Before you headed to bed on the evening before any holiday this year, your iPhone probably asked you if you would like to disable your morning alarm in case you would be observing the holiday and enjoying a late morning. It sounds silly, but this action perhaps brought you great satisfaction – even though you knew it was just an algorithm prompting the message.
Distant anonymity between businesses and their customers is a thing of the past, and for a good reason. Consumers want to work with brands that have their back and make them feel valued. This kind of customer-centric practice is essential for a business in today’s market. After all, technology ought to make our lives better, right?
What are Customer-Centric Practices?
Customer-centric practices place the experience and benefit of customers before all else.
In the retail industry, they build customer loyalty and satisfaction by fostering an ongoing positive customer experience throughout every moment of engagement – for example, from entering a store to checking out. Companies that follow a customer-centric approach prioritize the customer over their revenue model. However, if implemented correctly, a customer-centric approach provides higher returns than alternative business models.
Implementing Customer-Centric Practices in Retail
In order to meet the demand of consumers, companies and brands across the globe have had to rethink their platforms and leverage customer-centric practices.
In the retail sector, this used to mean using simple tools like paper punch cards for repeat customers, but today the vast majority of customers prefer to see businesses harnessing technology to streamline and make better use of loyalty programs: “Users need to be able to engage and monitor their experience via a mobile device. Paper cards are no longer appropriate.” So, what steps can retailers take?
#1 – Use Technology to Promote the Customer Experience
Customer-centric practices in retail often refer to implementing new technologies that provide excellent customer service; the goal is to create a company culture where customer-centric practices are at the core of the company.
In his recent Hubspot article, Ben Johnson provides a strong example of such thinking. He explains that the company Proof prioritizes being “customer-obsessed,” which simply means that if a new tech feature does not improve their customers’ experiences, they drop it and spend their energy pursuing tech that does foster better relationships with customers.
By utilizing effective technologies such as Ombori Grid, for example, some companies have been able to adapt to the fast changes witnessed in the retail sector, improving the customer experience. Ombori Grid’s versatile applications in a retail store can enhance various customer experiences:
- Interactive digital signage and guided selling tools inspire and inform customers.
- Online ordering and endless aisle options help visitors find what they want.
- Queue systems and self-checkouts reduce wait times in store.
- An omnichannel presence promotes customer engagement.
- Alternative shopping options, such as BOPIS, offer consumers more flexibility and personalization.
As a result of these customer-centric practices, visitors are likely to feel that the retailer has genuinely invested in offering them a quality experience. The end result will improve revenue due to the increased likelihood of customers revisiting the store, spending more, referring others to the store, and reducing the stress on customer service teams.
#2 – Calculate and Track Churn Rate
The data has spoken: The cost of acquiring new customers can be up to five times the cost of retaining existing customers.
In fact, customer retention is so important that a 2 percent increase in customer retention has the same impact on profits as cutting costs by 10 percent! Unfortunately, that’s easier said than done: on average, most companies lose approximately 10 percent of their customer base each year. Because this metric is so impactful, retailers who focus on calculating and tracking the number of customers who leave as opposed to those who stay can make meaningful improvements and improve their profitability. This is called tracking the churn rate
.Churn rate “is a business metric that calculates the number of customers who leave a product over a given period of time, divided by total remaining customers.” It “is a direct reflection of the value of the product and features that you’re offering to customers.” In order to promote a customer-centric mindset, retailers must focus on their churn rate and implement concepts that improve customer retention rate. Improved relationships with customers mean better retention, and some methods to achieving this include:
- Ensuring your brand offers knowledgeable customer support and that agents are readily available and empathetic to the customers’ problems.
- Offering self-service channels with accessible, useful information to empower customers to resolve their own problems.
- Promoting customer loyalty by offering meaningful rewards for shopping.
These steps are a strong, actionable start. Keep on asking yourself what makes a smoother experience, and create that for your customers.
#3 – Collect Customer Feedback
A successful brand is always looking for a way to improve, and the number one way to achieve maximum growth is by collecting customer feedback and implementing changes based on consumer responses.
However, collecting customer feedback has the additional benefit of being truly customer-centric because it sends customers an important message: we value your input. Everyone wants to be heard, and a company that actually adapts its practices according to needs that customers express will reap the benefits.
Benefits of Customer-Centric Practices
There is no question that brands and companies who adopt the customer-centric approach will see the financial return for their efforts. If that sounds like more work than it’s worth, here’s the research to back the claim:
- Customer-centric companies are 60% more profitable than companies that don’t focus on customers.
- 84% of companies that work to improve their customer experience report an increase in their revenue.
- 96% of customers say customer service is important in their choice of loyalty to a brand.
- American consumers will pay 17% more to purchase from a company with a reputation for great service.
- 68% of customers say the service representative is key to a positive service experience.
- 77% of consumers view brands more favorably if they seek out and apply customer feedback.
- Companies that earn $1 billion a year will see an average gain of $700 million within three years of investing in customer experience.
- Customers are likely to spend 140% more after a positive experience than customers who report negative experiences.
- The top reason customers switch brands is because they feel unappreciated.
It isn’t complicated when you get down to it: any good salesperson or teacher, waiter or doctor, store manager, or car mechanic can tell you that customer loyalty comes down to relationships. When customers feel listened to, empowered, and invested in, they come back. When they feel brushed off or unimportant, they don’t.
By harnessing technology to give customers as many ways as possible to interact with your brand, and by asking yourself every day if the choices you’re making benefit your customers, you can genuinely foster strong relationships and customer-centric practices.