In this post, Sophie Jillings, head of APAC at TruRating, has a few tricks for making sure your brand stands out in a competitive market.
As the latest figures from NAB show, Australia‘s online retail sector is enjoying strong growth. But it is not without increased competition. Major overseas brands such as Amazon, Marks and Spencer, ASOS and Next are keenly competing online with local players, eroding previously dominant home-grown brands such as Sussan and Cotton On.
It’s not just online where there’s change, the high street is feeling it too. International bricks-and-mortar competitors are setting up shop, from H&M and Sephora through Uniqlo to Zara in the fashion sector. While the grocery market is also attracting new competition – you just need to look at Aldi’s huge growth to see how market dynamics will shift this year.
In its 18th annual Global Powers of Retail report, Deloitte identifies the weakening Australian dollar as one inducement to overseas players. To stay competitive, Deloitte says Australian retailers need to “innovate, drive improved processes and to connect with the consumer”.
This bodes well for ambitious independent brands who are creating new experiences to drive customer loyalty. Take for example Sydney’s popular Shirt Bar, which combines retail and bar experiences.
It’s a great example of how a small retailer can provide a highly personalised, high quality customer experience that people want to return to time and time again. By understanding customer needs businesses can better meet them, both in terms of product and service.
Rethinking traditional models is something that smaller brands can excel at, and exerts pressure on the bigger brands to re-engineer how they do business, re-evaluate product lines and ultimately reconsider how they engage with the customer.
Really it doesn’t matter if you are big or small. Bottom line is that if people believe they will get great service and value for money they will buy from you, and crucially they will become more loyal.
But if everyone is competing for the same customers, how can you stand out on value and experience, and measure how effectively you are doing when compared to your competitors?
The problem of satisfaction
Traditionally, NPS (Net Promoter Score) has been used as a metric to track customer sentiment and loyalty. It sits around the idea of one question: “would you recommend us?” The system has served businesses well, allowing marketers to easily benchmark performance and draw distinct correlations between NPS and revenue growth.
However, as market dynamics have changed, so the demands for more insight have grown: look at how important big data has become in recent years. Though powerful in its simplicity, NPS is very limited in what it can tell you; it doesn’t tell you why someone would recommend you or indeed would not, and relies on follow-up questions to establish patterns.
It’s also a ‘dip-stick test’. An infrequent, and often untimely barometer of customer sentiment, where results will be skewed if the sample base is predominantly made up of loyal customers.
Many businesses are therefore finding that they have to invest heavily to uncover the blind spots in their business – you simply can’t identify what works and fix problems if you don’t have accurate, timely insight. While NPS plays an important role, it’s now time to find supplementary and cost-effective ways to gather the genuine feedback that will make a difference to business performance.
So what should you be looking for when it comes to selecting the right customer feedback tool?
There are two major assets it should have. The first item on the shopping list needs to be breadth of insight and relevance to your business. So if you want to find out why customers won’t recommend your business, you need to be able to ask them that. A lot can be uncovered from pertinent questions such as:
• Was our customer service up to scratch today?
• Was your experience of shopping in-store today good?
• Was our menu good value?
By asking very specific things you can identify trends that you haven’t seen before, such as whether you get different answers to these questions on a Friday evening compared to a Monday lunchtime. With this knowledge comes power. For instance, changing staff shift patterns or improving store management training can be two very quick wins for making tangible improvements.
Faster, smarter response
Speed and timeliness are the other imperative features. Getting real-time, “always on” feedback is highly valuable. The quicker you can capture customer sentiment, the faster you can address critical issues.
Surveying customers months later is simply too late: if they were dissatisfied, they’ve already gone elsewhere and you’ve probably also lost other customers due to the same issue – and who knows who they’ve shared their bad experience with.
Customer impatience also means that you need to keep any feedback process quick and easy. Most customers don’t have time to answer a long list of questions, so one option is to keep it simple and rotate through a core set of questions you can consistently use to benchmark performance.
For example, you don’t need fifty people telling you on the same day that your queues were too long. Ten people telling you that is ample. The other forty can instead be asked about your product range, your pricing, or how easy it was to access help.
Businesses that are introducing insight tools that combine these elements of speed, timeliness and relevance are making strides against the competition. This is because data that immediately translates into information brings instant performance benefits.
It’s insight you can trust: from the way you use and gather information across your business, to the way you respond. After all, you can’t hide from numbers that are black and white.
The argument is clear. As every boardroom starts to look more and more for the clear link between recommendation, loyalty and the effect on the bottom line, marketers need to find better ways to delve under the skin of NPS.
If they don’t, brands will never truly know what growth potential they have, or indeed where their competition will overtake them. And that is never a good position to find yourself in.