Next Generation Retail Customer Feedback Management

Retail Customer-Centricity

Without a doubt, we live in one of the most customer-centric eras in the history of retail. The paramount importance of measuring the retail customer experience is widely understood, and strategies and tactics for how to do it best are on the lips of every self-styled guru or evangelist, in the pages of every how-to book, in the keynotes of every seminar or conference speaker, and in the words of every blog dedicated to dissecting the optimization of the customer experience.

The injection of the ethic of customer centricity into the processes and procedures of 21st century retail life has certainly been a good thing. Retailers have become more progressive, more responsive, and, ultimately, more attuned to the wants and needs of their customers. They have understood that their customers are their most precious assets and they have invested in programs designed to engender long-term loyalty and purchasing commitment. Many have even tied measurement of the customer experience into performance and compensation calculations. A survey of over 140 large North American companies conducted in the early part of 2010 discovered that 60% of these companies were running formalized VoC programs, and, of these, 45% were linking compensation directly to patterns in customer feedback scoring¹.

Vendors have been quick to respond by providing myriad retail Customer Feedback Management solutions, all of which are engineered to capture in-store customer experience data (typically using some variety of multi-modal survey architecture) and to break this data down using advanced reporting and analytical tools, with the goal of extracting valuable customer insight.

With the rapid and broad-based proliferation of these solutions, the retailer who is looking to invest in a Customer Feedback Management program faces abundance—some might say a of the current marketplace reveals a broad spectrum of tools for capturing and reporting on customer feedback, ranging from complex enterprise feedback management software packages to simple, do-it-yourself online survey authoring tools.

As a result, retail customer feedback collection has largely become commoditized, and merely being able to capture and report on customer feedback relating to a specific experience is no longer a mark of merit or differentiation among vendors.

Instead, the focus has shifted to vendors who can deliver timely customer insight emerged: the ability to rapidly identify actionable pieces of customer feedback and convey this information back to key internal stakeholders so that they can take action to remedy or rectify customer complaints.

The New Retail Shopper

The fact that timeliness has emerged as the single most crucial factor in a customer feedback program is due in large part to the changing nature of the retail customer. Largely devoid of the long-
term brand devotion that characterized prior generations of shoppers, this generation of retail shoppers is known shopping options, today’s retail shopper is always looking peripherally for the next opportunity to switch and save. One recent study suggests that as many as 41% of retail shoppers switch primary retailers within a 12-month period².

Part of this is due to digital technology and the disruptive extent to which web-enabled devices have spawned a generation of instrumented shoppers who are permanently tethered to a universe of real customer ratings and reviews. Indeed, 78% of the wired US population admits to doing at least occasional online research into products and services prior to a purchase³.

At the same time, today’s retail customer is fully conversational and utilizes social media platforms like Facebook, Twitter, and YouTube to broadcast both praise and scorn, depending on the quality of their experiences with brands or products. This unprecedented, unfiltred stream of customer opinions has sharply amplified both the scope and the power if word-of-mouth.

In the pre-digital era, the power of word of mouth, though formidable, was constrained by what anthropologists call Dunbar’s number4. Dunbar’s number posited a relatively low limit to the number of people with whom a person could maintain a stable relationship and over whom a person could reasonably be said to exercise influence.

But that upper bound applied to an analog environment. In the digital century, a disparaging or laudatory exclamation on a social media platform could be read by an audience of tens of thousands of people in markets both domestic and global, while viral videos viewed by millions have the power to decimate credibility and permanently scar the face of a brand.

When we consider that word of mouth is the deciding factor in as many as half of all retail purchasing decisions5, we understand the devastating impact that negative customer feedback can have on a retailer.

The blending of brand agnosticism with a predilection for spontaneous, viral outbursts on social media platforms is what makes today’s retail customer far more challenging to retain than the retail customer of the pre-digital era.

And it means that retail customer feedback must be treated with a heightened sense of urgency. If we think of each piece of negative customer feedback as a final warning cry before permanent defection or as fair warning of intent to spread negative word-of-mouth through social channels, then it becomes critically important that feedback data gets into the hands of someone who can act on it.

Where Standard Methods Fail

Facing a retail customer who is both hyper-informed and highly conversational, today’s retailer leans on its customer experience measurement program and hopes that this program will serve up the actionable bits of customer feedback that it so desperately needs. Unfortunately, that is where things fall apart.

Most retail Customer Feedback Management programs that exist today excel at collecting and reporting on data. These applications do a wonderful job of capturing, aggregating, and reporting on customer experience data, and some are even accompanied by real human analytical muscle, which enables deep and complex interpretational inferences and conclusions.

But as strong as they are at capturing and reporting, most VoC applications fail when it comes to operationalizing that data and using it to transform their existing processes. Quite simply, they perform poorly when it comes to the mission critical task of funneling pressing feedback back to the right people within an organization and empowering those people to act rapidly to resolve store-level pain points.

Perhaps this is why voice of the customer programs often fail to change company processes in a real and meaningful ways, particularly at larger companies. Indeed, research has suggested that voice of the customer programs rarely achieve their promised transformational effect and that the bulk of corporate customer experience efforts end up languishing at relatively low levels of maturity6.

Customer feedback is not unlike a highly radioactive element; it is something whose value decays incredibly quickly if it is not auctioned in close proximity to the actual experience. No matter how visually appealing the reporting engine, no matter how profound and insightful the deep dive analysis, and no matter how elaborate the modeling and statistical gymnastics, customer feedback programs prove their value if, and only if, they can deliver timely and actionable feedback to the right people. Regrettably, vendors often lose sight of this all-important fact when they engineer their solutions.

By subsuming customer feedback into standardized temporal buckets within their reporting tools (weeks, months, quarters), they lessen the impact of the data by dissociating it from the moment of experience. And, by constructing dashboards and scorecards aimed clearly at head office or corporate personnelm the vendors ensure that the data bypasses store-level staff — the very people who are poised to act at the moment of experience.

Customer Feedback Evolved

For retailers to respond quickly and cogently to customers in crisis, they need to have systems in place that transmit real- time feedback to store-level personnel, so that those employees can act immediately to remedy customer complaints and capitalize on opportunities to engender advocacy.

Leger Metrics has developed a timely, precise, and role-based feedback reporting system that not only delivers KPIs to marketers and executives, but also puts the voice of the customer front and center for regional and store-level management.

When Leger Metrics collects customer feedback data in a retail location, it utilizes an advanced analytics engine to parse the data and identify potential problem spots. Once these priority pieces of feedback are identified, Leger Metrics uses its proprietary reporting technology to send real-time alerts to store-level personnel. In doing so, Leger Metrics completely eliminates the time lag that traditionally has existed between the moment a customer provides feedback on an in-store experience and the moment that feedback is actually actioned.

Taking meaningful action close to the moment of experience drastically reduces the chances that an isolated event can grow into a long-term negative stance against the brand. Knowing that, Leger Metrics has engineered its customer feedback measurement solutions to be able to trace root cause resolution down to the department, sub-department, or even employee levels. With ready access to time-sensitive data, store-level personnel can take action to perform rapid-fire customer service when things go awry and move to capitalize on positive experiences by positioning targeted up- sells and cross-sells.

Furthermore, Leger Metrics has loaded its push reporting technology with intuitive, powerful, and precise tools, each of which is design to make understanding and acting on feedback as simple and straightforward as possible for those whose jobs revolve around taking care of customers. This allows for intelligent mobilization of different personnel tiers to habbdle different situations. To rectify a problem with store wide ambiance, the concerted efforts of all in-store staff might be required. But rude service from a single employee in an isolated department will, by its very nature, require a more precise and surgical handling. Intelligent, role- based reporting is the only system that truly facilitates that.

Reacting to customer dissatisfaction means stressing rapid-fire accountability at every level of the retail pyramid—a chain of transparency and meaningful action that cascades from senior management all the way down to the individual employee level.

Fully cognizant of that, Leger Metrics has engineered its retail Customer Feedback Management solutions to empower retailers with the fastest, most precise, and most actionable customer intelligence.

Sources

1 The Temkin Group. “The Current State Of Customer Experience.”

2 IBM Institute For Business Value. “Meeting the demands of the smarter consumer.”

3 Pew Research Center’s Internet & American Life Project. “Online Product Research”

4 “Dunbar’s Number.” 

5 McKinsey & Company. “A new way to measure word-of-mouth marketing.”

6 The Temkin Group. “New Report: The State Of Voice Of The Customer Programs.”

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