How Educated Customers Raise the Bar on Retail Experience

Customer Dissatisfaction - how educated customers are raising the bar on retail experience The Verde Group

Customers love the ability to shop anywhere — online, in the store, or over the phone. What they hate is the fact that often they feel they don’t have all the information they need to make an informed decision. Or worse, they feel they’ve been misled.

Retailers should consider that their customers usually aren’t wrong. Instead, they may have made a wrong choice because they’re unclear, and it’s often because the retailer didn’t give them all the information they needed.

Educating customers has never been easy, and it’s getting more difficult. The multi-channel shopping experience means customers may get a different experience depending on how they interact with a retailer.

Customer dissatisfaction – broken communication
For example, if the customer bought something online and decides to return it, can it be returned to a brick and mortar store? Is there a cost to return it via courier versus in-store? If the customer phones the store, will the person who answers be able to accurately describe their options and the implications of each?

To make matters more complex for retailers, customers are relying on a number of methods — both online and in-store — to educate themselves prior to purchasing.

A 2017 Canadian Consumer Retail Research Study conducted by WisePlum, Microsoft and the Retail Council of Canada determined that 68% of department store shoppers found that ‘comparing product details or specifications in-store’ was very useful. At the same time, 61% said that ‘comparing product details or specifications online’ was very useful, and 60% said the same about ‘browsing for information on their smartphone’.

Even as retailers struggle to provide complete and consistent information to customers across all channels as part of a true omnichannel experience, customers’ expectations continue to rise. They’re not just comparing retailers with their direct competition, but with every other recent customer interaction they’ve had.

So if they recently had a flawless return experience with Amazon, then a poor experience with another retailer, the former is the new benchmark, and the latter is viewed as a failure.

Customer dissatisfaction – problems pre-purchase
And, according to the 2017 WisePlum research, that shopping experience is often anything but flawless. For example, 39% of department store shoppers said they had at least one problem before purchasing, with the number rising to 47% for Gen Y and Gen X shoppers.

Shoppers encountered many of these problems while they attempted to educate themselves pre-purchase — determining online availability, slow and challenging website navigation, discrepancies between online and in-store pricing, and even a lack of information about delivery charges.

While it’s true that many retailers are making heroic efforts to proactively educate their customers and provide them with complete information, customers could be forgiven for thinking that things are getting worse, not better. Especially if they’re using a credit card or renewing their cable service.

Credit card companies don’t make it easy for consumers to understand their statements. From hidden fees to service charges to how interest is calculated, many customers are unable to untangle the information and make poor choices as a result.

The rules often change with credit card companies as well. Look no further than ever-shrinking payment grace periods. According to consumer advocacy site WiseBread, “Grace periods are getting shorter or being eliminated”.

While cable companies are also known for indecipherable statements, it’s their ‘secret negotiation’ tactics that make many customers’ blood boil. Come renewal time customers know there’s a good deal to be had, but they’re not given the basic information they need in order to make a decision. Instead, they’re forced to speak to a line-up of customer service reps and loyalty managers, repeating their story over and over and watching the clock until a deal is finally reached.

Bad actors aside, there is a lot that retailers can do to reverse customer perceptions and make sure their customers are well-informed. Here are three points to consider:

  1. Look outside your industry for best practices
    Savvy retailers know that they share their customer’s wallet with a wide range of suppliers, not just those in their own segment. Many companies are both creative and effective in how they educate and inform customers.  There is much retailers can learn from them.
  2. Understand how customers buy, and not just from you
    Retailers should use customer feedback and detailed interviews to learn how customers buy and consume from everywhere, and what they view as their most positive experiences. Once it’s understood how they buy and what they’re most receptive to, education efforts are much more likely to hit the mark.
  3. Fix the customer’s problem first, then fix your system
    When a customer has a problem, fix it. They don’t need (or want) to know why your back-end process won’t let them do something or the 12-step escalation chain of command they need to follow. Retailers need to create a culture that says, “Send the customer home happy, then work things out”.

As customers embrace the omnichannel shopping experience, keeping them informed and educated is more important than ever. And if they do have a problem, companies can’t let the customer’s lack of information or understanding get in the way — they need to just fix the problem.

Think of the Ritz-Carlton hotel chain, who authorizes employees to spend up to $2,000 per day to improve the guest experience. Who will be raising the customer experience bar even higher tomorrow?

Paula Courtney is Chief Executive Officer of The Verde Group and Product Founder at WisePlum.

To Change or Not to Change? That is the Question

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Consumers are creatures of habit, often seeking out their favorite restaurant, hotel or store, because they know they’ll have a positive experience. These positive experiences make them loyal — whether it’s a perfectly grilled steak, a service associate who helps you find that perfect gift, or the ease of pre-selecting your hotel room in advance of check-in.

However, if a consumer’s go-to business never changes, the experience might seem stale. Once-loyal customers might consider switching.

This point was driven home when I watched the movie Chef, about a chef who wants to transform the time-tested menu to impress a food critic. The owner disagrees, saying, “Look, if you bought Stones tickets and Jagger didn’t play Satisfaction, how would you feel? Would you be happy?”

The chef sticks with his 1990s-style menu and gets scorched by a terrible review from the food critic.

The Business Dilemma

So the question is: when is it time to change and when should you keep things the same? Can you do a little of both?

The same dilemma is faced by many businesses. To change or not to change? When is the right time? When sales decline? When complaints increase? When stock prices fall?

If you act too quickly, customers may be upset. If you wait too long, customers—and their money—could walk out the door. But how do you know when the timing is right to introduce change? And, should it be a completely new product/servicing offering or just a modification?

Many companies come to mind when thinking about waiting too long to change. Consider Motorola which, according to Forbes, once had nearly 50% of the cell-phone handset market. In 1995, they passed up chances to enter the digital market early, sticking with more primitive analog designs, because it felt sure that analog’s 43 million customers couldn’t be wrong. Within four years, Motorola’s market share had slumped to 17%.

In deciding whether it’s time for change, companies need to understand a multitude of factors but key inputs to this decision are:

  • Knowing where they are in the product life cycle curve
  • Understanding the current state (baseline)

Product Life Cycle

Lori BlogTheodore Levitts classic Product Life Cycle has been around since 1965. Understanding which stage a product is in provides information about expected future sales growth, and the kinds of strategies that should be implemented to protect sales. The product life cycle of many modern products is shrinking, as Tom Spencer found, while the operating life for many of these products is lengthening.

As explained in Using Market Research in Product Development, many companies recognize the importance of offering something new. For this reason, they allocate substantial sums to research and development to help them determine when it’s time for a change. Most companies spend between 2% and 5% of sales on R&D.

However, as stated by Paul Hague in the third edition of Market Research, not all products/services necessarily completely die and need to be replaced with something new. There are often opportunities for modifications and improvements which can result in a rejuvenation of the product life cycle. In fact, per B2B International, 90% of new product research is focused on product additions and modifications rather than on new concepts.

Product improvements by their nature are less drastic and are much more easily accepted than conceptually new products. As with our restaurant example, an entirely new menu was perhaps unnecessary but rather, some innovations and changes to existing items while keeping some old favorites breathing new life into the restaurant while still keeping the brand intact.

Baseline Measurement

In parallel with a product life cycle assessment, organizations should have a baseline measurement of areas of satisfaction and dissatisfaction. As my colleague Jon Skinner wrote , by knowing what issues upset customers the most (causing dissatisfaction and disloyalty) and by understanding what makes loyal customers return and recommend a business, organizations have better insight into whether it is time to pursue the introduction of something new (where “new” is adding/changing/or removing a product/servicing offering). It is important to remember that the issues that upset customers the most aren’t necessarily the most prevalent problems but rather, the ones that have the biggest impact on customer loyalty.

However, a baseline is not enough. Businesses need to take regular temperature checks and compare their results to the baseline. More formal, data-driven Voice of the Customer (VOC) research will reveal even more about customer experiences and expectations. This could include short surveys after every interaction, more detailed monthly, quarterly or annual surveys and staying on top of ongoing social media chatter.

By using an experienced research partner for product life cycle assessments, baseline studies, and temperatures checks against the baseline, businesses can make informed decisions about when it’s time to change, what should change, and what must stay the same.

Being true to your brand or what sets you apart from the competition is great. But when you risk driving your customer to choose another business, it’s time to change.

Don’t lose your customers because they’re tired of the same old menu. Know when it’s time for change and get ahead of the curve!

Lori Childers
Vice President, Client Solutions

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