The path to retail success sounds simple in theory: build loyalty and create sustainable growth by delivering a great customer experience. By doing this, first-time customers become repeat buyers and stick with your brand long term, allowing you to maximize their lifetime value as customers. But this strategy isn't as simple as it seems once you unpack the “customer” part of the formula.
It’s especially complicated now that the pandemic has shaken up old buying habits and new rules are changing how brands can communicate with customers. The truth is that everything is in flux. Are the people who fit your ideal customer profile in 2019 still your best customers in 2021? Many retailers are trying to figure that out by using surveys, which is a great way to take the pulse of a customer base.
Simple surveys like the Net Promoter Score (NPS) can give retailers insight into what customers are thinking. But like a hammer, NPS is a valuable tool only if the person using it has the skills to swing it effectively. Some retailers make the mistake of focusing on the wrong customers when they evaluate results, which can lead them down unproductive rabbit holes as they try to close the feedback loop.
Be Carful About Chasing the Cherry Pickers
A closed-loop feedback strategy lets retailers continuously improve the customer experience by responding to feedback, often provided via survey. This is a crucial strategy, but the thing to keep in mind is that you need multiple quality interactions to fully understand who your best customers are. In addition, feedback from your best customers must take priority over demands from “cherry pickers.”
In this context, cherry pickers are potential customers who use feedback opportunities to angle for one-sided advantages in their dealings with your company. In retail, the value exchange always has to be a two-way street. If you know who your best customers are, making changes to improve their experience makes sense because they deliver high lifetime value. However, making changes for cherry pickers won’t have the same result.
The best way to figure out who your best customers are is to get opt-ins for further communication during every encounter. Ask permission to gather cookies and to respond to questions via Alexis or Google. Also ask customers for permission to reach out via text, email or phone. Being proactive about getting consent for further contact will become even more important as regulations to protect consumer privacy limit outbound contact.
Being There When and Where Your Customers Need You
Getting permission to carry on the conversation increases the number of quality interactions you can have with customers, and that’s the first step in identifying your best customers. The next step is to centralize customer data so you can analyze it and see who lines up with your ideal customer profile. Then you can focus on improving their experience.
At the end of the day, success depends on creating the best experience for your best customers. That will require achieving broad alignment: the best products, the best communication channels, the best customer journey, and the best scores. When you know who your best customer is, it simplifies the processes involved in building loyalty, creating sustainable growth and maximizing lifetime value.
In other words, you have to make sure you're there for your best customers when they need you the most, which requires a deeper understanding of their challenges and what they expect from you. By focusing on your best customers, you can avoid chasing cherry pickers and improve the customer experience for the people who make your retail operation successful.
Tara Kelly is the founder and CEO of customer engagement solution SPLICE Software.
Related story: Retailers: It’s Time to Refine Your Value Proposition
Tara Kelly is the founder, president and CEO of SPLICE Software, which offers a cloud-based solution that specializes in using big data and artificial intelligence, through the scalability of cloud storage and secure API connections, to create messages that drive customer engagement and the desired call to action.
A serial innovator, published author and founder, president and CEO of SPLICE Software, Tara Kelly (@tktechnow) is passionate about technology’s potential to change lives for the better. She has consistently channeled that belief into developing technologies that enhance operations, enable better service delivery, and improve the customer experience. This has led to the creation of three customer experience companies and turning an innovative idea into a patented, proprietary technology (US Patent Number 9348812) that harnesses data streams to create personalized, automated messages. The technology solution was included in Gartner’s “Cool Vendors in Insurance, 2016” report and Forrester’s “IoT and Analytics Startups Can Turn Insurers into the ‘Good Guys’” brief.
Kelly – an open source activist and recognized user experience designer – served as a board member for the International Board for Voice User Interface Design, the Canadian Cloud Council, Technology Alberta and is a member of the Entrepreneurs Organization. Kelly’s expertise combined with tenacity, understanding of market trends, and strong communication skills has allowed her to create dynamic solutions and successful teams; not only in her businesses, but also as a community leader on volunteer boards including Food for the Sol, EO Water Walk, and Special Olympics Ontario. Kelly shares these experiences – and her goal of creating a healthy, humane work environment – in the recently published book, Our Journey To Corporate Sanity: Transformational Stories from the Frontiers of 21stCentury Leadership.