A renewed focus on the customer is the best way to fight off disruption from the likes of Amazon, according to the author of a new book on customer experience.
Entitled “100 Practical Ways to Improve Customer Experience”, the book aims to help retailers turn their undefined and decades-long aims of customer-centricity into workable strategies.
But co-writer Martin Newman, who is the Chairman of eCommerce consultancy firm Practicology, tells InternetRetailing he is not currently confident about the industry’s progress.
“In retail we tend to be a bit sheep-like. We tend to follow a lot.”
Newman, who wrote the book alongside academic Malcolm MacDonald, suggests this mindset leads to generalised discussions of concepts such as omnichannel or digital transformation but not a clear idea of what they mean.
“If you ask 100 businesses what these terms mean you will get different answers,” says Newman.
He says the solution to this impasse is instead to “start with the customer”, although he admits this “sounds like a cliché.”
Retailers, he says, should organise their strategy around “how you put the customer at the heart of what you do and what that means, then working back from that and working out what you need to do with systems, people, skills and processes.”
The majority of retailers still don’t understand this, says Newman, too often thinking about technology or the organisational structure first rather than as a means to serving customer experience.
As well as Newman’s own experiences, the book draws on examples and insights from a number of retailers. One that Newman highlights as exemplars in “starting with the customer” is bed retailer Dreams.
“Dreams was broken when Michael [Logue] became CEO –pretty much bankrupt. He’s added £100 million to the top line and £50 million to the bottom line in four years.”
This has been achieved by constantly listening to customers, particularly through the “Pillow Talk” customer feedback tool, introduced in 2014. This generates 3500 pieces of customer insight per week on its online and in-store performance, as well as products.
“He uses that on a daily basis when making decisions. That’s the difference between a business that gets it and the majority of retailers that don’t.”
Newman characterises this as quantitative data but says that ideally retailers should factor in qualitative data from direct customer discussions. This can particularly shed light on strategic decisions such as what products are missing and ways to improve in-store experience.
He doesn’t accept the argument that customers don’t know what they want until they are given it, citing Dutch lingerie retailer Hunkemöller as another example of a business that has grown through learning from the customer.
“I do get that if you look at very innovative technological-led businesses they would argue that they define what customers want to do. When they first came up with iPods I’m sure that that probably wasn’t a customer that had the idea.”
But Newman argues that the innovation still stemmed from the same approach: “they were still looking to solve what was wrong with how customers listened to music.”
“It may be that not all customers know what they want but you can at least get an idea of the type of experience they want. I believe that you involve customers in helping to define the type of products and services and the type of experience you need to deliver across channels.”
“We’re not talking about reinventing the wheel but getting the basics right, which a lot of retailers still aren’t able to do.”
But the problem for some companies is even more fundamental than that – to get genuinely helpful feedback, companies need to be talking to the right customers.
“Most retailers don’t know who their core segments are – 70 to 80 percent of sales are dominated by 20 to 30 percent of a retailer’s customer base. But very few know how that segment is constructed or who they are. If you don’t know who they are what they are looking from you as a business you can’t define what experience you need to deliver and what you need to do with your people, tech and processes to execute that.”
As well as this kind of data, Newman recommends looking into how responsibility for customer experience is divided across the business.
On the one hand, retailers should ensure that somebody within the business has a mandate to improve customer experience. This could be somebody hired from within who has worked in contact centres, for example.
But on the other, it is too much to expect one person to drive a change of this magnitude and Newman says that “you need permanent involvement from people across the whole business.”
He uses distribution as an example, saying that “making sure the supply chain works, making sure products are replaced on time in store and online and that orders are fulfilled in time” are all customer service challenges.
As for Newman’s next hypothetical next book, he hopes to focus on the corporate culture within businesses and how that can help drive change, as well as the dilemmas involved in building a corporate culture. He names the future of the physical store as another area he’d like to explore in future.
Perhaps the best way to close is with a quote from the book: “Put the customer first…If you don’t, someone else will.”