Customer Loyalty in a Digital World
Small retailers have an advantage in creating repeat customers.
Some retailers fail to recognize the magnitude of customer loyalty and its capacity to shape their business. Digital trends and new technology dominate today’s retail conversation. Diane Sweet, vice president of retail success at shopkick, noted consumers have found increasing reliance on mobile devices.
According to the 2015 Global Mobile Consumer Survey by Deloitte, Americans check their mobile phones 8 billion times a day. On average, people in the United States across all age groups check their phones 46 times per day. When it comes to Millennials ages 18-24, the average goes up to 74 checks per day.
Can a retailer even create loyalty within a detached, mobile, digital-reliant society?
The rapid expansion of social media has led to a more meaningful connection between the retailer and the shopper leading to increased loyalty and improved shopping experiences. Digital patterns have raised the voices of consumers wanting conversation, not channeled responses. Retail analysts from Avaya and Accenture are seeing consumers sharing personal information in order to get personalized benefits. A majority of U.S. shoppers prefer discounts or deals be proactively sent to them, with Millennials wanting these discounts to be highly personalized and relevant.
Sweet sees the mobile dependency as a key leverage position enabling retailers both large and small to be top of mind to consumers wherever they are. Rather than polarizing, new retail technology is engaging shoppers with customization and personalization like never before and strengthening relationships along the way.
The Heart of the Matter
The direct correlation between consumer choice as it relates to growth and profit sometimes doesn’t receive the focus and attention it deserves. Research has identified key drivers of commercial success that engage, evolve and sustain strong relationships — none of which more powerful than customer loyalty to the bottom line. It begs the question: What really matters to the customer, and should this reshape current thinking? Can loyalty be bigger than the brand itself?
For small retailers, the presence and resources of big-box stores threaten a second-tier approach in reach and effectiveness. However, when it comes to creating customer loyalty, the advantage yields to the smaller incumbents. Small business owners can not only compete, but also beat the larger competition by providing a level of service that cannot be matched. While the tools of marketing and customer acquisition may reign supreme with the big guys, smaller shops are in a game of their own. Deep discounts and vast options seem to guide buying decisions, but choice is driven by the heart, not the dollar.
Bob Phibbs, CEO, The Retail Doctor, a New York-based retail consultancy whose clients include some of the largest retail brands in the world, says, “Customers never forget how you make them feel.” Looking at trending consumer habits, smaller retailers may feel an angst for mandated change. But Phibbs offers some advice: Refocus on what matters. What works for the customer?
“You are a trusted advisor, not just a salesperson,” he says, reminding retailers the experience is what matters. “I believe we can make the world a better place by improving the skills of the people working in retail.”
Recent studies into consumer satisfaction by Oracle identify that after just one bad experience, 89 percent of customers will stop doing business with a retailer. Further, while business owners tend to think they provide an outstanding customer experience, levels of actual customer satisfaction don’t match management perception, especially when it comes to response and online chat, where only 8 percent of customers said their experience was superior.
The “ABCs” of retail guides the mantra, “Always Be Closing,” but the retail environment and today’s business requirements limit a salesperson’s actual time selling to about 22 percent, according to a study by Pace Productivity. Even with a 100 percent close rate, this still amounts to a success far less than potential. This sharpened reality is changing the focus and restructuring the process of closing to include tools, technology, content and conversation.
“Concentrate on your four walls, not what the other guys are doing,” Phibbs says. “Loyalty comes from a great experience. Care why the customer is there and understand everyone is unique.”
Making this work takes a combination of training and soft skills. “A job is beyond selling; without training, you’re just a warehouse,” Phibbs says. He believes it’s the responsibility of the retailer to create an experience for the consumer showing their choices matter and understanding how interests and needs can be converted into additional sales and retained loyalty.
Getting customers to trust you is the first hurdle. Understand why they are there and their needs. “So your son is beginning hockey at the local elementary school; what does he need and what have you gotten so far?” Phibbs asks as a sample question. Go through a checklist and be a trusted advisor.
Training staff on how to realize what is needed creates a comfortable conversation and a way to gently guide with conscious effort. Don’t bombard customers with random emails with general sales or messages that are not relevant, and be aware of the current status and what is meaningful. For example: “I saw your son’s team won. Maybe those new socks did the trick. Next week they are buy one, get one free.”
Retailers should look at what makes them respond and not respond, what feels good or not good while shopping in a store and then hold the mirror up to themselves. “Go out of your way for every single person,” Phibbs says. “Elevate the experience with passion and expertise.”
Phibbs also recommends highlighting staff on retailer websites. It’s a way to show enthusiasm for products by letting shoppers know the staff is important, real people are there to help and provide a feel for the store even before customers walk in.
Tricia Warrick is an Atlanta-based strategic relations consultant who specializes in content development and branding for maximum visibility and impact across omni-channel platforms. For more information or to comment on this article, email Tricia at firstname.lastname@example.org