The Keys To Providing Great Customer Experience: Listen And Respond Quickly To Loyalty Program Feedback
By Luis Artiz, Epson America
Most retailers understand that their success depends heavily on their ability to provide a positive customer experience (CX). The problem, however, is that delivering CX isn’t as straightforward as it seems, and it requires merchants to be continually learning and updating their strategy. By taking a closer look at the loyalty program lessons learned by Starbucks and Woolworths, retailers can learn a few lessons about winning repeat customers in today’s environment.
A Few Facts About Your Biggest Demographic
For starters, let’s consider a few fundamental points about retailers’ largest consumer group:
- The Millennial generation, which includes those
born between 1982 and 2000, is already more numerous than any other age
group—even the baby boomers (83
million vs. 75 million).
- It’s estimated Millennials spent $200 billion in 2017 and they will pay $10 trillion over their lifetimes as consumers.
One thing that separates this generation from previous ones is that the majority of its members have been immersed in the world of online shopping, search engines and constant Internet connectivity from a very young age. Many of them also have never experienced waiting in line at a bank, waiting for a letter to arrive in the mail or having their musical choices limited by what’s on the radio. Because of this, two things are happening: 1) Millennials have the power to change their minds as fast as they can enter a new web address, and 2) They are helping older generations expect the same things.
No One Gets Marketing Right Every Time (The Key Is To Keep Listening And Adapting)
Knowing customers’ shopping preferences is a crucial capability for merchants all around the world. Australian supermarket chain Woolworths changed its loyalty program three times between 2015 and 2016 trying to find one that resonated with its customers. Its original loyalty program awarded Woolworths customers with Qantas frequent-flyer points. Then the retailer decided to replace this program with “Woolworths Dollars,” a program that awarded Woolworths rebates only for the purchases of select items.
After receiving consumer backlash, the retailer once again redesigned its plan to allow customers to use loyalty points toward Qantas miles. Woolworths conducted follow-up surveys that revealed only 41% of customers believed the program offered good value. As a result, Woolworths made another change to its program, opting for Woolworth Points, which could be used toward discounts at Woolworths or as Qantas points.
An article that appeared in the Australian Business Review titled, “Woolies finally reclaims supermarket title,” suggests the supermarket chain’s responsiveness and persistence paid off.
Starbucks is another excellent example of a retailer that’s winning by listening carefully to customer feedback and responding accordingly. In 2016, the coffeehouse giant changed the earning structure of its 11 million-member Starbucks Rewards program, awarding points based on dollars spent rather than the number of visits. The backlash was immediate and fierce. Starbucks’ response was to heavily promote monthly double-point days (for customers to earn rewards quicker), and they added other specials, including a chance to win free Starbucks for life.
Its biggest hit, however, was its Mobile Order & Pay app, a time-saver that enables loyalty members to order ahead and pick up in-store. The coffee retailer’s Q2 2017 earnings were 6% higher than 2016, confirming its ability to adapt to customers’ needs.
However, the positive effect of the mobile app led to a new challenge: an increase in orders and in-store traffic. If there’s one thing today’s consumers have little patience for, it’s waiting in line.
Business Insider did a one-week study of the problem and reported that “While Starbucks promises mobile orders will be ready within three to five minutes of placing an order, the chain fulfilled this promise in just one out of five visits.”
Again, Starbucks recognized right away that it had a problem (paying attention to its customers’ feedback on social media), and they resolved the issues quickly. Shortly after the article was released, Starbucks announced it was going to tweak its store layouts to free up more space at pickup counters for mobile orders, and that it would add more employees focused solely on mobile orders during busy hours.
Starbucks didn’t just focus on short-term fixes; it shared that it’s looking into more intensive store design revamps that will enable it to more easily segment in-store and mobile orders because its mobile app orders accounted for 8% of orders in the US — more than double 2016’s figures.
Conclusion
Figuring out the formula for CX success can be a daunting task, and even the best merchants miss the mark at times. One thing we can learn from savvy retailers like Woolworths and Starbucks is that the customer loyalty program is a crucial part of the equation.
Getting customer feedback on your loyalty program is vital. And if a majority of customers are feeling underwhelmed by it, find out why and fix it — quickly. They’ll appreciate the fact that you’re listening, and they’ll continue rewarding you with their continued patronage.
Luis Artiz is Group Product Manager for Epson America’s point-of-sale (POS) solutions division. For the last two years, he’s led product marketing, business strategy and product launches for the North America region. Prior to Epson, Artiz spent seven years at Belkin International as Director of Product Management leading the worldwide business products division, with responsibility for marketing, product development, roadmap, and P&L for all global regions. He started his career as an Engineering Group Manager at Xponent Photonics, a fiber optics technology start-up in Monrovia, CA. He earned both his MBA and Masters in Electrical Engineering from the University of Southern California.