When it comes to shopping behavior, price is a key motivator. However, to sustain a customer’s loyalty over the long term, retailers often find it valuable to focus on the customer experience. But which experiences are most important to shoppers? And how likely are they to influence a change in behavior? Let’s explore the topic using these three scenarios:
- More control over the shopping experience: Chris works hard at looking good. In the past, shopping for cosmetics meant stopping at numerous stores, many of which didn’t offer much in terms of loyalty programs or discounts. Then, a favorite retailer created a loyalty program that puts the customer in control of when, where and how to use the accumulated points. This control is a valuable benefit, and now Chris rarely shops anywhere else for cosmetics.
- Turning stress into peace of mind: Alex used to get nervous buying big-ticket items, worrying about making the wrong choice. That was before discovering a warehouse club that had an easy return policy. With competitive prices and a wide selection, Alex now shops the warehouse club with peace of mind. Returns are no longer a hassle and there are no questions asked.
- No-hassle shopping: Cameron’s family has style, but they don’t have tons of money to spend. In the past, they used to spend too much time searching for coupons and discounts, but then they discovered a store they like offers a premium loyalty program — one that applies all discounts to members automatically. The shopping experience became simple and hassle-free.
The Common Denominator: A Great Customer Experience
Chris, Alex and Cameron all have one thing in common: they all value a personalized customer experience. In fact, they value it so much that they change their behavior based on these experiences. Of course price is still important, but as these stories demonstrate, customers base their decisions on their perceived value, which goes beyond price alone.
According to a recent Customer Experience and Impact study, sponsored by Synchrony Financial, there are four key customer experience elements, out of 27 tested, that rise to the top for consumers. In fact, 53 percent of consumers say they would pay slightly more for the experiences they value most. The biggest — and most important — impact of great customer experiences is loyalty. According to the survey, 77 percent of customers say they would shop more often at a retailer if they received their personal top three customer experience benefits. Below are the findings of our Customer Experience Impact Study, and four key insights for retailers.
Insight No. 1: Customers are looking for ways to feel valued and make their lives easier.
When customers were asked which elements they valued most in the shopping experience, four concepts were rated highest. The elements rated highest were of a practical nature — things that eliminated stress, gave shoppers more control and made their shopping experiences easier.
Insight No. 2: Learn which experiences don’t matter to customers in order to focus on those that do.
Among the 27 elements we queried, some were more important to shoppers than others. The chart above illustrates the benefits shoppers told us they valued the least. Knowing which matter most and which matter least is an important way for retailers to focus their efforts and resources on experiences that customers value. Important to note, however, is that shoppers’ expectations are all different. Some things may not matter to the general population, but among certain retail segments they may be extremely important.
Insight No. 3: Factors determining a positive customer experience vary by retail category.
We asked customers to think about the best store experience they had in the past 12 months. Their feedback fell into distinct categories, which are presented in the chart below. The percentages represent how often the category was selected.
Apparel and department store shoppers were most likely to remember excellent associate interactions, while mass-merchant shoppers most often cited stock conditions and selection.
A great customer experience drives incremental shopping in all categories. Over half of surveyed customers said they will shop a retailer more often because of a positive experience in-store.
Insight No. 4: Finding and implementing the top experiences your customers value has an impact on their behavior.
The value of a great customer experience cannot be overstated. Customers tell us they would pay more and remain much more loyal to a brand in exchange for a great customer experience.
More than half of consumers say they would pay slightly more for the benefits they value, but the biggest impact of a great customer experience is loyalty. Seventy-seven percent of customers indicate that if they received their top three benefits, they would shop at a retailer more often. Millennials are the most responsive group, with 89 percent saying they would be more loyal to retailers offering the benefits they want most.
The customer experience matters, and the most compelling experiences drive increased spend and loyalty. Giving customers what they want doesn’t have to be expensive, it needs to be relevant. Retail brands that are successful often implement differentiated experiences to simplify the lives of their customers and make them feel valued.
Sue Yasav is a content strategy and thought leader for Synchrony Financial, a consumer financial services company.