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Five ways you are losing retail customers

October 11, 2013 by Gary Edwards — Chief Customer Officer, Emathica

Customer loyalty is the backbone of every successful retail business. Although it is important to attract new customers, the real gauge of the brand's health and vitality is its ability to retain customers in highly competitive markets.

Despite this reality, in many cases, retailers are surprised to see their customers heading for the door rather than strengthening their relationship and commitment to the brand. In fact, there are at least five ways that retailers are driving customers to the competition — any one of which can put a serious dent in your company’s growth.

1. Failure to listen.Consumers want to know that retailers are really listening to them and using their feedback to improve experiences at the local store level. But less than half of consumers believe that their feedback is being taken seriously by retail brands. To close the gap, it’s important to engage consumers in two-way conversations and to inform them how the insights they offer will be used to improve the customer experience.

2. No rewards. Loyalty and rewards go hand in hand. To improve customer retention rates, retailers need to develop strategies to identify loyal customers and reward repeat visits. Loyalty programs, discounts printed on coupons, email promotions and similar tactics can all be effective — but the key is to offer customers something of value as an incentive for choosing your brand over the competition.

3. Lack of understanding.Unfortunately, many retailers don’t understand their customers, even though current technology makes it easy for brands to leverage customer data as a driver of customer experience management and business improvements. As a result, many retailers are leaving loyalty prospects high and dry, simply because they haven’t captured and analyzed key insights from their customer base. With the help of technology, you can improve customer retention by monitoring social media and other feedback mechanisms to better understand your customers’ needs and preferences.

4. Channel blindness.Consumers connect with retail brands using an increasingly diverse array of technologies and channels, often relying on multiple channels (e.g. smartphone, laptop, in-store visit) for a single purchase. If your brand isn’t represented across all available channels, you’re missing opportunities to connect with your customers — and encouraging your customers to abandon your brand for a retailer that is better able to address their channel needs and preferences. 

5. Purchase barriers.It’s common sense that customers respond more positively to brands that make it easy to locate products and finalize purchases. Yet, a surprisingly high number of retailers don’t consider how their purchase requirements present serious barriers to their customers. In the digital arena, complex navigation requirements may result in high cart abandonment rates; in brick-and-mortar, an uninformed sales associate can be an instant turn-off for customers. By streamlining and simplifying purchase requirements — and seeing the purchase experience from the customer’s point of view — most retailers can achieve an immediate payoff in customer satisfaction and brand loyalty.

Many retailers tout their commitment to customers, but surprisingly few reinforce their commitment by placing customers at the center of the brand experience. By shifting the focus away from the needs of the brand to the needs of the customer, retailers can become more effective at transitioning consumers to loyal customers and passionate brand advocates.

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