This article is the next in the series on how to implement the customer experience element of basic Retail model, in the Indian context. This was published on Sept 17, 2009.
The faith and trust a customer places in a retailer is a function of his shopping experience. Unless a Retailer works towards creating a memorable experience, the chances of success is very slim. There are many ways to achieve this objective. The Kirana stores use a one on one personalised approach which cannot be duplicated by Corporate Retail. So, how should Corporate Retail manage this crucial element?
The faith and trust a customer places in a retailer is a function of his shopping experience. Unless a Retailer works towards creating a memorable experience, the chances of success is very slim. There are many ways to achieve this objective. The Kirana stores use a one on one personalised approach which cannot be duplicated by Corporate Retail. So, how should Corporate Retail manage this crucial element?
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3 comments:
Totally agree with the article & this is certainly the change required in the Indian space specially considering a build for future technique for any business that wants to survive in the years to come & truly play a national & global role in the endeavor to excel & be the best in the world. I personally have been working hard to change this mindset in Indian businesses & very happy to see movement happening on this…I look forward to more on this & would be very happy to contribute more on this in all possible ways.
According to a study by a renowned research & analyst team on the Economics of a Poor Customer Experience, a poor customer experience has a number of components and outcomes – leading to defining degrees of customer satisfaction:
1) Defection of the customer
2) Customer “at-risk”, leading to a decrease in per customer spending
3) Satisfied customers and resolved customer problems
The study shows that for every customer that complains, there is an extremely large number or disgruntled customers who do not complain but will either defect or reduce their level of service. This is in sharp contrast to records of customer complaints, where the contact center has an opportunity to resolve the issue, and lead to retention of dissatisfies customer on the one hand and to rapidly prevent the recurrence of the problem for the next customer on the other hand. By proactively requesting feedback from customers, the organization is uncovering the hidden part of the iceberg and can resolve the issues as well as prevent them from repeating themselves. In this way the percentage of defections and at-risk customers are continuously reduced.
Lowering negative customer experience rate will also lower the negative word-of-mouth and thus will help the organization to recruit new customers and to develop existing ones.
In addition to repeat business, it is a known fact that the cost of servicing dissatisfied customers is significantly higher. Those customers will call more times, will demand discounts and refunds, will ask to talk to a manager and their interaction with the company will become longer and more complex.
The proof of the effectiveness of Enterprise Feedback Management solutions can be quantified by cost-saving results when measuring the improvement of enterprise practices in relation to the customer, the employee and the partner, as follows:
1) Customer Retention and Development
a. Improved customer satisfaction
b. Higher rate of satisfied/very satisfied customers
c. Lower rate of unsatisfied/very unsatisfied customers
d. Reduced customer churn
e. Higher cross- and up- sales
2) The Employee as an Asset
a. Higher first call resolution rate
b. Faster integration of new representatives into the organization
c. Lower rate of employee turnover
d. Lower cost of conducting training
3) Operational Effectiveness
a. Lower rate of repeat calls
b. Shorter duration of the interaction
c. Lower rate of outbound call back to customers
d. Higher use of self service instead of personal one
The 6 laws of customer experience (CxP):
1) Every interaction creates a personal reaction - YOU NEED TO UNDERSTAND YOUR CUSTOMERS, PERSONALLY.
2) People are instinctively self-centered - MAKE THE SHIFT FROM SELFCENTEREDNESS TO CUSTOMER-CENTEREDNESS.
3) Customer familiarity breeds alignment - AN EXTERNAL FOCUS IS AN ANTIDOTE TO INTERNAL POLITICS.
4) Unengaged employees don't create engaged customers - CUSTOMER EXPERIENCE DEPENDS ON EMPLOYEE EXPERIENCE.
5) Employees do what is measured, incented, and celebrated - DON'T BLAME EMPLOYEES, FIX THE ENVIRONMENT.
6) You can't fake it - IF YOU’RE NOT COMMITTED TO CUSTOMER EXPERIENCE, YOU CAN ONLY FOOL YOURSELF.
Don’t Break The 6 Laws - UNDERSTAND THE SIX LAWS, FOR YOUR CUSTOMERS’ SAKE. (and for your own sake)
Jack Welch has said:
"Deal with the world as it is, not how you'd like it to be."
good exchange. but remember that consumer experience is contextual, it depends on what the consumer expects and what the "positioning" the retailer wants to take. it could lead to some consumer and retailer parting ways because the above 2 factors dont match. So be it. So there is no uniform definition for consumer experience.
@ Radha, Totally Agree. In fact that is exactly what the article mentions, that different customers require different levels and kinds of service and that is because there can be no uniform definition for a satisfactory customer experience.
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