Opinion by Dave Griffin
Retailers want more loyal customers — they shop more, spend more, and provide more word-of-mouth recommendations.
There is a clear connection between customer experience and customer loyalty. A recent report conducted by Forrester Research found that, “customer experience highly correlates to future business”; and, according to the Customer Experience Impact (CEI) Report sponsored by RightNow Technologies, “86 per cent of consumers will pay more for a better customer experience”.
The evidence that customer experience drives customer loyalty is compelling, but how do you know if you’re delivering a great customer experience at every store, everyday? You measure it.
The economics of customer experience measurement systems like Net Promoter Score (NPS) have been widely lauded, with the original NPS text based on the premise that NPS is the ‘One Number You Need to Grow’.
While that statement oversimplifies a complex issue, there are numerous examples of how proactive customer experience programs like NPS can drive retail growth — just look at Coles’ financial turnaround, or the positive direction of Telstra’s share price.
Coles and Telstra are both highly visible examples of retailers that continuously measure the delivery of their customer experience efforts.
The CEOs of both companies recognise the importance of customer experience, and each implemented a formal customer experience program early in their stewardship. Both of these programs bring the voice of the customer into the boardroom, but more importantly, both arm their frontline retail staff with the store-based customer insight needed to improve individual store performance. Both organisations are driving customer experience performance top-down and bottom-up.
In the US and the UK, these programs are standard practice, with brands such as Best Buy, JC Penny, Verizon, The Home Depot, Tesco and ASDA all having continuous formalised customer experience programs in place.
But, despite overseas use, uptake of similar customer experience programs in the Australian retail sector is limited.
Of those retailers that have some form of store level customer feedback, I’ve found most bury it deep in their website, somewhere under the often hard to find ‘contact us’ section. Although there are notable positive exceptions, these tend to be few and far between.
So what can happens if you make providing feedback too hard? Further detail from the CEI report shows “after a poor customer experience, more than a quarter of consumers (26 per cent) posted a negative comment on a social networking site like Facebook or Twitter”.
According to the same report,“79 per cent of consumers who shared complaints about poor customer experience online had their complaints ignored” — that’s a rather stunning statistic.
Customers are happy to tell you how to do better but you need a formalised system in place to ensure you respond to and act on their feedback. Otherwise, beware the unhappy, highly connected, consumer.
Dave Griffin is managing partner at Brand Village, a research agency that provides shopper insight programs for the Australian retail sector.