5 Ways Retailers Can Attract (and Keep) Customers
The heartbeat of any retail organization is its customers. One bad experience and a customer may be gone for good. According to a recent survey from Zendesk, 79 percent of high-income households state they would avoid a business longer than two years after a bad experience. For many retail executives, two years can feel like a lifetime of quarterly reporting as well as monthly and daily meetings to discuss where they are against plan. Today's customers expect to be treated in a certain way, no matter where or how they shop. If your approach to customer engagement isn't up to par, they'll take their business elsewhere and your ability to meet plan becomes harder.
Marketing and customer service teams are typically at the forefront of managing customer engagement, but the relationship goes much deeper than that within a retail organization. These five "critical connections" show how teams such as call centers, shipping and fulfillment, and operations can have a significant impact on customer satisfaction and avoid losing valuable customers which are critical to fueling the business:
1. Omnichannel data: Whether you have brick-and-mortar stores, there's still an omnichannel component to your business with call centers and returns. Understanding how and when customers are interacting with your brand across these channels may help solidify your relationship with them. Did a customer buy online, but pick up an item in-store? Search online and buy in-store 30 days later? Are you offering the customer omnichannel options that fall in line with your competition? Customer choice and convenience is now considered the norm for every retailer. Now is the time to make sure you can connect the dots between channels to see where customers are engaging.
2. Delivery on promise: Retailers who don't deliver on the date they committed to a customer can experience a significant wake of negative customer sentiment, killing any chance of customer loyalty and repeat visits. The relationship between repeat purchase and missed shipping promise is often underestimated. Based on a recent survey of 165 retailers, more than 46 percent said they had average or below visibility into their shipping efforts, and more than 57 percent had average to no visibility of their returns. If customers receive incorrect items, partial orders or delayed deliveries, customer satisfaction and engagement is likely to be impacted. Tracing an order from transaction to delivery is crucial to maintaining that customer relationship.
3. Growing the customer base: To get a better picture of customer shopping patterns, retailers should know the following:
- the frequency at which their customers are (or should be) purchasing;
- if their high-value customers are repurchasing on a regular basis; and
- if they're relying too much upon acquiring new customers for growth.
It's been proven over and over that retaining a customer is less costly than acquiring a new one. The trick is not to overwhelm or annoy your customers to the point that you push them away. There's a science to how often customers should be buying and to understanding the likelihood for when that next purchase should occur. By using an accurate and repeatable customer growth model, retailers should analyze historical purchase patterns to project purchases going forward. For example, a retailer would use their customer growth models to identify customers who may be past their repurchase point and then reach out to those frequent shoppers to re-engage.
4. Order cancellations: One of the worst experiences is finding the exact item you're looking for, purchasing it, and then being informed that the order was canceled because the item was no longer available or perhaps because your credit card was declined. There are a number of retailers who aren't able to keep up with orders and, by default, will just simply cancel a customer's order. This is particularly troubling because once a purchase is made, a cancellation could go unnoticed by the customer, resulting in negative online reviews or losing the customer to a competing retailer.
For example, Hudson's Bay recently came under fire because it canceled several customers’ orders with stacked coupon codes — e.g., a 25 percent off coupon coupled with 20 percent discounts for loyalty customers. As a result, those customers vocally shared their frustration publicly on the retailer's social channels. Due to the apparent data disconnect between marketing and e-commerce, Hudson's Bay not only lost money on the cancelled orders, but could also lose more money on trying to keep those unhappy customers.
That's why it's vital for retailers to connect CRM, order management and warehouse data to provide visibility across departments and sales channels. Save the sale and you'll likely save the customer relationship.
5. Customer acquisition: How retailers acquire and engage with new customers says a lot about their long-term retention efforts. While maintaining your existing customer base is important, future success is also dependent upon fostering new customers. Tracking the behavior and purchase patterns of your new and repeat customers can provide valuable insight into how your brand is engaging them.
For example, a retailer could increase the lifetime value of one-time buyers by identifying specific pay-per-click keywords with the highest "acquirer" percentage. The retailer could increase their bids on these keywords in order to increase customer engagement among first-time buyers. You should also determine the best affiliate and social media properties for identifying consumers that continue on the journey to become loyal, profitable customers.
Customers are bombarding retailers with data every second of the day. You must treat every customer interaction with care and a high level of attention to detail because it does affect the bottom line. The key is understanding how to take the massive amount of data you have, turn it into insight, and then apply that immediately to intelligent decisions across the organization.
According to Bain & Co., a 5 percent increase in customer retention can increase a company's profitability by 75 percent. To ensure best-in-class customer engagement and protect your brand's reputation, it's crucial for teams to work independent of silos to implement strategies that capture all areas of interaction throughout the purchase process.
John Squire is the president of North America at OrderDynamics, a provider of commerce and order management solutions for retailers.