Small Retailers Must Evolve From Customer Satisfaction to Customer Obsession
Today more than ever, retailers are being forced to take their focus on customer satisfaction to extraordinary levels. The standard for customer satisfaction is being driven higher by companies like Amazon.com and its large retail competitors as these companies move from a focus on “customer satisfaction” to “customer obsession.”
This obsession has made factors such as two-hour shipping, highly personalized shopping recommendations, and free shipping and returns the new baseline for today’s customers. In turn, it has set customer expectations with respect to every other sales interaction — no matter the size of the business.
Meeting and exceeding these increasingly high customer expectations isn't optional in the age of Amazon; it's a requirement for survival. Without making this shift, retailers cannot provide customers with what they now expect.
Making the leap from customer satisfaction to customer obsession can be challenging if your business isn't a multimillion dollar company. So, how can small and midsize businesses (SMBs) remain competitive?
The truth is, SMBs can deliver the same, if not better, service to their customers as large companies. Size is beginning to matter less and less in the 21st century. So, what does success in today’s retail environment look like for these retailers?
- Pricing flexibility determined by each customer’s needs.
- A wide selection of products to improve the buying experience.
- Swift customer service in the method that the customer prefers.
Developing a customer-obsessed culture doesn't depend on size. In fact, it may even be easier for SMBs. It's not hard to formulate policies and procedures to support a culture shift to this new strategy.
In the past, implementing these policies and procedures has been difficult for many retailers because the underlying technology and software needed to enable price selection and personalized recommendations, all while meeting modern customer service demands, hasn't been cost effective.
The introduction of cloud technology in the last five years has changed that by lowering the cost of entry. Today, even the smallest retailer has access to the kinds of systems needed to be successful in the "Age of Amazon."
The main areas of focus for SMBs starting the journey to customer obsession should be price, selection and service. These factors will allow retailers to take the most important steps needed to remain competitive.
No one will argue that driving selling price down is not critical for retailers. However, a smaller retailer needs to not only focus on driving selling price down, but also on customizing it to the particular customer. Factors to consider include the following: is it a new or old customer, good or bad customer, the specific purchase (special discounts, rewards), geography, and season.
Driving selling prices down begins with driving purchase, storage, production and shipping costs down. Having procedures and systems in place to collect and correlate the right purchasing and consumption data allows an effective sourcing process that can result in lower purchase prices of goods. Automation of business processes can drive down costs by eliminating costly manual fulfillment and error-prone tasks.
Retailers also must begin deep analysis of their customers’ buying patterns to deliver highly customized pricing based on as many variables as are important to the customer. For example, if a retailer can determine that the cost of a product is lower at certain times of the year, then that product be can delivered at a lower price point during that period, ultimately resulting in greater customer satisfaction.
The reason Jeff Bezos chose books as Amazon’s first product was because the segment had the largest number of individual SKUs, ensuring that physical bookstores would never be able to stock them all. But an online bookstore could, so Amazon became the “world’s largest bookstore.”
So how does a SMB offer a bigger selection to their customers than everyone else? By combining its own stock with that of other suppliers, which can be quickly and easily shipped. This makes a retail company the “go-to” for a particular type of product and encourages customers to build the habit of purchasing through one business.
Building relationships with those suppliers is key to creating efficiency and competing with Amazon. Implementing modern business systems that can automate customer needs, store large volumes of product data, and facilitate multilocation inventory also will be crucial for this strategy.
Interactions with customers in a customer-obsessed company must be quick, complete, customized and fulfilling.
If something has to be done by or for the customer, then it should be easy to do, done in the least amount of time, and in the easiest possible way — with no errors.
In addition, the customer must be able to interact with the retailer using their preferred method. Today, that's self-service, whether it be through a web store, mobile application, email or phone call. This applies to both B-to-B and B-to-C businesses, and it means that retailers’ business systems must be omni-capable. Many customers now demand self-service from quote, through payment and even return.
The goal of customer obsession is to minimize problems. However, they will occur, and when they do, it's equally important that they get resolved as quickly and as smoothly as possible. Having a system in place that provides automation and self-service for problem resolution is becoming the standard.
However, if manual intervention is required and a customer service representative must be engaged, the representative can be much more effective if they have a system that gives them a complete 360-degree view of what's going on. Cloud-enabled business systems can now provide all this information instantaneously.
As the retail world shifts further into the digital realm, the customer journey will be key. Small retail businesses will need to go beyond customer satisfaction in order to compete with bigger businesses and build brand loyalty. Through flexibility in price, selection and service, small retailers can create a focus on their customers’ needs, and truly excel in a digital world.
Sunil Pande is the CEO of VersAccounts, a cloud ERP management system for small businesses.
Related story: Is Retail Ignoring its Customers?