Analytics: The Key to Customer Experience and Loyalty
Businesses that understand customer needs provide a memorable experience and cultivate loyalty. These successful companies have shifted from gut-based to fact-based decision making by capitalizing on customer insights, and are leaps and bounds ahead of the competition.
So, who's got it right?
Take Abby and Logan Lechthaler, owners of The Downtown Grocery, who have transformed casual fine dining in Ludlow, Vermont. After you make a reservation at their restaurant, they call you to confirm your preferences for your evening out. When you arrive, they introduce themselves and address you by your first name. A meticulously trained staff then describes each dish in detail, explaining every ingredient so you can practically taste them. Each dish is paired with a suggested wine, delivering a highly personalized culinary experience that patrons remember.
While it's easier for smaller businesses to get to know each of their customers intimately, companies of all sizes can also obtain a 360-degree view of their customers. With the right digital tools and insights, retailers can make customers feel special, listened to and cared for. It's this familiar and emotional experience, based on customer intelligence and insights, which ultimately cultivates fierce loyalty that will last a lifetime.
Personalization is Paramount
Retailers are looking for ways to win over consumers, whether it's in-store, online, at a kiosk or on the phone. Data-driven insights prime marketers to generate the offer that's most relevant for each individual customer to increase product upsell and cross-sell opportunities. The ability to customize offerings and promotions helps retailers stand out from the pack.
The Toys"R"Us "Wish List" toy registry is a perfect example of a retailer prioritizing personalized experience starting at a young age. Parents encourage their kids to go online and add to their birthday basket. Toys"R"Us then curates product suggestions based on the child's preferences, behaviors and clickthrough activity. By leveraging meaningful insights derived from data analysis, Toys"R"Us offers customized suggestions and follows their shoppers’ preferences to offer them products that best fit their desires.
Right Product, Right Time, Right Channel
Traditionally thin margins, complicated by increased pricing competition from internet retailers, have driven companies to search for every cost savings opportunity available. With a clear understanding of customer behavior, retailers have the ability to predict future shifts in product purchasing. This allows them to align supply and demand to stock shelves and online distribution centers based on insights, which leads to more accurate inventory levels across channels. Retailers can also use dynamic pricing to direct consumers to the desired channel, such as online purchase or in-store if that's where the stock resides.
This "demand sensing" is a new capability which is only now possible because of advances in analytics that can synthesize massive amounts of meaningful data across channels. As retailers eliminate traditionally siloed environments in favor of an integrated information management infrastructure, the ability to synchronize demand and supply becomes not only a reality, but a necessity.
Enhance Customer Loyalty
A top objective for retailers is building trusted relationships with their customers over time. By integrating customer insights into cross-channel loyalty and rewards programs, retailers can leverage data to generate offers that are targeted, personalized, relevant and timely.
Petco, for example, understands the importance and necessity of targeting customers to build and sustain loyalty. Just like Toys"R"Us, Petco leverages customer data to track evolving interests, customize featured products and even suggest reordering frequently purchased supplies that they predict have most likely run low. The pet specialty supplies retailer also offers live chat on its website and mobile app, so users can receive personalized attention, ensuring lower shopping cart abandonment rates. In addition to all of these loyalty-inspiring initiatives, Petco's rewards program, "Pals Rewards," which offers customers 5 percent cash back on all purchases, is the cherry on top. The program shows customers Petco's appreciation for their continued patronage.
Digital Transformation: A Strategy for Success
These are elements of a successful customer experience and can be obtained by leveraging digital technologies to inform operational business decisions. A digital transformation enables retailers to provide customers with a seamless omnichannel experience by predicting their preferences, anticipating price issues, customizing offerings, fostering loyalty and maximizing lifetime customer relationships. It's a win-win for everyone.
Seeta Hariharan is general manager and group head, Tata Consultancy Services, Digital Software and Solutions Group.