Every retailer you talk to these days is focused on the customer experience — investing in it, improving it, revamping it, reinventing it.
Online, in stores or somewhere in between, it doesn’t matter where, retailers understand that consumers’ expectations are constantly evolving, and that a customer experience built on last century’s business model is not going to cut it.
There are two related problems with this focus: defining what “customer experience” really means, and then measuring whether retailers’ investments are actually improving it. Because retailers are in the business of selling products, it’s easy to fall back on this old-school measure of customer experience success: Did it move the needle on sales?
The Obvious Metrics Miss a Lot
Retailers have tapped into a lot of nuance when it comes to metrics that measure sales results. There are measures of traffic volume, frequency of visits, average conversion rate (which works both in stores and online), and average order value. And the analysis can get even more detailed. Frequency of visits, for example, can be broken down to reveal the amount of time that elapses between visits. And in stores, where employee engagement plays a role in achieving sales goals, retailers are also looking at whether shoppers engage with employees and for how long.
Theoretically, these measures make up a lot of different levers that retailers could potentially move in order to drive sales results. But they are all lagging indicators that just tell retailers how they did in the past — often too late to prevent customer experience failures from impacting future sales results. That’s because a sale is an outcome. If retailers could just say “We’re going to grow sales 10 percent this year” and it would happen, they would all be wildly successful.
It doesn’t work that way. Retailers must implement customer experience strategies, and if those strategies work, then increased sales will be the result. But none of the sales-oriented metrics mentioned earlier truly measures the health of the customer experience.
Metrics that do reflect some aspect of the customer experience don’t do so in a way that helps retailers understand how to get the customer experience back on track.
For example, traffic can be a good measure of whether people are willing to come to your store or visit your website. But if traffic falls off, the decline could be due to a number of complex factors, and measuring traffic alone won’t help identify the root cause. Awareness may have fallen because the advertising budget was cut, or because Facebook or Google changed their algorithms. Awareness issues can be fixed — with the right amount of money and the right targeting. But in a more worrisome development, it could be that customers are deciding not to come back because they are having bad experiences.
Related Article: Do You Abandon Your Customers Post-Sale?
Leading Indicators: Missing Metrics
How do you get away from relying on lagging indicators and get in front of measuring the customer experience? First, you need to define what customer experience actually is. While many retailers increasingly talk about the “customer journey,” very few look at the effectiveness of that journey.
Here are some specific measures that can serve as leading indicators of problems affecting the customer journey:
- Contact page conversion rate: If a lot of shoppers visit your online contact page but the number of people who actually contact you is significantly lower, you should look hard to find out exactly what is happening. The fact that there are a good deal of people who think about saying something to you but don’t could be an indication that your customers harbor a lot of hidden anger that’s not evident in other channels.
- Any online page failures or bounce rates: Websites have a lot of moving parts and integration points. From a retailer’s perspective, online page failures can happen at any time. From the consumer’s perspective, a page failure may not only kill a particular shopping journey, it could make that shopper think twice about coming back again. I’ve seen retailers that have not integrated online purchases of gift cards into the mobile experience (app or site), to the point where visitors could get a 404 “page not found” error message when they search for “gift card.” Those situations have lasted not days or weeks but years. Clearly, those retailers did not have the online conversion rate for mobile gift card purchases on their radar at all, and that led to a customer experience failure — one that may have ended up being the only experience some shoppers ever had with certain brands.
- Rage clicks: When a customer clicks on a button multiple times without anything happening (and you know you’ve done that, too) that’s a “rage click” incident. Web analytics tools can capture these clicks. Retailers should recognize that rage clicks are not simply a sign of technical failures. These incidents are customer experience failures that were so bad that they literally enraged some customers. Is that really how you want a relationship to end?
- Last contact tone: In cases where some kind of customer experience failure is already on the books, a growing number of retailers are at least trying to get in front of the next experience by tagging the affected customers as ones who previously experienced problems. Your response doesn’t have to be something overly personal, like “Hi, Ms. Jones. Oh, I see you had a bad experience last time ....” That level of personalization can be creepy (though it could work better online than it would in person). But owning your past mistakes upfront when engaging customers can be effective. It disarms them (they may even be delighted to learn that you recognize their past unhappiness), and it gives you an opportunity to start the next experience off on the right foot.
Related Article: How to Measure Customer Experience Beyond Net Promoter Score
Track Every Minute of Engagement
If you feel you have to tie the customer experience to sales, there is a universal measure that captures activity even as customers cross channels: sales per engagement minute. Every time a consumer engages with your brand — whether on social media, on your website, via a mobile app or in the store — that is an act of building out the customer experience.
A shopper might spend hours online researching a product and then go into a store to buy it. The retailer might see that the in-store engagement of, say, 10 minutes with an employee yielded a sale, but completely disregard the time spent online because that time wasn’t explicitly connected with the sale. But looking at the overall level of engagement, across all touchpoints, would reveal just how much effort the retailer actually expended in getting a sale. It becomes less about specific channels or conversion rates, and more about monitoring how much engagement is happening, and whether that engagement is driving sales over time.
If engagement rates start to fall off — by channel, by segment, by product line — then you know you may have a problem, and you should start to look for the root cause, long before the problem shows up in sales figures.