Companies spend about 9% to 12% of their total revenues on search, advertising and other marketing activities to attract consumers and grow brand loyalty. But a single hiccup in that experience can drive those shoppers away, shatter brand trust and then keep them away.
Brand loyalty and trust were declining even before the pandemic and the wave of supply chain shortages. The results of a March 2020 Wharton study of 7,500 consumers found that 60% of shoppers reported at least one problem on their last shopping trip. After the start of the pandemic and the increase in online shopping, Wharton’s August 2020 survey results showed that most of those (four out of five) problems happened online. And just one issue during a shopping experience dropped customer loyalty by 35%.
Brand loyalty is great for business. It’s generally far more expensive to replace existing customers than to keep them. Larger brands have more insulation. After all, they’ve got fat wallets, can bombard the market with advertising, can easily increase marketing and even run offers at a slight loss to compensate for hiccups. But smaller brands are rarely rolling in those kinds of resources. Here’s a look at where to shore up e-commerce operations — beyond blowing more marketing bucks to replace customers — to battle the root operational causes that hurt brand loyalty.
How To Tackle The Root Causes Of Brand-Busting Problems
Make sure items are easy to find. Shoppers arriving with intent are the most straightforward conversions. They know what they want and already (mostly) know that they want it from you. It should be a simple transaction with a lot of opportunities to shine. But suppose you’re not using modern technologies or don’t have logical layouts or simple classifications. In that case, even small amounts of friction can transform a “simple” quick grab of a needed item into a hassle.
Focus on transparency for inventory and delivery issues. Being out of stock is one of the greatest busters of brand loyalty. According to the findings of a McKinsey survey, 13% of shoppers will wait for your store to have the item back in stock. But 39% switch to another brand, and, worse, nearly one-third (32%) leave for a new retailer.
In my last article, I wrote about ways to turn supply chain snafus into opportunities. But even with heroic efforts and aggressive use of technology and automation, some customers will have inventory and delivery problems. It’s inevitable.
So, when that happens, honesty, transparency and effort can go a long way toward flipping one of the greatest threats into a huge opportunity. Apologize, but then act. Give your customers options so they feel like they have some control. And show your efforts to do heroic things to try and get the product out as soon as possible. This customer-focused problem-solving creates a memorable moment that often increases loyalty.
Tread carefully with reactive coupons and discounts. One of those actions could be a discount. It’s one of the first defenses against a bad experience. But discounts and coupons are a double-edged sword. Some retailers are quite successful with coupons or continuous discount strategies as part of their models. In contrast, others like bespoke or luxury brands shouldn’t diminish the brand’s value and, instead of cutting prices, increase service. This tactic should align with your brand value. Better yet, create a curated or special offer that feels less like a checkout coupon and more like an exclusive opportunity.
Consolidate inventory systems into a single view. For merchants with physical and digital stores, it’s a good time to consolidate inventory systems. Remove the technical debt of multiple systems that often can’t talk to one another and require so much effort to maintain and synchronize that they distract you from creating valuable offers, experiences or customer support moments. As omnichannel experiences continue to soar, you need as much operational efficiency and consolidation as possible.
Put the “personal” back into personalization. Personalization can generate great results. It’s also a hot buzzword and often poorly executed. Simple emails that scrape a customer’s personal or account-browsing history in your store and play them back are rarely acted upon.
But personalization that’s actually personal can work wonders. Going beyond basic cookies and using technology and experts to analyze patterns can deliver great predictions for intent, which can be remarketed to bring a consumer back in for a buy. And don’t forget simple things that put a face on a purchase. Semi-custom notes from boutique retailers, “family” photos from a local business and other gestures can create a more intimate experience for smaller retailers competing against goliaths.
Two Must-Haves In Building Brand Value
All of these suggestions highlight two critical elements that can build brand value, even when hiccups and challenges occur. The first is to operationalize your proactive customer care to keep a presence throughout all customer interactions. Customer care and the brand experience can’t just be a reaction to an incident or event.
Second, view customers less as single transactions and more as relationships in which the metric goes beyond today’s order value to lifetime customer value. If you don’t have to bust out more budget to replace lost customers, your brand and bank account will thank you.
Originally appeared on Forbes Technology Council.