Smart Retailers Keep the Customers They Have: Loyalty in the Post-Purchase Experience
Modern consumers are less inherently brand loyal than previous generations. The post-purchase experience–shipping, returns, support, and product quality–are increasingly where that loyalty is found.
COVID-19 accelerated trends in digital preferences and consumption, condensing time as it were (e.g. the Metaverse). While it is true that customers are increasingly non-linear in their purchasing decisions and hugely better informed via comparative purchasing data, it is also true that those trends were developing for decades prior.
In many cases, the ‘winners’ were online retailers already surfing those trends, ensuring transparency, delivery, returns, and loyalty programs were customer high points.
Price, which while always important, doesn’t drive purchasing decisions as much as you might think, a trend widened by the pandemic; according to a consumer survey by Convey, “…the top reason respondents shop at Amazon is fast, free shipping (73%), followed by [their loyalty program] (67%)…Best pricing comes in sixth (42%), down seven percentage points from 2020, when it ranked fourth.”
In brief, for one of the world’s largest digital storefronts, investments into the post-purchase experience are king.
That’s smart according to Katharine Biggs, head of global strategic communications at parcelLab, an innovative B2B marketing technology solution that enables brands to build standout post-purchase experiences tailored to their customers by offering Operations Experience Management, a platform that emphasizes post-purchase excellence.
“It’s those brands that kind of go above and beyond and really put the customer at the heart of everything they’re doing… [creating] loyalty,” said Biggs during an interview with RETHINK Retail.
A 2020 report by Gartner drives this point home: “The imperative to drive loyalty has only grown during the COVID-19 pandemic. Customer retention has become more urgent yet more complex as customers respond to the worsening economic climate.”
Working together with parcelLab, RETHINK Retail looks at three focal points any business can hone in on to improve their post-purchase experience.
Frustration Transparency: On Clear Communication when Problems Arise
Frustration Transparency can be understood simply as the ability to see customer problems and respond to them in a timely fashion (or pre-emptively).
Tech sits at the forefront of managing this dimension in particular, reinforcing the broader theme that at every step of the process of improving the post-purchase experience today is the adept implementation of new technologies and processes (which is nothing new).
When it comes to Frustration Transparency, many businesses falter by failing to communicate with purchasers when shipping mishaps occur.
As climate change advances and major supply-chain disruptive climate events increase in frequency, this ability to see shipping delays, anticipate them, and communicate clearly and efficiently with the customer is only going to become more essential:
“56% of consumers want immediate updates if something is delayed and 23% will not order from a retailer again after a negative experience.”
To mitigate this challenge, Biggs stressed the importance for brands to work with a platform that provides enough data transparency for them to see and respond immediately to delays. “Seeing frustrations in your customers as an opportunity to engage with them and actually retain them rather than seeing it as a pain point [or] something to avoid is a much better way to look at it,” Biggs revealed.
It is this communication on (e.g.) shipping issues that can prevent frustrations with your brand that may have little to nothing to do with you: “75% of retailers rely on carriers to recognize and to communicate these delivery delays.
Improving Engagement After Point of Sale: Keeping Customers in Your Corner of the Web
Following their purchasing journey, finding a way to get customers back onto your corner of the internet is critical, said Biggs, and expert consultants can facilitate it.
“What we enable brands to do is host that tracking page in their own ecosystem…they have complete control over also what messaging and what content they’re giving to their customers…[you must know] your customer and not bombard them [with, e.g., email campaigns] as well.”
Speaking to that last point, Biggs explained that there are opportune and inopportune times to market to your customers post-purchase, stressing the importance of knowing what the customer wants and when.
“I think so many brands could be guilty [of overdoing it on marketing emails]…When it’s the morning of delivery, all I want in that email is to say your parcel’s going to be delivered between X and Y time…I don’t want you to try and sell to me then. It’s not the right time.”
This knowing the customer – what is important to them, what they want, and what they care about for your particular brand – is a repeated theme because the focus is all on personalized data as Web3 advances.
Returns Facilitation and Overall Quality of Experience: Defining Post-Purchase Excellence
Establishing a quality returns experience requires that retailers know their customers’ pain points in the returns process (looping back to ‘Frustration Transparency’), but retailers should understand these as opportunities and make a deliberate organization-wide effort to cognitively reframe what is often a dreaded aspect of customer service.
“I think so many [see returns] as a massive pain point, which it is…it is a massive drain on revenue. However, if you flip that and think about it as an opportunity to reengage your customers and potentially reconvert, [it can become] a part of your customer retention strategy [and will] really benefit you,” argues Katharine.
This is where Operations Experience Management (OXM) can come in, a service “born from the recognition that brands need to focus on so much more than just post-purchase experience to stand out,” explains Biggs.
Weltbuild Publishing Group, a major German publisher and media retailer with 98.6 million in global sales in 2019, employed the OXM services at parcelLab upon recognizing that they lost visibility of their customers post-purchase. Via improved, regular and clear automated communications with customers on returns and continually updated Order Status services which tracked orders, the service helped to reduce customer inquiries by 7.5% while decreasing returns by 5% and improving engagement with a 75% email open rate.
Much as Amazon has found significant success in the last two decades via deep investment into their returns process—including their leading transparency initiatives—what this OXM-facilitated transparency and automation did for Weltbuild was signal to their customers that how they felt about their purchasing experience after the point of sale was at least as important as acquiring them as customers in the first place.
On Education: What’s Important to the Modern Consumer Challenges Traditional Wisdom
The lessons above belie a fundamental shift in consumer relations and investment as it relates to one of the most significant (and expensive) investments in retail: acquisitions.
It has traditionally been the case that acquisitions receive a large amount of time, energy, and focus. However, at a time when this has never been more costly, retailers can pivot their strategic planning toward more cost-efficient and stable investments into customer retention.
One of the best ways to do this has long been efficient, targeted, ‘smart’ loyalty programs.
“I’m a huge advocate of loyalty programs. I think they’re a…very cost-efficient way to engage your customers,” notes Biggs.
Indeed, for any business, increasingly advanced data applications in modern loyalty programs are essential to success, data that, for example, testifies to the efficacy of those paid loyalty programs.
Loyalty programs are also a way to reward your brand’s biggest fans by making the love they give to you feel mutual, as is it generally important to show customers that brands care about what they care about, such as sustainability (though what is important to who can vary widely between age groups). From ‘value enhancement’ focused programs to ‘ecosystem centric loyalty programs’ as digital integrations advance, the approaches are myriad.
In general, post-purchase excellence can drive a number of sometimes unexpected benefits related to acquisition. Positive brand experiences drive word-of-mouth recommendations to friends and family, which is increasingly becoming a key marketing channel for retailers.
Additionally, despite frequent analyses that today’s digital consumer is less inherently-loyal than ever, “23% of customers it surveyed reported they would not order from a retailer again after a negative experience.”
However, an important caveat to consider is the behavioral psychology of consumers who already are loyal. According to a report by Nielsen, consumers view trying new brands as “risky” business and often “seek to avoid that risk”—which is good news for brands already possessing an established consumer base.
Yet, the gap between knowing and doing—particularly when a strategic shift is involved—can be vast. Strategic pivots centered around not just data, but astute analyses of that data, bear out the best results; how do you get there?
Education services and training can be critical to getting a retailer up to speed.
Notes Biggs, “…the cost of acquisition is only going to get higher…You know you need to [make the shift to post-purchase investment]. So now you need to go speak to tech companies who can help you do it…you can try and build it yourself, but it’s going to take you twice as long…from a resource standpoint, it just makes sense to outsource.”
This is particularly so when seemingly tried and true post-purchase strategies are no longer enough to meet new demands, leaving companies stumped. This is again where working with a technology provider that can deploy an Operations Experience Management platform can provide solutions:
“bonprix customers are, by and large, loyal. But, at a time when competition was ramping up, simply relying on quality products and a user‑friendly website was no longer enough…[using a] Operations Experience Management platform to communicate with customers proactively [allows for a better post-purchase experience] and returns.”
However a retailer approaches this challenge, there must be recognition that these trends aren’t going anywhere. The growing costs of business, burgeoning complexity, and stiff, growing competition spells an existential struggle for retailers flailing to evolve their business model in the face of a world speeding toward digital frontiers once only dreamed of.