How to Optimise Retail Customer Engagement

December 15, 2022
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How to optimise retail customer engagement

Customer engagement really is one of those terms where the clue is in the name. It isn’t just about getting your customers interested in your product. It’s about keeping them coming back. And in a retail world where consumers have thousands of options at their fingertips, capturing — let alone keeping — their attention can be a huge challenge.  

The Relationship Economy

Suggested reading: our new Relationship Economy Report to understand how to build better customer relationships

Under pressure 

The modern customer journey spans a huge number of digital and traditional channels, which are easily and quickly adopted and dropped. Rising inflationary pressure has weakened purchasing power, meaning consumers are more selective about when and where they shop. Under these circumstances, customers are more likely to prioritise shopping with retailers that have earned their loyalty or those that offer one-of-a-kind, memorable experiences. Indeed, our recent research found that one in three consumers [38%] say they will shop with a brand they’ve had a good experience with again, even if there are cheaper or more convenient options.

It can cost anywhere from five to 25 times more to attract new customers than retain existing ones. And just a 5% increase in customer loyalty can increase your customers’ lifetime value by upwards of 25 to 95%. So how can brands build on that loyalty? Our research shows that speed alone is not enough. In fact, while speed may be the first thing on consumers’ minds when approaching a brand, in terms of building lasting connections it is far from the only critical element to engaging in the relationship economy. So what else is there?

Our research found that, in addition to speed, there are two important variables in the quest for better customer engagement: knowledge and expertise, and the human touch. Let’s look at each in turn.  

1. Omnichannel expertise

With more channels than ever before — from brick-and-mortar stores, online catalogues and social media — consumer choice has exploded, and personalisation is expected across them all. To deliver on that expectation, retailers must leverage the data they collect across each of these channels, such as which products are typically purchased together, major milestones in a customer’s life, purchase history, customer reviews, and more. Of course, data from external sources, such as industry-wide buying trends and online search queries, is also important.  

Our own research found that this kind of expertise is strongly desired by nearly a quarter [24%] of shoppers. Businesses must therefore ensure that customers have access to staff with accurate information at their fingertips — from what a customer has ordered previously, through to sizing, preferred price brackets and interaction history. For example, when visiting an offline store, a customer might mention to a staff member that they recently bought their first house. They could make a note of the conversation in the store’s CRM system; then, in just a few days, that customer would start to receive marketing messages offering useful items to help them furnish their new home.  

Customer service reps must be armed with the knowledge and tools they need in order to solve customer issues too. We found that consumers want knowledgeable and friendly interactions where appropriate. Using first-party data is an essential piece of this puzzle, allowing organisations to direct customers to well-organised information during the research phase of their purchase. It also allows them to better understand customer preferences, and equip customer service agents with the knowledge they need to more quickly and accurately resolve queries.

2. The human touch

In recent years, a lot has been said about the importance of figuring out your brand’s tone, voice and style, but we want to take it one step further.  

Human connection underpins the relationship between organisations and people. Retailers need to become adept at bridging the online/offline gap to provide the magic moments (such as the new home example) that shop visits used to. Another example would be creating a personalised website dashboard view for returning customers – like when a local shopkeeper used to know your order and remembered to hold back specific items for you.

Emotional connection isn’t always as straightforward as people wanting to speak to a human at all times, above all else. Most of the time people are simply looking for a resolution. But while there are some areas of clear preference for more human interactions over more digital ones, it’s important to recognise that the power of an emotional connection is most effective when it’s at the right moment.

In our research, some of the strongest weightings in favour of a human over digital interaction included ‘ask a question’ [74% v 26%], ‘ask for product or service support’ [69% v 31%] or ‘connect with a community’ [62% v 38%]. So in situations like this, having a real person on the other end can be really beneficial.  

Over and above this, customers want to feel they are buying from a brand operated by people with similar values to themselves. They expect brands to share content that appeals to their interests, ask the right questions, and initiate conversations — much in the same way an individual might. The fact of the matter is that consumers want brands to connect with them. When we asked what organisations consumers would be happy to receive personalised communications from, topics that reflected a particular ideology such as travel and holiday [35%], health and fitness [29%], recipes and food [27%] and fashion [24%] were ranked most highly.  

Our survey showed that there is perhaps no more important factor in determining repeat purchases than emotion. Friendly service was the most popular answer for determining if consumers would reorder from a company [42%] and for determining if they would recommend the brand to a friend, family member or colleague [37%], as well as being a common motivation. So retailers need to listen to their customers, and capitalise on the opportunity to take their feedback into account.  

The Relationship Economy

Suggested reading: our new Relationship Economy Report to understand how to create more customer satisfaction with personalised experiences

Looking ahead 

In the past, the nature of brick-and-mortar stores was largely transactional: the customer walks in, finds the product(s) they’re looking for, pays, and leaves. This attitude has also bled into the realm of online shopping to its detriment: quick, faceless transactions and the occasional abandoned shopping cart. Although there’s no single solution, for retailers, the ability to blend the best of online shopping (speed, seamlessness and efficiency) with offline experiences (human interaction, physical touch and in-person service) might be the key. In any case, putting your customers first will pay dividends, and with the right blend of speed, knowledge and human touch, retailers can be sure to reap the benefits of better customer engagement all round.