A great customer experience is an integral part of running a successful retail business, especially in a slowing economy. That is because the brands and retailers that commit to providing the best customer experience possible are more likely to earn the trust of their shoppers.
Trust invariably leads to loyalty…
Loyalty leads to retention…
Retention fuels long-term, low-cost growth.
Moreover, loyal customers are more likely to recommend your products and services to their friends, family, and colleagues, which further increases long-term revenue growth and aids in profitability. This is why companies with great customer experiences see tremendous growth; according to Forrester Research, brands with strong customer CX grow revenues 4X faster than competitors.
On the other hand, if you fail to provide an exceptional customer experience, It's likely that your existing customers will churn and potential future customers will be driven away by negative reviews and an assumed lack of trust in your brand.
Data from various research studies suggests the vast majority of shoppers (+80%) will stop buying from a company if they suffer from just one negative customer experience.
But even if shoppers don't churn, a negative experience makes them more likely to:
For retailers, the economic cost of a negative review is severe—customers aren't going to buy a product that other consumers are slamming online.
In the short term, negative reviews damage income statements by reducing product sales, decreasing top-line revenue, and increasing carrying costs. Negative reviews can also lead to increased returns, refund requests, and exchanges, none of which help revenue.
Long-term the impact of negative reviews are even more severe for retailers, as consumers may shift their loyalty away from the brand for good. Over time, this reduced loyalty butchers customer lifetime value while adding to bottom line costs that further damage profitability (e.g., the cost associated with marketing, advertising, and rebranding to dampen the impact of negative reviews and attract new customers).
Therefore, it’s essential that businesses prioritize providing their customers with the best possible experience in order to remain competitive and attract new business. The key to success lies in investing in customer service training and technology that streamlines the customer journey in such a way that it builds loyalty.
Brands don't necessarily need to "pay for a better experience" on their own. A survey conducted by PwC found that almost 70% of customers would pay more for better customer experiences. This shows that not only are people willing to leave if they have a negative experience, but they are also willing to pay extra for a positive one.
The key takeaway here is that companies need to create a positive customer experience if they want to maximize their retention rate and ensure long-term success.
To do this effectively, companies should focus on investing in quality customer service practices such as providing prompt responses and personalized solutions; utilizing insightful data analysis to pinpoint areas where improvements can be made; and making sure their products or services meet or exceed expectations of their customers.
In terms of best practices for the customer experience, there are two tenets for retailers to keep in mind:
Above all else, retailers should strive to make all aspects of their customer experience as convenient and prompt as possible. If a retailer can do that, they will succeed in keeping customer satisfaction (and loyalty) high.
Some niche best practices include providing services such as boxless returns and printerless returns; being prompt with order notifications and updates; offering customers an online portal for self-service capabilities related to product questions, returns, and more.
Do not overlook the importance of offering a unique loyalty or rewards program as a way to enhance the customer experience. Urban Outfitters does a great job of this. Their Urban Outfitters Rewards program boosts customer satisfaction levels because it's easy to:
--->Just enter an email address, a phone number, and a style preference, that’s it.
--->You can earn points for anything, from downloading their app, to writing a review, to subscribing to their newsletter, and more.
--->Urban Outfitters goes to great strides to ensure its shoppers can activate their rewards with the greatest of ease.
But there's an additional value to providing a robust loyalty program that shouldn't be overlooked, and that is it provides a personalized window into what individual shoppers like (and don't like) about a brand.
Data collected from customer loyalty programs is incredibly valuable for retailers in terms of improving—not just their customer experience—but their overall business practices.
For example, retailers can analyze return reasons such as "too small" or "wrong color" to optimize their product detail pages and improve their manufacturing processes. In time, these improvements should lead to greater customer satisfaction, reduced return rates, and higher revenue retention.
Post-purchase is an important part of the customer experience—it's critical to customer satisfaction and long-term success, as it cements trust between companies and customers.
A great post-purchase experience begins with effective communication. Companies should ensure that customers are well-informed about their order status and delivery timeline, including any changes to the original order. Customers should also be kept in the loop if any of the products ordered are unavailable or out of stock.
Additionally, companies should provide detailed tracking information so that customers can be kept up to date on their package's progress. It's also important for companies to offer a reliable returns and refunds process, as this gives customers peace of mind in their initial purchase decision.
At the end of the day, having an exceptional customer experience is not only beneficial for customers but also helps businesses become more competitive and increase their profits. Investing in quality practices and using data-driven insights are essential components of creating an effective customer experience strategy that can help companies stay ahead of the competition while maximizing their retention rate—even during difficult economic times.