How the personal touch drives retail success
Retailers today have to go the extra mile to secure customers’ attention. Tactics, like personalisation, which previously were labelled ‘nice to have’, are now essential.
Indeed, brands looking to succeed in this changeable marketplace, must create personalised experiences through the customer journey to meet rising expectations. Those that do it well will see results, with reports demonstrating revenue increases two to three times faster than those who don’t personalise experiences.
What’s driving demand?
Research suggests that customer expectations for personalised experiences will increase approximately three times from 2017 to 2020. So what’s behind the demand?
First, technology and its enablement of omnichannel retailing and free movement across channels. Customers expect brands to serve them however is most convenient – meaning across multiple channels at a time that suits them. Medallia research found that delivering a great omnichannel experience pays, with customers with the best experiences spending 40% more in the future than those with the worst.
Second, the increasingly sophisticated collection, use and analysis of data means customers expect companies to know who they are, their preferences, and how they’ve interacted with them before.
Third, customers are progressively shifting from a desire to spend money on goods to a desire to spend money on experiences. In fact, customers increasingly seek out ‘experiential’ interactions where the journey of engaging with the brand is a pleasure in itself.
How to succeed
But how can businesses meet these expectations? Successful personalisation requires three key ingredients: brands need to have thought about who their customers are, have the right data to support this thinking, and take action to tailor experiences based on that data.
However, it is no longer enough to know who a customer is and what they have previously purchased. The key to success is access to customer experience feedback data, such as data collected from surveys, social media, and customer conversations. Feedback plays an important role in individualising experiences by enabling even large organisations to listen to a customer, know them as an individual across multiple interactions, and create powerful emotional experiences.
Indeed, Medallia research revealed that companies that integrate customer feedback from four or more channels have Net Promoter Scores (NPS) that are 14 points higher than those that use only one channel.
By engaging in a dialogue with customers, brands empower consumers – their most valuable asset – with a voice that informs product, services, and customer experience decisions. One of the most powerful ways of doing this is through ‘closing the loop’, where an employee reaches out to a customer in response to feedback. Medallia’s research found that companies that do this have significantly higher customer experience scores than those that don’t.
At Apple, store managers call every detractor within 24 hours in order to fix the issue or learn from their experience. A study found that this dialogue pays off. Every hour spent calling detractors generates more than $1,000 (£705) in customer lifetime revenue or, a total of $25m (£17m) in additional sales every year at Apple.
Understand your customers, personalise experiences and drive success
The retail sector faces many challenges – most notably how to keep today’s customers engaged. As demands and requirements change it is more important than ever that retailers have their eyes and ears open to what their customers want and adapt processes to meet them.
This is what personalisation is all about. It centres around seeing the world from the customer’s perspective and creating the experiences they want. In an omnichannel world of freedom and choice, brands must proactively guide their customers through their retail journey, using their feedback enhance their experiences. In a world of uncertainty, this is a guaranteed way of staying ahead.
Medallia’s mission is simple: to create a world where companies are loved by customers and employees alike. Founded in 2001, Medallia has offices in Silicon Valley, New York, London, Paris, Sydney, Buenos Aires, and Tel Aviv.
