Most customers don’t give retailers the chance to fix an unsatisfactory experience. Only about 1 in 25 unhappy customers complain directly to the retailer. The rest say nothing. They just stop buying from that outlet. Compounding this problem is the fact that about 13% of unhappy customers will share their complaint with 15 or more people, according to research quoted by Steven MacDonald. This multiplier effect shows that you need to get fewer dissatisfied customers as a top priority.
It may seem counter-intuitive, but retailers should welcome the irate shopper who vents her frustration in an animated scene on the sales floor. That’s because it’s the mistreated customer who walks out the door in a silent huff who places the most revenue at risk, according to a collaborative study of dysfunctional retail touchpoints conducted by LoyaltyOne and Verde Group with Professor of Marketing and Psychology, Dr. Deborah Small, at the Wharton School of the University of Pennsylvania.
Aim for fewer dissatisfied customers
Half of US consumers had problems from their last shopping trip
The survey showed about half of 2,500 US consumers polled reported experiencing a problem on their last shopping trip. Of those customers, 81% decided not to contact the retailer about the issue. Among these silent shoppers, 32% said they were unlikely to recommend the retailer to friends and family, putting these shoppers at-risk of decreasing their spend with the retailer.
By comparison, the study showed that shoppers who did notify retailers of their poor experience and had their problem completely resolved were 84% less likely than silent shoppers to reduce their future spend.
“The results are a resounding confirmation that poor customer experiences have a considerable negative impact on shopper spend and attrition which can run into the billions,” said Dennis Armbruster, LoyaltyOne Consulting Vice President and Managing Partner. “We’re ushering in a new era of customer experience measurement vital to retailers looking to make even more informed decisions.”
The difference between customer experience and customer service
Customer service is not the same as customer experience. Customer experience (also known as CX) is defined by the interactions and experiences your customer has with your business throughout the entire customer journey, from first contact to becoming a happy and loyal customer. Customer service is just one part of the customer journey, focusing on human interaction and directly supporting customers.
Customer experience includes three main components:
- Customer service. This includes customer support, customer success, and self-service support — the points at which your customer interacts with your team.
- Technology. This is the product itself — how it works and the interactivity points.
- Design. This is the brand touchpoint — the marketing, the design, and the feelings your brand creates for your customer.
While those three areas are quite distinct, there are no hard lines between them. All of the pieces combine and work together to make up the customer experience.
Customer service is reactive, whereas customer experience is proactive. When you are reactive to your customers, you’re not preventing disasters from occurring, you are simply fixing what needs to be fixed once it has taken place. When you are proactive with your customers, it’s taking the time to analyze what issues may potentially arise and stopping them from taking place before they do. With customer experience, the business’ objective is to provide customers with a better overall experience, which leads to happier customers.
Customer service examples
Customer service ranges from how quickly your brand responds to someone on Facebook messenger (and what your brands says to them), all the way down to a customer wanting to return an item (and you respond to that situation). Here are some examples of customer service:
- Facebook messenger responses (either by a customer service team or set up with logic and AI through a messenger bot).
- Instagram direct message responses
- Instagram comment responses
- Paid social media responses
- Site chat bot responses
- Email responses of any sort
- In-store associates, and how they interact with customers and potential customers
- The returns process, and how a team interacts with customers going through that process
This is just a short list. Essentially, any time a customer or potential customer is getting in touch with your brand and asking a question or looking to accomplish a task, customer service kicks in.
Customer experience examples
Good customer experience also includes good site design and user flow, as well as good physical retail layout and flow. Customer experience also includes any:
- Email nurture streams you send: the content as well as the flow
- How you build out your returns process: Is it easy or is it difficult to return an item
- What your shipping policy is: Does it get there quickly, is there free shipping, so on and so forth
- How you package your goods: Branded packaging? Is there a return slip included? Are there instructions?
Customer experience is the overall strategy designed by your brand to give customers an experience that aligns with your branding strategy.
So, why is all of this so important? Great question!
Retailers should take note of the importance in identifying specific customer experiences most damaging to customer loyalty as billions of dollars are at risk.
Insight on the effects of poor customer touch points can help retailers reduce the risk of negative customer experiences, while also enabling them to proactively design experiences that positively influence spend, visit frequency and basket size,” said Paula Courtney, President of Verde Group.
The survey also revealed that big spenders within a category disproportionately experience certain problems:
- Mass retail “check out” risk: Shoppers frustrated by check out wait times reported spending 23% more than the average mass retail customer ($545 vs. $446 a quarter)
- Department stores “not-my-department” staff attitude: Shoppers troubled by an associate’s not-my-department attitude reported spending twice as much as the average department store customer ($543 vs. $261 a quarter)
- Apparel retailers “ship date”: Particularly in their online channel, customers who cited their inability to obtain a specific date or time to receive an online order reported spending 66% more in the category ($416 vs. $250 a quarter)
“In a very robust platform, these partners have taken the psychology of shopping and married it with the economics of shopping. Insights around the impact of the silent customer could prove to be valuable tools for retailers looking to minimize the risk of attrition created from weak customer experiences,” said Professor Deborah Small, from The Wharton School of the University of Pennsylvania. This would be helpful to reduce your number of dissatisfied customers.
Shoppers won’t confront the retailer directly
Why don’t shoppers confront the retailer directly? “If they were really angry, they would complain to management during the store visit or maybe after, but they don’t do that very often,” said Wharton Marketing Professor, Stephen Hoch. “Some people think it’s going to happen again and they can’t do anything about it. They are resigned to it. But the main reason they don’t complain is it’s too time consuming to get it fixed.”
Indeed, the survey showed that 46% of those who had a problem expect they would definitely or probably experience the same problem in future.
Get fewer dissatisfied customers and boost business results
Retailers have historically paid a lot of attention to how to satisfy the customer, but have not done much work on what makes them dissatisfied. In retail, it’s hard to focus on the dissatisfied because most customers are anonymous, unlike direct marketing or a business-to-business relationship. And retailers are reluctant to ask customers their views on what they do wrong because the fear they may be stirring up negative thoughts.
But how do you get retailers to find ways to get customers to bring complaints effectively? We are all very familiar with experiences we have had in trying to get through by telephone to a live person in many organizations. Writing a letter is time consuming. What about the company website? And what about consumer review sites like Epinions, Trip Advisor etc?
If all else fails, social media is at hand.
Further reading to enable you to get fewer dissatisfied customers
You can read more about creating more customer satisfaction in my article,”How to communicate value to customers.” In addition, here are some excellent tips on responding online to angry customers and to build a good customer experience: