News flash: the traditional marketing mix is dying, consumers are desensitized to price wars and product differentiation has shrunk. While it seems brands have become powerless in today’s saturated marketplace and there is nothing left to compete on, retailers do have the ability to control one thing – the customer experience.
The customer experience is indeed the last battleground for retailers. Research into customer behavior has added weight to the idea that a positive customer experience is the number one driver of both new and repeat business, influencing as many as 80 percent of all purchasing decisions. A positive brand experience results in increased loyalty, which in retail terms means increased frequency, higher transaction values, more willingness to forgive mistakes and positive word-of-mouth.
On the flip side, when a customer has an unsatisfying shopping experience and retailers don’t have recovery measures in place, brand allegiances are severed and negative financial implications ensue. According to research conducted by Leger Metrics, two in five consumers (on average) will have a negative experience with a retailer. This can occur due to a number of irritants such as poor service, unhelpful associates or long lines at the register.
Brands that understand consumer perceptions and react more quickly to address irritants can reduce the risk of permanent customer defection, which in turn will positively impact sales and shape public opinion. Third party referrals continue to play a big role in the consumer’s path to purchase with 53 percent of shoppers admitting that a negative online post has influenced their decision on whether or not to conduct business with a retailer. Now, that’s a tough stat to swallow for any retailer.
Voice of the Customer (VoC) technology offers retailers the ability to measure interactions between employees and customers and track transaction outcomes as it relates to the quality of service. Retailers who possess the analytical dexterity to understand the correlation between financials and customer satisfaction will ultimately have the upper hand on the battlefield.