With huge range of both virtual and physical store options to choose from, shoppers these days are a clever but picky bunch when it comes to spending their money. So, if a retailer can’t afford the luxury of a fancy loyalty programme, a reward scheme, or a big customer experience push, how can they make sure it’s spent with them?
Here’s a few quick truths: one, customers who have a good experience are likely to come back. Two, customers who come back are more profitable than brand new customers. And three, customers who have a bad experience are likely never to come back, and, in all probability, will tell others about it.
So, it follows that driving repeat custom and building long-term profitable relationships has to come through understanding just what qualifies as a “good experience”. And knowing that must come from knowing what the customer likes and doesn’t like – because it’s their experience we’re talking about.
Listening to customers, and therefore knowing what makes them tick, smile AND spend money, is the bedrock of any good retail business, no matter what the environment or other factors affecting them. Many independent booksellers across the UK are an example of this – in the face of Amazon, the e-book and the big retail chains, many have survived and even grown by honing in on what their customer really want. Like coffee; or chances to meet the author; or free wi-fi; or even just comfortable chairs and a bit of a chat.
It sounds simple, and really it is: listening to the “voice of the customer” isn’t rocket science, it’s just plain good business sense. But when you have more than just a few customers, or you’re spread across more than one store or channel, is it actually something you can do? Without all those loyalty and incentive programmes, is it actually possible for a business to really listen to that customer voice, and work out what it’s saying?
Yes, it is. Although it’s not always as easy as it should be. The bulk of the many systems and solutions available to help retailers have a key failing – that is, they can’t capture feedback ‘in the moment’. That means they tend to either only apply to a very small proportion of customers, or the feedback they capture comes 24, 48 or even more hours after the happy (or not) event took place. That means a pretty big drop in accuracy. Which is a shame, because capturing large volumes of data at the point of sale can throw up some interesting stuff.
For example, here’s a few interesting things that we’ve discovered, from the nearly four million ratings we’ve captured to date:
• Yes, happier customers do really spend more when they hit the checkout. Around 12% more, on average – which is quite a lot over the course of a day…
• ..and the day does matter, because on the busy days, customers are on average a lot less happy with their experience. Showing that volume of people through the day is actually often less important than the quality of the time they spend with you.
• Volume also matters. If you only ever get just a couple of points of feedback from customers, it leaves you little to work with. A bigger picture is a better picture.
• ‘Experience’ is a big word, and it covers a whole lot of different elements that have to work together. Service, atmosphere, pricing, products – all of these have an impact on how a customer views a business, and how they decide to spend their money. We’ve discovered that the mix changes significantly by sector, by geography, by time of day and much, much more – showing how it’s really important to take that ‘listening’ point seriously.
• The devil is in the detail. Take this quick example with a big Australian retailer we work with. They discovered that their ratings score, and their revenue, was low in a recently opened store, despite the attention spent on launching it. When they dug into the data, they saw low scores for product range – even though they’d just stocked all their latest products. So, they quickly changed their store layout and promotional signage, and hey presto! Their average spend per customer transaction went up by around 10 percent. By quickly getting into the data and focusing on critical areas, they were able to turn around performance within a matter of days.
Simply put, getting mass, representative feedback at the point of payment enables a business to discover a lot about itself and help to build a great fan base. The volume of data allows them to come to quick, timely conclusions, and the accuracy of the data means that good decision making can follow straight after. Tying spend, sentiment, products and services together into a complete picture means that any retailer, of any size, can quickly identify focus areas where changes or improvements can make the most impact. In a world of tight margins and small gains, that’s really exciting.
Until recently, capturing anything other than card details at the point of payment was virtually impossible, and real (and that’s debateable) customer feedback has been largely an online phenomenon. But the retail world is changing, and innovating. As in many other industries, technology that was created simply for one thing can now be enhanced to do another. In this case, what was once designed simply to take a payment can now capture an opinion and build a relationship.
For many retailers, the point of purchase is the beating heart of their business. By giving it a pair of ears, we can also make it the brain.
Georgina Nelson is the founder of TruRating.Image credits:
- Image courtesy of TruRating