam's research reveals a major problem for retailers, however, is that while problems exist in a customer's shopping experience, they are often not exposed.
Only 4 percent of negative feedback ever reaches corporate decision makers, leaving an overwhelming majority of negative experiences either undetected or at the local level and unable to be solved systemically.
The solution: Uncover the concerns and issues that create negative customer experiences and surface them to individuals in your organization who can solve them. Develop a feedback loop from store to corporate decision maker.
Proving customer experience matters
Customer experiences certainly matter, and the survey validates it not only gives customers a 'warm fuzzy,' it can impact the bottom line. There are two significant findings to be addressed:
1. Customer experience relates directly to customers returning to your stores.
2. Customer experience relates directly to a sense that money was well spent.
Thus, positive customer experiences translate into repeat customers who are less price sensitive.
The bottom line: Positive customer experiences drive sales. Centriam's survey found customers who recently had a positive experience were eight times less price sensitive.
Finding solutions to customer feedback
Centriam's findings lay out a clear opportunity for retailers to move toward increased profits by focusing on improving customer experience. There are two things that must happen to secure this: (1) maintain positive customer experiences already happening; and (2) identify root causes of negative experiences and create solutions.
Social media and reviews helpful ... but not enough
Listening to or reviewing social media site comments is helpful, and that's a step that many retailers take. This process can help maintain positive customer experiences, but it likely only benefits promoters and not detractors.
As it turns out, promoters — those customers who have had good experiences with a store and are more likely to recommend it to others — are much more likely to provide negative feedback on social media forums rather than detractors — those consumers who have had negative experiences with a retail store and are less likely to recommend it.
The things promoters complain about are likely to be quite different than the things detractors would complain about. This imbalance of sourcing for negative feedback results in biased feedback, or feedback that does not provide the whole picture of negative experiences.
To determine the root causes of negative experiences that detractors encounter, you need to hear it from the detractors directly. This process should not be inhibited by fear of what those negative experiences may reveal, but should be viewed as an opportunity to improve customer experience and drive profits.
How do you solicit feedback from detractors (as well as promoters)? You directly ask them for feedback via surveys rather than wait for someone to post a comment on social media. Customers want surveys, but they want it through email or text, not via phone calls. Customers today are savvy with their devices and you should use that savviness to collect data that can be analyzed and used to improve customer experiences.
Develop a plan to invest in customer experiences
Managing customer feedback should be a strategic part of your plan. Like customers, retailers must be savvy with technology to capitalize on the data obtained from surveys. Through technology, you can merge data from various sources to provide a more comprehensive assessment of the business and create benchmarks for success. This plan must include two components:
● An established customer experience measurement platform to track progress and behavior.
● A system to address and follow up with customers who have had poor experiences.
Once you obtain comprehensive data and create a system to store, analyze, and use that data, you can expect a boost in sales and profits to follow.
