While growing its physical store presence, a leading retailer with a strong customer focus wanted to identify a long term strategy for delivering a superior shopping experience in each of its channels. Success would result in buttressing loyalty among core customers and creating loyalty among occasional shoppers. Initial analysis of customer satisfaction data synthesized with actual purchase history demonstrated that loyalty (steady rate of purchase) was higher among retail store customers than among online customers, even though the channels share the same high level loyalty drivers; superior shopping experiences and customer service.
RSG executed survey research and analysis to help understand the loyalty gap and how to close it. For retail stores, the client was the leader for overall experience and customer service, but several competitors vied for leadership in the online space. Moreover, while good service reps were important in both realms, the nature of the online purchase introduced additional potential problem areas around accuracy and fulfillment. Where the retail store could differentiate by delighting customers with outstanding personal service, the online channel’s immediate focus would have to be on making the experience problem-free in order to differentiate from competition.
Conventional wisdom sometimes suggests that loyalty is built by demonstrating how well you respond to a service lapse. Indeed, RSG showed that resolving problems can have a positive impact on perceptions, and to a greater extent for online customers than for retail store. However, in this case, that increase in satisfaction does not translate into greater loyalty (i.e., continued purchases). Loyalty is higher if problems do not occur in the first place. This insight helped to adjust the client’s internal wisdom and focus more on problem prevention as a means to increase loyalty from the online customer.