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Stress-Free Christmas – Mission Impossible?

Belinda GerdtChristmas is right around the corner and the tasks on the to-do list keep on piling up – both at home and in the office. The windows in the advent calendar are running out, which will cause panic even for the most experienced Christmas enthusiasts. How can I do all this on time? Christmas preparations are more or less like a giant puzzle – even if you plan to spend the Holidays on the road.

For the consumer business, Christmas seems to come by surprise as well. The long lines and slow customer service astonish us year after year. The very idea of Christmas shopping in a winter jacket will make you sweat. That’s why many people have started to use e-commerce for all their Holiday shopping needs. That’s not always good news for the Christmas Shopping Survey (in Finnish) published by the Finnish Commerce Federation. For instance, only three out of ten of the most popular fashion online stores increase the revenue of Finnish companies; everything else flows into the pockets of foreign businesses. According to the Finnish consumers, foreign e-commerce companies offer not only better selection of items but also better customer experience.

One could simply state that customer satisfaction is being born as a result of the interaction between the customer and the company. Customer experience is the end result of the entire value chain the customer has to go through, when she is doing business with the company. The value chain has changed; it no longer is the same as it used to be during the Industrial Age, when manufacturing, logistics and distribution were the most crucial processes. We’ve made a transition to the service economy, where the consumers demand personal and customized service. Have the value-adding processes changed to meet the needs of the customer? In many cases, they haven’t changed enough.

When it comes to customer experience, we get stuck too often in the dilemma of service. Is the service we provide good or bad? How and where should we offer our services? Customer experience should be analyzed more broadly.

Different customers appreciate different things. For some of us, self-service is the most convenient way to be served, as for others it may be a showstopper. Some customers expect personal contact, yet most take the process as far as they can online by themselves. The amount of data increases all the time and now we have to be able to analyze it and make an effort to create customer understanding.

All the various service channels should be integrated as one. The consumer can make swift transitions between different units and service channels, but unfortunately the same rarely applies to service tickets and customer information. When the right foot doesn’t know what the left is doing, things will go terribly wrong. In commerce, we need to integrate the brick-and-mortar business with e-commerce as well as digitalize the traditional brick-and-mortar service. We’re just taking our first steps on this path.

Consumers want to be served wherever they are. Reactive customer service is no longer enough if the customer has a problem. Proactive listening is needed. The company should be able to predict customer intentions and think a few steps ahead. Besides the phone, various other service channels are needed. Over 90 % of all customer service in Finland is still done by phone. However, over 65 % of Finnish customers would like to get service in digital channels (Gartner 2014).

Everyone is in charge of creating an outstanding customer experience: customers have no respect for organizational hierarchies. Every encounter with the customer is customer service, even if the sign on your door doesn’t say Customer Service. Digitalization calls for a big change in our service culture. Sweating in line is not very tempting, even though a beautiful smile and helpful professional would be waiting for you at the cash register. The processes have to be developed further as well.

Efficient information systems can help to make the business profitable and streamline the customer service processes so that they are reasonable for both the customer and the company. When we raise the bar for customer experience, it will be faster and easier for the customers to do business. Maybe this will lead to a less stressful Christmas?

Belinda is in charge of the CRM and ERP solutions at Microsoft Finland. Before joining Microsoft, she worked in marketing communications and held management positions in various technology companies. Belinda is passionate about good wine and food as well as the digitalization of business and marketing.

You can follow Belinda on Twitter and connect with her on LinkedIn. Read more about outstanding customer experiences: wowpalvelua.wordpress.com (in Finnish).

Engaging E-Commerce for Loyal Customers

It’s expensive to acquire new customers. According to Forrester, actually five times more expensive than retaining your old customers. Also the likelihood of selling to an old customer is many times higher compared to all new customers, says Marketing Metrics, and Gartner boldly states that 80 percent of a company’s future revenue will come from just 20 percent of existing customers. A loyal customer seems to really give you more bang for the buck.

In e-commerce, determinedly building customer loyalty is an efficient way of fighting against the challenging price competition. The mighty and great Amazon is almost always mentioned as an example of a successful e-commerce retailer, yet it seems that the popularity and massive volumes of Amazon are after all based only on wide selection and cheap prices. Will the customers remain loyal if Amazon someday decides to raise the product prices in hopes of better profitability? Zappos, an online shoe and clothing shop and now a subsidiary of Amazon, has taken a different approach: 75 percent of Zappos’s daily sales is generated from repeat customers (Forbes). Why? Because Zappos’s customer service is legendary for their insanely long customer phone calls and customer service representatives who are willing to do almost anything to make the customer happy.

Customer loyalty in e-commerce is nothing new. Already in 2002 researchers presented eight factors, the 8 C’s, which have a significant impact on e-commerce customer loyalty in an article published in Journal of Retailing:

  • Customization. The ability of an e-retailer to tailor products, services, and the transactional environment to individual customers. Customers want products and services targeted for their own needs and preferences.
  • Contact interactivity. The dynamic nature of the engagement that occurs between an e-retailer and its customers through the web site. The speed and quality of customer service and the possibility to have a discussion with a human affect customer loyalty.
  • Cultivation. The extent to which an e-retailer provides relevant information and incentives to its customers in order to extend the breadth and depth of their purchases over time.
  • Care. The attention that an e-retailer pays to all the pre- and postpurchase customer interface activities designed to facilitate both immediate transactions and long-term customer relationships. You can’t leave the customer alone; active customer communications is the key.
  • Community. An online social entity comprised of existing and potential customers that is organized and maintained by an e-retailer to facilitate the exchange of opinions and information regarding offered products and services. Word-of-mouth and customers sharing their authentic experiences and ratings increase credibility and loyalty.
  • Choice. An e-retailer is typically able to offer a wider range of product categories and a greater variety of products within any given category. The products don’t have to be in e-retailer’s own stock, but they can be delivered directly from partner’s stock which decreases the risk e-retailer has to take.
  • Convenience. The extent to which a customer feels that the web site is simple, intuitive and user friendly. Shopping experience should be so easy that it requires as little effort as possible from the customer.
  • Character. Creative website design can help an e-retailer build a positive reputation, brand image and characterization for itself and to stand out from competitors.

One of the latest trends in e-commerce is to use game elements in boosting customer loyalty and engagement. Game elements are usually incorporated in the loyalty program of the online store. Naturally customers should be rewarded for buying, but also for regular visits, social media shares, recommendations and product ratings, just to mention a few. A good example of successful e-commerce gamification is the online clothing store Gilt and their loyalty program Insider which is based on a simple model of using points. Gilt’s flash sales concept based on limited product quantities and time-constrained sales reminds a lot of a game itself, so it’s no wonder they’ve decided to use gamified elements in their loyalty program.

In addition to engaging customers, gamification can be used to influence customer behavior in all parts of the e-commerce sales process starting from promoting online presence and marketing (check the image). Game elements can be used, for example, to encourage customers to fill in their customer information which in the long run will increase customer understanding significantly. In marketing, games and gamification have already been in wide use for a long time; check out, how advertisers gamified their marketing campaigns in this year’s Super Bowl.

Gamification in E-commerce

Online stores shouldn’t always be the cheapest options automatically since the customer value can also be created for example as better service, easy and fun shopping experience and engaging customer loyalty program. The rise of e-commerce in no way diminishes the importance of loyal customers, but customer loyalty is generated both in “brick” and in “click” in human encounters. Even e-commerce is all about people.

Retailers of all kinds can build lasting relationships with customers, both on and offline, by recognizing that the human brand experience they provide customers is even more critical than the products and services they offer. (Chris Malone)