Customer value can mean many different things. It can refer to a smooth online checkout, an application’s ease-of-use, the availability and quality of customer support, or mobile functionality. But which of these features create a customer experience that matters? Which are the most valuable features that result in customers choosing your product or returning to your company’s services time and again?
The varying expectations of the customer
Naturally, customers want to feel valued—this is true in every industry. What’s more difficult to pin down are the nuances to customer value in the retail industry.
The customer experience is evolving constantly, brought on by the surge of technology. That evolution is plainly visible in retail where shopping has moved from physical stores to e-commerce. Customers in department stores may remember excellent interactions with staff on the shop floor, while online shoppers will be more impressed by one-click checkouts and next-day item replacements.
Then there is the age divide. More than half (53%) of millennials would rather look for retail information online than talk to a shop assistant, while 61% find it easier to chat to a retailer via digital communication channels like instant messaging than visiting a physical location. Same industry, different expectations.
How should businesses adapt?
Retail organisations should shift their focus from cost to value. The concept of providing value to the customer is far more malleable than talking about costs. By focusing on value, businesses can adapt the customer experience to their varying expectations and provide them with information they can’t find elsewhere.
Take, for example, approaching retail customers at different stages of the buying journey.
- Considering options: some customers buy purely on price. By shifting the conversation to value, you can help them feel they’re getting a good deal. Talk about how you can save them money in the long run through improved worker productivity, long-lasting products, post-purchase support, education, etc.
- Information gathering: many customers will research the product and/or wider market before making a purchase, particularly online. Some customers might look more fondly on the goals and values of the company than the price of a product. By connecting to the customer during this discovery phase—via social media, instant chat, or face-to-face—you can provide them with all the information they need.
- ‘Buy now’: these customers know what they want and are ready to complete the transaction. By enabling transactions that are as quick and easy as possible, you avoid losing the customer at the final hurdle.
Creating customer value in retail
Addressing customer value can be the difference between making a sale or losing a customer to a competitor. So, how can you create value for the customer?
Define your audience
Segmentation and profiling are crucial aspects to understanding the types of customer you have and what they value.
Analytics allow you to explore different variables, grouping customers who behave in similar ways and are therefore more likely to find value through similar actions. For example, you may assume that the largest customer segment will bring in the most profit. Analytics could show you that, actually, most of your profit comes from a limited range of products purchased by a small demographic of customers.
Analytics let you mine your consumer data to better understand who it is you want to target. So, when it comes to providing them with a strong customer experience—through personalised content, recommendations and offers—you have the best chance of driving sales.
Today’s consumers leave a digital trail for every online interaction. Building a personal profile of a consumer gives you a more complete picture. It enables you to predict their needs and understand what they want, so you can offer the right product or service at the right time.
Improve their experience
The best ways of providing value to the customer involve personalising their experience—providing them with things like tailored offers, loyalty schemes and ongoing support. Forrester reports that companies that personalise web experiences are seeing, on average, a 19% increase in sales. And given that personalisation increases loyalty, the long-term impact is even greater.
The goal of loyalty schemes is to generate repeat business. But making a loyalty scheme easy to redeem is just as, if not more, important than the scheme itself. Many loyalty schemes make redeeming points difficult, with restrictions around time or levels of quality. Loyalty schemes have become commonplace. Businesses must now differentiate by encouraging customers to actually use them. Allow more freedom in your scheme and more customers will take advantage of it.
The most common pain points retail customers will tackle are convenience, cost, selection and service. The most straightforward way of solving these problems is to ask consumers what’s wrong and how you can improve. Equally, provide a reason to engage. Simply asking consumers to complete a survey isn’t enough. You’re asking them to give up some time – what do they get in return?
Customer relationships, managed
Retailers should be prepared to try one or more strategies, learn, adjust and continually evolve. Consumer behaviours are continually changing; your customer value strategies must do the same. Customer relationship management (CRM) platforms, for example, give retail organisations the power to define their audience and what they value, so they can begin implementing the strategies, practices, and technology to meet their expectations. now that’s where innovation meets value, creating a customer experience that matters.