Customer Eperience A guide to building greater customer loyalty
Customer Eperience: Defined Customer Eperience is the entirety of a company s interactions with consumers across all touch points during the complete purchase cycle from consideration to postpurchase. Effective Customer Eperience creates a persona around the brand with clear traits that will engage consumers beyond the transaction In mature markets the prospect for future growth is limited, so retailers are in the business of acquiring and retaining customers. Simply put, market share is everything. In this contet, customer loyalty is key and will only be achieved by delivering eceptional customer eperience. In this miniguide, we share what we, in Kurt Salmon, believe are the key steps to delivering improved customer eperience and, therefore, improved sales and profit in the digital age. You ll find a: n brief overview of the state of customer eperience within UK retailing today n threestep guide to driving loyalty through customer eperience, including n selfassessment of your current capabilities and readiness
The Current State of UK Retailing Most retailers are pursuing the The Customer Eperience Challenge Level of Customer Eperience 3 multichannel Most retailers today opportunity but are damaging their brand by letting consumers down when it comes to delivering customer eperience. 0 In store At home On the move Level of Multichannel Integration 3 Retailers need to pursue both simultaneously. Over the past decade the definitions of customer eperience and multichannel have broadened and become inetricably linked. What is emerging is the importance of creating an addictive, irresistible shopping eperience from preshopping anticipation to after sales service regardless of whether customers are shopping whilst they work, rest or play in store, online, at home or using their mobile while on the move. Many UK retailers are in the process of epanding their multichannel offer, however, the customer eperience element is not maintaining pace with channel epansion. But why are some retailers proving more successful at reaching today s increasingly elusive and demanding consumers, while others miss the mark entirely? The challenges are significant, but the solutions to deliver an irresistible customer eperience already eist. The big question facing retailers is: How do you eat the elephant?. And the answer is: One bite at a time.
Step 1: Define your Starting Position Here are some key questions that will aid you in defining how ready your business is to improve the loyalty of your customers and capitalise on the opportunities associated with customer eperience. The results of this assessment will help your business begin to divide the challenge required to deliver higher levels of customer loyalty than your competitors, into bitesize chunks. Customer Eperience Assessment Is the issue of improving customer eperience generally considered to be important to the future success of your business? Does your business have one person responsible and accountable for delivering the necessary improvements to a defined customer eperience? Does your business have a clearly articulated customer eperience strategy and operating model in place? Does your business have the necessary resources in place to improve customer eperience? Do you have the facilities to gather feedback from your customers for each of your channels and customer engagement points? Yes No
Customer Eperience Assessment Yes No Does your business use this feedback to continually improve the customer eperience? Do you have a single repository of customer information spanning ALL channels in which you operate? Does your supply chain fulfil the needs of your approach to customer eperience and multichannel retailing Are you anticipating the rapid takeup of new technologies and services e.g. mobile payments? Is your business fully embracing the opportunities associated with social networks e.g. commerce generated through Facebook? Are you etending your customer reach internationally through digital channels? If you would like to assess how your answers to these questions compare with other retailers in the market, and your sector specifically, call Richard Traish on 020 7710 5200
Step 2: Create your Customer Eperience Strategy Business Strategy Target customer Value proposition Demographics Attitudes Behaviours Price Quality Range Customer Eperience A retail business strategy has always encompassed two key elements: value proposition and target customers, i.e. what a retailer offers and to whom. But to ensure your business enjoys higher levels of loyalty than your competition, a third element is required: a customer eperience strategy. A customer eperience strategy defines how a company should interact with consumers across all channels. It should translate a company s brand vision and offer into a coordinated crosschannel message to the consumer.
Key components to a customer eperience strategy should include: n Points of customer contact: how and where will the business interact and engage with customers? n Messaging: what brand building messages should the target customer receive and share with their own networks? n Consistency: how do you ensure customer eperience is consistent across all shopping channels? n Conversion: how do you maimise consumer driven growth and identify brand etension opportunities? In addition to the questionnaire, Kurt Salmon conducts regular benchmark assessments of leading retailers multichannel functionality to determine : n whether they are eploiting every opportunity to reach their customers n how well they convert online browsers into shoppers These assessments highlight each retailers strengths and weaknesses and can be used to benchmark their approach against their closest competitors. Defining the right customer eperience strategy will vary by retailer and their customers requirements. Once determined, the net step is to define the operating model.
Step 3: Determine your Operating Model The Kurt Salmon Operating Model opposite translates the customer eperience strategy into the detailed activities and associated Key Performance Indicators (KPIs) required to drive greater loyalty than the competition. Key elements should include: n Customer Data: Gathering data from each customer interaction whether the customer is instore or on the move, into a single customer database n Customer Intelligence Framework: The effective use of your customer data involves translating data into genuine insight. These should reflect the KPIs that identify the success of your customer eperience strategy e.g. loyalty. This is also where genuine insight should be used to develop tactics to grow ever closer customer relationships that will deliver industry leading sales and profit n Customer Eperience Delivery: Integrating the brand, the value chain and a customer engagement programme (increase traffic, conversion, basket size) within a single, eecutable, strategy n Brand Engagement: Creating a holistic and addictive eperience from anticipation to shopping and buying and final consumption n Value Chain Control: Integrating the control of a company s entire value chain from creation through to point of sale for maimum delivery on the brand promise
Customer Data In Store At Home (Online) On the move (Mobile) Single Customer Database Interrogation & Interpretation Value Chain Control Brand Engagement Engagement Dashboard & Tactics Customer Intelligence Framework In Store At Home On the move Customer Eperience Delivery
Kurt Salmon: Operational Epertise Kurt Salmon has been working eclusively with retailers and their suppliers for more than 75 years, supporting them both strategically and operationally. Currently, business leaders are seeking our advice to help make sense of a rapidlychanging environment when the roadmap to success is not clear. How to eat the elephant We hope we ve provided some answers to the challenge associated with eating the elephant. Shown here are some eamples of the Kurt Salmon analytical toolkit to help benchmark retailers performance. We would be delighted to continue this discussion with your business and to provide a Quick Scan to establish your readiness and capability to capitalise on loyalty and customer eperience. Multichannel Benchmark Toolkit eample (R)etailer LEVI S Sainsbury s Social Nordstrom CLARKS WORLD DUTY FREE ArgosGAP MACY SNIKE HOMEBASE CARREFOUR BURBERRY Mothercare Digital AEON PUMA Store / Cross Channel Adidas Feature Customer reviews/ratings Interface on Facebook Basic Content (videos, posts, event listings) Product Links Product Catalogue Shop without checkout Shop with checkout Must 'Like' to unlock content Design input (UGC) Loyalty programs Events/Competitions Youtube Channel Twitter Account More/Other Social Media Links Mailing List Entry on Website/Data Capturing Internet Shopping Deal of the Day Availability Checker "Look Shopping" Customized Product Suggestions Online Eclusives Wish List Running Total Shopping Cart Running Total Shopping Cart With Shipping Included Quick Checkout Online Gift Card Redemption Order Tracking Free Home Delivery Ab er Ba crom na b Bo na ie & d Re F Bu en pub i tc h l ic rb Ca erry th Esp Ki d r sto Fo it n re Ha ver 2 lle 1 H& nste M ins Jac k Th Wil e ls Lo Koo uis ple M Vu s iss i tt M& Self on S ridg Ne e t Oa sis Ri v e Ru r Isla gb n Su y R d it alp Ta Supp h La rg ly ur en To et p V ic sho t p We ori a t 's W Sea Sec hit l ret Za e S d tu Za ig & ff ra Vo l Some of our clients? We assess each clients customer eperience functionality across the five key multichannel dimensions Social 12.0 10.0 Free Returns Ease of Online Navigation 15 8.0 / Free delivery to local store 5 4 5 4 4 5 4 4 4 4 5 5 4 4 5 5 4 4 5 3 4 4 4 4 3 6.0 Reserve & Collect from store Store Stock Checker OnLine Purchasing Cycle InStore Eperience 4.0 Find it in store Mobile App 2.0 Mobile Coupons 0.0 Mobile epos Mobile Gift Vouchers Instore Web Access Web Enabled POS Contactless Payments Kiosks/Popupshops Virtual Fitting Room (online)/outfit Builder Category Etension Outside of Clothing and Footwear Navigation OnLine CrossChannel Total Score Total Score including ease of navigation 17 18 22 18 23 18 22 14 18 20 25 18 22 16 20 15 19 15 19 17 22 19 24 12 16 22 26 20 25 21 26 15 19 19 23 12 17 21 24 19 23 20 24 21 25 12 20 12 Total Social Score 3 7 9 6 8 8 7 5 6 7 7 8 8 10 8 8 5 9 5 7 9 8 10 6 8 Total Digital Score 7 9 8 8 5 10 9 7 6 6 9 8 3 9 9 9 8 9 7 11 7 8 10 7 8 Total Store / Cross Channel Score 2 2 2 4 2 2 2 4 3 2 1 3 2 4 4 5 2 1 0 4 4 4 1 0 4 Average Best in Class 4 17 8 7 2
To find out more about the fundamental changes taking place in retail and what businesses can do to remain successful, read The New Rules of Retail coauthored by Kurt Salmon s Michael Dart.
Kurt Salmon 10 Fleet Place, London, EC4M 7RB, United Kingdom T +44 20 7710 5200 F +44 20 7710 5201 www.kurtsalmon.com www.kurtsalmon.com