Loyalty is tough to build, easy to destroy

Discussion
Apr 15, 2016

Through a special arrangement, what follows is a summary of an article from COLLOQUY, provider of loyalty-marketing publishing, education and research since 1990.

According to a survey from thinkJar, 13 percent of customers who are unhappy and frustrated about an interaction tell a whopping 15 or more others about it. And 91 percent of non-complainers simply leave.

This definitely jibes with research LoyaltyOne Consulting has conducted with Verde Group and Wharton School professor of marketing and psychology Deborah Small. A silently irate customer, in fact, is a company’s worst enemy.

Indeed, problem experiences are much more predictive of actual behavior, yet companies overwhelmingly tend to spend the lion’s share of their time, money and focus on creating positive experiences, chasing an often-elusive “wow” moment for consumers.

Verde’s CEO Paula Courtney explains it this way: “It’s not sexy to go to market with a purposeful and deliberate plan to understand pain, yet it is the single biggest predictor of why people stop doing business with you.”

Not only do companies neglect analysis of negative customer experiences, but they tend to focus attention on attitudes that aren’t going to move the needle enough. We call it the “squeaky wheel syndrome.”

At grocers, for example, the complaints that get the most noise — say, long checkout lines — get the most attention. But a problem that might be much less reported, such as poor selection or quality at the deli counter, could actually be much more worthy of attention, affecting fewer customers, perhaps, but more high-spending and high-impact ones.

Gartner calls CX the new battleground and found that 89 percent of companies had hoped to be competing primarily on the basis of CX by 2016. In fact, 64 percent of those it surveyed said customer experience is more important than price in their choice of a brand. The battle lines have been drawn.

DISCUSSION QUESTIONS:
Are retailers overly focused on creating “wow” experiences and missing many of the pain points in the shopping process? Have you seen any innovative approaches to reacting to or reducing shopper problems?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Yes, sometimes loyalty needs the "wow" factor or a strong value proposition. But it more often takes consistent execution to move a customer from merely "satisfied" to committed."
"Creating wow experiences is far more interesting and compelling than paying attention and identifying and addressing pain points in the shopping journey."
"REI is one retailer that even though their stores provide the occasional wow, does a really good job of focusing on the basics and fixing problems."

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21 Comments on "Loyalty is tough to build, easy to destroy"


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Dick Seesel
Guest
6 years 1 month ago

I’ll use Target as an example of a store more committed to the occasional “wow” experience than everyday blocking and tackling. The upcoming Marimekko collaboration is bound to draw traffic to Target stores and the website, and to sell out quickly. But the company has been plagued by stock-outs for many years and finally is in a position to address its supply chain problems with the hiring of an Amazon executive.

Yes, sometimes loyalty needs the “wow” factor or a strong value proposition. But it more often takes consistent execution to move a customer from merely “satisfied” to committed. Just ask Amazon how good execution has worked to grow its Prime membership.

Max Goldberg
Guest
6 years 1 month ago

Fortunately or unfortunately, retailers need to focus on both creating a good experience and customer basics. But hasn’t this always been the case? Successful retailers do both.

Retail managers need to be on the floor talking with consumers, asking open-ended questions, not just, “Did you find everything you were looking for today?” They need to check the shelves to make sure they are stocked (are you listening, Target?). And finally, management needs to empower employees to fix problems when they arise.

Good customer service should be a cornerstone of every business. And isn’t good customer service a wow experience?

Anne Howe
Guest
6 years 1 month ago

Continually chasing a wow in customer experience is tricky, I think it leads to gimmicky thinking, which is not helpful to the shopper over time. Longer-term attention to problem solving is a big key to success.

Sometimes, problem solving is just about making someone in-store available and willing to listen. If a customer knows he or she can vent to someone who acts as their advocate, perhaps the 15 negative shares to friends and family can come down, or the topic changes to a positive. Plus lots of listening leads to many opportunities for quick small fixes that can make a big difference over time in customer experience.

I’ve seen great examples of retail managers walking the aisles in remodeled Lowes Foods stores, actively seeking conversation and feedback, offering help in navigation of new formats and asking if they can help solve for X. The willingness to be seen and involved with customers is refreshing and certainly effective. Publix does a decent job too.

Ryan Mathews
Guest
6 years 1 month ago
First of all, “CX”? Do we need a buzzword for experience, maybe the single most critical factor in building loyalty? Secondly I noticed nobody said anything about the “multiplier effect” of social media, which is a total game changer. Next, why does poor deli section disproportionately impact, “more high-spending and high-impact,” shoppers? Do people that spend less like poor deli quality more? Oh and while we are on this point, does it really shock these folks that low quality food might be less acceptable than spending five more minutes in line? Finally, if it took you until 2016 to figure out customer experience is important, you probably went out of business in 1986. The best way to react to customer problems is to anticipate them or — as Superquinn in Ireland pioneered — reward people for pointing them out. If a Superquinn customer saw something he or she didn’t like, they just had to inform any manager and they would instantly own loyalty points and the problem would get nipped in the bud. Sorry, have to run… Read more »
Richard J. George, Ph.D.
Guest
6 years 1 month ago

I’m not convinced that retailer efforts are really focused on creating wow experiences. However, I agree that many of the pain points in the shopping process are ignored. While focusing on what delights customers is important, an equal amount of attention needs to be given to the many disappointments customers endure at retail.

An approach is to have your associates participate in any discussion related to shopper problems. Besides the normal use of routinized customer feedback approaches, associates can interact in the retail environment, attempting to determine what delights as well as disappoints customers. For every noted disappointment, challenge your associates on how they would fix the problem. This brings more input to the solution process as well as generates ownership of the customer delight process.

Adrian Weidmann
Guest
6 years 1 month ago
Creating wow experiences is far more interesting and compelling than paying attention and identifying and addressing pain points in the shopping journey. While creating wow experiences provides fodder for the PR machine oftentimes fueled by technology manufacturers with financial interests making inflated claims, identifying and correcting shopper journey/process pain points is tedious and often contrary to the status quo — making the corrections that much more difficult to correct. In short, fixing a process in far more difficult and mundane than creating new wow moments. As noted in the LoyaltyOne study, a silent irate customer is the company’s worst enemy. I would assert that a vocal digitally-empowered irate customer is in fact a brand’s worst enemy. A digitally-empowered shopper is a publisher that can tell her story and share her bad experience with your brand with a global audience from your parking lot within minutes and with the click of a send button on her mobile device. Your focus and attention should be on that shared experience: track down the shopper, listen to her story, determine… Read more »
Ben Ball
Guest
6 years 1 month ago

“Consistency is a virtue.”

I don’t know who said it first nor in what context. But it has always applied to retail and it always will. The toughest thing about the emergence of omnichannel, the customer experience and/or shopper journey for most retailers is consistent delivery across all of the above.

Gene Detroyer
Guest
6 years 1 month ago

As I wrote the other day, they are looking for “silver bullets.” A much better approach is in a great quote by Dwight Eisenhower that clearly applies to this discussion. “When asked about his success, Eisenhower said ‘Whenever I run into a problem I can’t solve, I always make it bigger. I can never solve it by trying to make it smaller, but if I make it big enough, I can begin to see the outlines of a solution.'”

In retail particularly, if there is a problem at the store level, whatever it is, that problem is not a unique instance. There are huge underlying issues that are not being addressed.

Michael Patrick
Guest
Michael Patrick
6 years 1 month ago

We hear that many customers go into a brick-and-mortar retailer expecting poor service. Delighting customers means being 100 percent present so that you can connect not just with their needs but their aspirations. Even basics like kindness, courtesy and smiles go a long way to shift a customer’s experience.

One of the primary objectives of district manager visits to stores should be to gather current pain points from the front lines. They can engage the store team in how to resolve or avoid them. They can also move that feedback up the organization to see if these are themes to address or one-off situations.

Ian Percy
Guest
6 years 1 month ago

I love Ryan’s response today!

First, retail is spending FAR too much time listening to consultants!

This morning Gallup came out with a report that a mere 34.1 percent of workers are at all engaged in their work. Think of “engagement” as a synonym for “loyalty.” Is it too obvious that if employees don’t give a damn they are not likely to create a WOW experience for customers?

And can someone explain to me how 13 percent of unhappy customers complain to 15 people while 91 percent of unhappy customers just walk away?

Naomi K. Shapiro
Guest
Naomi K. Shapiro
6 years 1 month ago
First, let’s re-title this article, to: Loyalty is tough to build, easy to destroy and even tougher to rebuild once destroyed. And unhappy customers tell far more people about their dissatisfaction and get even angrier every time they retell it. Haven’t we always known that it’s easier to keep a customer than to create a new one? No problem is ever solved with a one-touch solution. If someone complains, they’re probably not the first to experience it, so pay attention. There is a communications company here that has called me about 20 times since I switched services to their competitor because of very poor customer service on the front end, and they don’t get it when I tell them over and over that all of the energy they are spending on trying to get me back (and angering me even more because they don’t “get” it) could have been/should have been/should be used to create the positive customer experience in the first place! And how can you expect to create wow experiences until you have… Read more »
Ralph Jacobson
Guest
6 years 1 month ago

Responding in real time to consumer sentiment, both positive and negative and even neutral, is critical. Today there is no excuse for retailers of any size and any geography not to leverage the tools necessary to curate internal social data (like customer reviews, call center data and website comments) and also external, often unstructured data from social channels and other sources in order to create truly actionable insights. That kind of talk is cheap these days: “actionable insights.” However it is possible and I’m seeing some really great innovators capture shopper sentiment to build real and “sturdy” loyalty. And that kind of talk is not cheap at all.

Shep Hyken
Guest
6 years 1 month ago

Creating continuous wow is not realistic. You get to create wow when there are opportunities to step up and help a customer in need, resolve a complaint, etc. Yet you don’t want to be average either. Instead, consider stepping up the typical experience level to just above average, consistently and predictably. That is the key. The best companies are not always over-the-top with wow experience, but simply consistently better than average. That, by the way, is within the reach of just about every company, but that doesn’t mean it’s easy. It’s hiring right, training people, embracing a customer-focused culture, creating the right core values and more.

Lee Kent
Guest
6 years 1 month ago

The article talks about CX as the new battleground and this is so true and it all starts with understanding what the customer wants and needs to move them along their shopping journey. That means retailers better know what is broken before they can begin to WOW!

Remember that we live in a “concierge economy” (I stole that from somewhere) pretty much thanks to the likes of Uber and such. We want it when we want it and how we want it. A recent survey involving over 5,000 shoppers said that 85 percent of them would actually LEAVE a dressing room and not buy anything if they didn’t have the right size or color and there was no one there to help them. (Timetrade: The State of Retail 2016)

Put that in your hat and noodle over it … for my 2 cents!

Camille P. Schuster, Ph.D.
Guest
6 years 1 month ago

Why are wow experiences and customer issues mutually exclusive? If a retailer can not multi-task and supply several benefits at the same time, then it makes no difference which one you select. You will lose.

Disgruntled people tell 15 people … really? If they share with those 15 people using social media, it is hundreds or thousands. Added to that list of multi-tasking is the need for retailers to be searching social media platforms to see what is being said about them.

Martin Mehalchin
Guest
Martin Mehalchin
6 years 1 month ago

The destructive power of negative experiences is why 80% of the time it makes more sense to focus on building an effortless experience instead of trying to provide “surprise and delight.”

REI is one retailer that even though their stores provide the occasional wow, does a really good job of focusing on the basics and fixing problems. They have made themselves easy to shop across channels and when there is a problem they have a great culture of doing “whatever it takes” until the consumer is satisfied.

Kris Kelvin
Guest
6 years 1 month ago

“Punch Buggy!”

That was the spot-the-Volkswagen Beetle game I played with my brothers, in the back seat of my parent’s car, during long drives to vacation week at the Jersey shore.

Funny thing: even when traffic slowed to a crawl, we kids could continue playing “Punch Buggy!” since we were oblivious to anything else that was going on. My parents, meanwhile, were swearing under their breath, praying for traffic to get moving again.

“Wow-Moments”, it seems, are the “Punch Buggy” of customer experience. It gives lazy managers an easy, predetermined target to spot, and actively enables their blindness to the systemic problems customers encounter in their stores.

Time to grow up.

Ed Rosenbaum
Guest
6 years 1 month ago

Loyalty is certainly a critical factor in success no matter who the organization is or what they do for customer satisfaction. Creating wow factors does not necessarily make the company a better oiled machine. Doing simple things like managers walking the floor and truly interacting with customers or clerks actually knowledgeable and happy to assist. Wouldn’t that be a novel concept?

I am having a math problem with the survey. Maybe it is because I learned to add 2 + 2 the old way and I’m not good at today’s methods. But how does anyone publish a survey where the two factors considered are 13% and 91%?

Li McClelland
Guest
Li McClelland
6 years 1 month ago
I think “wow” was a strange word for the author to use here. Most normal people don’t look to retail stores for their “wow” in life. “Wow” belongs to such things as special personal relationship moments, travel experiences, music events, and acknowledging serendipitous awareness of something brand new that may come through a book or chance encounter, etc. So the issue is not stores failing to provide enough retail “wow experiences.” Most of us would be happy to settle for “acceptable retail experiences.” When a retail customer has a problem with the staff, the service, or encounters an out of stock I don’t think the complaint usually gets beyond the immediate recipient of the complaint — whether that’s the clerk at the deli counter, the stock guy unloading boxes, or the cashier who asks “did you find everything?” If retailers could figure out a simpler process for the customer to get his issue heard and acknowledged at a level of authority to DO something about it, there might be fewer instances where the CEO hears about… Read more »
Craig Sundstrom
Guest
6 years 1 month ago

Aside from the fact that we seem to be talking about (at least) 104% of a group, the basic premise seems sound. People — or in this case businesses — worry about relatively unimportant issues and forget the fundamentals. How many of us have had to abandon a web-site because it had so many awe-inspiring graphics it was unusable? Or suffered through an “improvement” that was wanted by a noisy few people, but hated by everyone else?

But all of this seems like a basic issue of competence: management that either doesn’t understand its processes, or doesn’t have sufficient faith in them so avoids being unduly influenced from disruptive forces, either within the company, favoring finance or marketing over logistics or engineering, or without — hello “activist” investors….

Arie Shpanya
Guest
6 years 1 month ago
As a result of the high influx of technological advancements over the last few years, it seems as if many retailers are overly concerned with the “wow” factor. While eCommerce grows, so too do the opportunities to make great strides in innovation and more. Unfortunately, this yearning to stay one step ahead of the technology “curve” has resulted in a loss of emphasis on the customer experience. In a survey done by SDL, a British software company, 76% of consumers have actually had their worst customer experience with a business in the past two years. Despite this grim statistic, there have been innovative approaches from retailers to improve the shopping experience. The most notable recently was IKEA demonstrating a virtual reality showroom, allowing its user to experience an IKEA kitchen with respective kitchen furniture. This can prevent buyer’s remorse and instill a stronger sense of confidence in the buyer’s purchase decision. Virtual reality is still heavily in development, but could be an incredibly useful tool for retailers. I firmly believe the best example of innovation… Read more »
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Braintrust
"Yes, sometimes loyalty needs the "wow" factor or a strong value proposition. But it more often takes consistent execution to move a customer from merely "satisfied" to committed."
"Creating wow experiences is far more interesting and compelling than paying attention and identifying and addressing pain points in the shopping journey."
"REI is one retailer that even though their stores provide the occasional wow, does a really good job of focusing on the basics and fixing problems."

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