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Posts tagged with ‘Feedback’

Human Resources-The Forgotten Frontier of CX

Toxic EmployeeMost Customer Experience Management practitioners understand that the CX is a holistic discipline, but tend to focus disproportionally on a customer service delivery. It is understandable as CS is so often the last line of defense – working hard to salvage relationship with the customers wronged by other departments of their company.

 

I wrote in the past about CX being everybody’s business and went beyond the “slogan” to illustrate the real example of back office departments de-railing the best product, marketing or customer service efforts.  In my opinion there is no single function in a company of any size that does not impact the experience the company delivers to its customers:

  • Poor billing practices often repeal customers and motivate them to go to the competitors for better experience;
  • Sloppy shipping processes make customers hesitant to make a repeat purchase;
  • Inadequate janitorial practices incite customers to leave a store or a showroom before they made a selection.

 

The list is only limited to a number of functional groups in a company. Surely the impact of various departments on CX is not equal. That is why so much attention is given to the front office organizations. However, one back office group that is pivotal to every company’s capability to deliver competitive customer experience, manage to escape the scrutiny it deserves. That group is the Human Resources Management department. Failure to recruit, manage and empower the “right” employees takes the wind out a company’s sails on its course to deliver superior customer experience. Failure to let go of the “wrong” employees sets a chain of internal decay that eventually destroys a spirit of an entire group.

 

I was a T-Mobile customer for 7 years. Last week I decided that the company does not deserve my patronage any longer. All these years I was reasonably satisfied with the coverage, devices, billing and tech support. Not every experience I had was so outstanding, but overall I perceived it to be the best I could hope for, even though they had make some missteps over these years. In fact only a few weeks ago I was cheering the Twitter challenge of @JohnLeger promising to beat Sprint by a number of subscribers.

 

Without boring you with the details, I was sent by customer support to visit the company retail outlet (El Cerrito, CA) where I was insulted by a clerk (Noel) who was probably in a middle school at the time I became a T-Mobile customer. There were no arguments, I was not upset or had a reason to be rude or abusive to him. His appearance, demeanor and absolute lack of empathy with a customer were summarily insulting. The question is how T-Mobile HR can allow such a person to represent their company?

 

For the last few years Sprint was very successful in signing up a large number of new customers every quarter, only to see most of them go elsewhere as soon as their contracts were over. T-Mobile pioneered a very successful no-contract policy in their marketing. The customer support was consistently better than their competition. However T-Mobile’s Human Resources may sink their entire growth ambition, if my personal experience is indicative of the quality of retail personnel they hire. Interestingly enough a cursory analysis of employees online comments (6,367) about their experience of working for T-Mobile reveals that 38% hold negative perception of the experience the company delivers to it’s customers

 

After one bad call where I had to remove about $45 worth of services, my coach threatened me with my job. And that’s when I quit. This job is not worth the stress and is just a waste of time. Don’t bother. Advice to Management You are promoted a bad customer experience. Stop with the pushy selling.”

 

While 49% of the employees praised pay structure and benefits, the majority of these opinions belong to sales associates and coaches.  Perhaps the most troubling is the extremely low opinion (-44%) of the company management expressed by 57% of the employees.

 

“With all of the changes in the wireless industry, this company is overrun by politics. Human resources provides little help with any issues at the regional level (personal and coworker experiences). Little promotion from within. Advice to Management The employees who know how the company and stores run deserve a chance at promotion over those outside of the company. Promotion from within is cheaper and isn’t the number one goal of a business to maximize profit? District managers should be more professional and shouldn’t show up at stores wearing t-shirts, jeans, and sneakers. Commission scale is great but there’s always corrections and employees feel like they’re being robbed each month. “

 

I could think of a number of ways to measure the performance of HR and it’s impact on company’s overall customer experience, but I have yet to see any company that links them together.

 

The “Agile” Approach to Consumer Product Marketing

When process succedsThe term Agile is most familiar to people involved with software development, but the basic concepts can be applied to consumer products successfully as well. At least two of its core principals – use of iterations and collaborative involvement of product users (i.e. customers) – were effectively practiced years before the term was introduced and became commonly accepted.

Wide acceptance of Agile methodologies arguably resulted in dramatic increases in software project’s ROI caused by:

  • reduction in the number of abandoned projects
  • cost reduction for user training and documentation
  • increase in user adoption of the “final” product

In other words, the application of Agile methodologies reduces the uncertainties of delivering an expected outcome.

Development of software to simplify business user’s jobs, has at least one critical similarity to the development of many consumer products – customers cannot clearly articulate their requirements. Particularly, the latent ones. Of course there are tools to help you do this, Kano analysis, being one of the most popular. Unfortunately, not enough consumer product marketing professionals are known to use these tools. That manifests itself in a very high failure rate of bringing consumer products to market. The actual rates of consumer product failure are quoted anywhere from 30% to 80%. The numbers vary by industry and are controversial because they do not clearly articulate what “failure” means. I define a product “failure” when it did not deliver the originally forecasted revenue.

Accenture research estimates that the CE (consumer electronics) industry alone has spent $16.7 billion a year to “receive, assess, repair, re-box, restock and resell returned merchandise.” More than two thirds of these costs, or $11.2 billion, are characterized as No Trouble Found (NTF). In other words, the products did not meet the customer’s expectations. Personally, I find the term NTF very disturbing – $11 billion waste caused by poor market requirement definitions and misleading advertising, is indeed a big trouble. That number does not include the cost of the customers time wasted, hit to the brand reputation and environmental costs of transporting and stuffing landfills with failed products and packaging.

The cause of the CE product NTF fail is relatively easy to diagnose – too many products are conceived by engineers who value the “cool” factor the most, without any reference to actual customer needs. That approach worked well while the price and advertising were the most critical factors in customers  purchase decisions. The last few years have seen a dramatic increase in the importance of customer experience delivery as the most influential factor in selecting a product.  The revenue growth of the leaders (Apple and Samsung) are cooling down, while the rest of the CE companies are seeing a drop in revenue and profit contraction.

Meanwhile, there is some evidence that small “un-brand manufacturers” are doing well by practicing “Agile” – looking methods to capture market share from the established brands.

  1. They “collaborate” with the customers of their competitors by analyzing product reviews they published online. They learn what caused these products to fall short of their customers’ expectations and why they purchased these products on the first place;
  2. They design products based on the results of that “collaboration” and their interpretation of consumer needs.
  3. They manufacture small lots of products to test the accuracy of their interpretation, market reaction and analysis of the feedback before going to the next “iteration”;
  4. They form customers’ expectations by “communicating” the product properties with the language used by customers to describe their experience.

“Agile” product marketing is a better approach when scale of design and manufacturing does not work anymore. It is not “cool” that sells your products today, it’s the experience your company delivers to the people who buy them.

 

Message to CX profession – Transparency begets trust

I get requests to complete surveys quite often. They come from my bank, after in branch transactions, websites I visited, customer service of my credit cards and cable providers. caged bird tweetsThey all want to know how I would score whatever is important to them, and leave a little space for my comments. Some of these surveys are just 2 or 3 questions long, but others expect me to answer pages of seemingly repetitive and circular questions.

I have never seen a survey request that explains coherently why my opinion is so important to them. In other words, they never indicate what is going to happen after I have completed the survey, carefully answered all the questions, and provided very detailed comments. Presumably, if the tabulated scores are high enough, whoever created or sponsored these surveys, will high five each other and cash their bonuses. But what about my needs? Would my contribution help anybody to make a better selection? How would I know if my responses contributed to a better product or service? Sometimes a company proudly advertises their customer satisfaction success, but I wonder if  their claims can be taken seriously because there is no way for a consumer to validate them. For these reasons I stopped answering survey requests a long time ago.

Amazon is considered by many, the poster child of customer centricity. I have done business with Amazon for over 10 years and made hundreds of various purchases over that time. I cannot recall a single survey request from them, ever. Could it be, customer-centric Amazon does not care about the customer experience they provide? I think they don’t survey their customers because they understand the power of authenticity that is growing fast with the advance of social consumer. Amazon understood that consumers will never trust a brand more then they trust each other. A long time ago, instead of collecting self-serving survey ratings, they decided to enable their customers to share their experiences with each other in an open forum. Yes, over the years there were incidents of manipulation attempts. Yes, the Liekert stars are not particularly informative. However, overall the customer reviews are extremely valuable to consumers who learned how use the reviews to reduce the uncertainty of their purchasing decisions.

“Amazon does not make money selling goods. Amazon makes money helping customers make good purchasing decisions.”

According to Keller Fay Group research, two primary reasons customers write reviews and publish them online are:

  1. (90%) Help other consumers to make the right choice for them – kind of: “pay it forward”
  2. (70%) Help brands to improve their performance. Consumers rely on the transparency of their input to motivate brands to act

I can only guess that since Amazon does not survey their customers, they probably use the content of reviews, posted on their properties, to measure the level of customer satisfaction of doing business with them. There are plenty of very informative references in many product reviews that indicate how customers regard their experience with Amazon. Explosive and continuous growth of this company is also a pretty good indicator of the consumers’ affinity.

So why do so many companies still shy away from exploring the content, provided by their customers without solicitation? The answers I’ve been given by Voice of Customer practitioners over the years have a common thread:

  • Lack of control over the process
  • Doubts in authenticity of reviews
  • Fear of negative sentiments

In other words, it seems these companies do not trust consumers, who provide their feedback transparently. Yet, these very companies expect consumers to trust them with their feedback without any transparency at all. How reasonable is such expectation?

Can’t Buy Me Love or Superior Customer Experience

Oneness of CXSuperior Customer Experience cannot be delivered without the well orchestrated cooperation of all departments of a company. Yet, this cooperation is very difficult to achieve. The primary reason for the existence of organizational silos is operational efficiency that allows companies to scale their growth. The opposite side of the coin is a lack of unified vision and, as a consequence, the inability to work toward a common goal. This problem has caused many calls for “breaking down the silos“, but I would like to discuss a more constructive approach. Revolutions rarely produce positive ROI for anybody, but their instigators.

There are two approaches commonly discussed to a solution of this problem – heroic leadership act of salvation or/and buying more technology. Neither approach is likely to yield a significant change, in my opinion.

Buying an exercise machine does not improve your health – change of your lifestyle will. Buying marketing automation or big data technology does not improve your company’s prospects for long term profitability growth – delivery of superior customer experience will. Change, before you have to.

Modern organizations are managed by metrics and the dreaded silos are so efficient because they are focused on measurement of isolated sets of results. To continue with the health analogy – measuring blood pressure will not prevent a heart attack unless, the patient is prepared to balance his diet and physical exercise. Similarly, measuring customer satisfaction will not prevent erosion of the company market share, unless the company is prepared to balance it’s operational KPIs and holistic customer experience metric.

The impact of each department within an enterprise on overall customer experience is often neglected and poorly understood. While each one has established metrics to measure its performance, only Customer Service/Support departments are obsessed with measuring customer satisfaction. However, even Customer Service rarely gets it right:

  1. Their obsession is not about holistic customer experience, but about customer satisfaction with customer service.
  2. Their operational KPIs are often cost efficiency focused, and in direct conflict with customer experience goals.

That makes Customer Support department metrics largely irrelevant to the other departments of the company.

A Customer Experience metric is a single measure of how customers perceived their overall experience with the company. However, there are multiple reasons why that perception has formed in their minds. Discovery and measurement of these underlying attributes of the customer experience offers an opportunity to link these attributes to those departments which impact the attribute scores. Below is a crude illustration of the concept.

Link CX with departments

Samples of verbatim used by the customers should be examined to make the linkage more relevant and accurate. Additional sources of internal relevant information such as product returns and customer support ticket volume/complexity would be critical for triangulation on the actual impact of the attribute on the overall customer experience.

This approach is not limited to B2C companies. Just ask your business clients to describe their experience doing business with your company. Let them do it in their own words and resist the temptation of introducing surveys or other company bias inducing formats. The analysis of their unstructured feedback could produce similar charts. The key is to record multiple experiences of your customer’s employees from different departments. Their experiences could be quite different about different attributes of your relationship.

Breaking the silos is an undesirable and unattainable goal. Alternatively, re-examination of operational KPIs of every department for their impact on delivery of superior customer experience will bring the change we seek.

Fake ROI and Customer Experience

Fake ROI and Customer ExperienceMany of us are familiar with a request to justify any project from the return on investment perspective. Corporate management’s fiduciary obligation is to control the use of financial resources for the best interest of the company’s stakeholders. I have no quarrel with this notion. I do have a quarrel with how it is frequently practiced.

There are two major points of contention:

  • The Practical definition of who are a company’s stakeholders – actions speak louder than words. Choices of internal funding, that favor short-term returns at the expense of long-term sustainability of business, indicate that the leadership does not consider employees and customers to be the stakeholders.
  • Departmental (silo) approach to ROI analysis – the reduction of a single department’s operational cost without evaluating the effect it may have on performance of other departments.

There are often inescapable Customer Experience consequences associated with efficiency initiatives that show fake ROI:

  • Replacement of inside sales force with automated phone bots may look like an excellent ROI initiative. However, every recorded call received by a potential or existing customer chips away of the brand value. What additional investment in marketing would it require to at least balance the negative effect?
  • Reduction of training budget for customer service representatives can jumpstart quarterly earnings and may inch up the share price for a week or two to please hedge fund managers. How will it affect customer churn rate, and what is the expense of replenishing the lost customers?
  • Implementation of community-driven customer support seems like a sure winner until its effect on conversion rate from free to paid subscription is examined. From that perspective, the increased cost of the company customer support looks like much better investment.
  • Streamlining cost of customer intelligence acquisition process is a no-brainer. Just lay off market researchers, delegate to product managers DIY survey process and offshore tabulation and interpretation of results. How would it affect your product success rate? What would just 5% drop do to the company’s bottom line?

The point I am trying to make is that  the silo approach to optimization of business processes often looks like “pound foolish, penny wise” tactics. Excessive focus on efficiency, i.e. cost reduction, may cause disproportional increase in expense of attracting and keeping customers, and that destroys an enterprise’s effectiveness.

 “The purpose of business is to create and keep a customer.”  Peter F. Drucker

Don’t waste money on analytics

Don't waste your money on Analytics

 

This post was originally published on http://www.cx-journey.com/.
 

Analysis is an instrument of learning, defined as “a process of acquiring modifications in existing knowledge, skills, habits, or tendencies.” There are substantial volumes of academic research produced over the years on a subject of relationship between learning and beliefs. You can search for them with the keywords “deep learning”, “deep belief networks”, etc. The gist of these academic inquiries points to an observation that deeply held beliefs impede learning process, and network (think groups or organizations) shared beliefs have tendency to suppress learning process aggressively.

As long as you and/or your executives are not ready to question your current beliefs, no amount of evidence will make you or them to act.

The power of analytics is in its ability to expose patterns of data that can help us to learn. When new knowledge is rejected/ignored by the organizational belief system, all the cost of learning is wasted. If you think the last sentence does not apply to you because your use “free” tools, think again. The time, effort and political capital you have to invest in use of “free” tools for learning can be substantial. The probability of acceptance by your “network” of new knowledge, discovered with use of “free” tools, is even lower.  That is because you bypassed an opportunity to socialize the idea that you may discover something your organization does not know yet, and to gain conceptual adoption of such result. Use of “free” tools rarely require any approval process within organization. Therefore nobody knows what you are doing, and as a result are not prepared to consider any findings, unless they support and re-enforce existing beliefs. Presenting new findings, that challenge status quo as a surprise, is very bad idea. The process of selection and acquisition of a tool prepares your audience to consider the findings, as participation exposes them to a potential value.

People and organizations are most likely to consider a challenge to their beliefs at the times of extreme “pain”. At such times the leaders open their minds and examine their beliefs to learn how they need to act to improve their lot. The rest are looking for excuses and complain about circumstances beyond their control. Here is an example describing such a moment at Best Buy in 2012:

The one critical thing we offer the world is choice,” said the Best Buy chief executive officer Brian Dunn in a BestBuy customers analysisMarch 2012 phone interview. He was trumpeting in particular his company’s role in guiding customers through the expanding smartphone universe.

“We provide the latest and greatest choice of all technology gear, from Apple products to Google products, and that brings more opportunity to help people put technology to use. That is a great place for us to be.” A week later, reality intruded. The consumer electronics retailer posted a $1.7 billion quarterly loss and announced it would close 50 stores nationwide. On Tuesday, Dunn resigned.

The belief of the Best Buy CEO (at the time) – “The only critical thing we offer the world is choice” was challenged by customer intelligence that exposed the evidence of “most critical” things from “the world” perspective are in-store service quality and products reliability. The evidence was ignored and a new CEO had to come in.

Here are a few suggestions on how to deal with this challenge:

If you focus on intelligence that can help to improve probability of enterprise to increase its market share, your challenge to status quo is more likely to be tolerated. Business executives are motivated by two desires:

  • increase in revenue or market share and
  • reduction of expense, i.e. increase of profit margin

and two fears:

  • Decrease in revenue or market share and
  • Decrease of profit margin.

Intelligence that improves probability of realizing their desires, and/or forewarn that they are on the path of realizing their fears, is aligned with their system of values and therefore deserves their attention.

New knowledge that does not conform our beliefs is a natural suspect.  We credit our beliefs with helping us to achieve our past successes, while new intelligence has no “resume”. Applying the new intelligence to historic data can overcome the trust challenge if that application successfully expose patterns that correlate with actual results in the past.

Finding the Fine Line: Customer engagement into a product development

Customer Engagement into product developmentMost startups, and many well established companies, utilize “agile” methods to develop new products. These methods involve customers trying early versions of a product in order to validate conceptual viability and provide feedback to be used for further iterations. There are books and training courses sold to promote “lean” development approach, which I have no quarrel with, but I have  yet to see a clear articulation of what stage of such product development process it is appropriate to start billing customers for use. 

Here is the dilemma – wait to charge until the product is completely developed (and foot the expenses while early adopters enjoy the benefits without knowing if they ever going to pay) OR start early and risk repelling valuable development partners.

Both parties in this partnership have to see a benefit to participating in the agile development process to get involved. Customers anticipate that the product will improve their life, when developed, and developers need the customers’ knowledge and experience to develop marketable products. The balance of risk and reward for each party should be periodically assessed to produce a list of necessary conditions to be met before billing can be initiated.

The risk for the development team depends on how much knowledge they possess about the market they plan to address, the processes they target to optimize, and the customer experiences they want to simplify. The risk for the customer is in disruption of their existing process, time investment in learning new workflows, and political capital that may be lost if the product does not materialize.

The trust is the most critical condition for any partnership:

  • Do not ever try to masquerade “puppy” sale strategy as product development partnership;
  • Always communicate how and when, if ever, you will use the feedback given to you;
  • Help the customers sell your product when it is ready to be sold. They will be much more effective than your sales team. 

Validate that the product as-is meets initial customer expectations in terms of functionality and performance before starting to bill the customers. Functionality allows customers to simplify their workflow and process, i.e. save time/effort by a measurable amount. Performance means customers have the functionality available to them consistently and without interruption. Even though these customers are a part of your development effort you cannot expect them to pay for debugging your product. The balance is critical because too much agility can be too disruptive.

I don't always test the code

I’ve experienced both sides of such partnerships. When they worked it was a glorious experience producing very successful products, but when they don’t the developers can lose more than time and money they have invested into the project.  Customers can share their negative experience with the development team publically, before the product launched, to destroy any chance of it to succeed.

 

B2B Customer Experience Management – a story from the trenches

B2B Customer Experience Management – a story from the trenches

You may have noticed that most publically available research into Customer Experience is   focused on consumer products and companies. There are a few good reasons why this happens:

 

  1. We all are consumers, and it is easier to write and to relate as a reader to examples and ideas that involve consumer related issues and experiences.
  2. The evolution of social customer affords greater transparency – consumer goods/services customers are rarely limited in their capacity of sharing their experiences (customer feedback) publically. Corporate customers are severely restricted from doing that, limiting the opportunity for open analysis and discussion of specific examples and practices. We, humans, learn best from stories.
  3. B2B Customer Experience Management practitioners often limit their ambitions to Customer Satisfaction and User Experience areas of the discipline. Tim Carrigan explored the set of beliefs in this excellent article – B2B versus B2C – Debunking Five Customer Experience Myths.

It is important to design the research based on outside-in perspective because poorly focused B2B CX inquiry can miss business targets entirely and discredit a CEM initiative.

Outside-in perspective

Here is an example.

A couple of years ago we were working with a medium-sized B2B software company that was relatively well known to business community in its market segment. The company engaged with most of its sales prospects via their website, where visitors could learn about the products and download a free copy for evaluation. While the site traffic and the rate of downloads were reasonably healthy, a conversion from freemium to paid use license was miserably low. Two possible hypotheses were developed to explain this problem:

  1. Download and installation complexity may have prevented users from experiencing the value of the products. We could measure a number of downloads, which was reasonably good, but not how they were installed, configured or used.
  2. The paid product lack of valuable functions and features compared to the free version and did not provide sufficient motivation for users to convert.

Marketing launched a survey initiative to validate the first hypothesis and designed a 5 question form that was emailed to the visitors a few days after they downloaded the free version of a product. Despite a very low participation rate (below 1%) the survey responses overwhelmingly rejected the first hypothesis as 89% of respondents had no negative experience with download and installation.

The second supposition proved to be much more difficult to tackle. Survey questions about product functionality yielded even lower response and provided no clear guidance. A focus group was presented with a list of functions and features considered for future development which participants were asked to prioritize. They were asked if inclusion of these high priority functions into the paid version of the product would help them justify conversion from the free copy, and the majority gave the positive answer. However, upon the new version release the conversion rate did not improve at all, and corporate management was coming hard on Marketing, who pointed a finger on Engineering who pointed it right back – the blame games began!

 

I will continue with the conclusion of this story next week.

Ode to Customer Feedback from Social Media

VoC ResearchThere are 5 reasons why Voice of Social Customer is more valuable than traditional Customer Feedback programs:

 

1.     Social Media Voice of Customer is unsolicited – the customers share their experiences online motivated primarily by one of the following desires:

  • to help other consumers make a good purchasing selection
  • to get attention of the providers by making their grievances public
  • to assert themselves as consumer mavens

Solicited feedback, in the form of survey response or focus group results, is motivated by participants’ consideration for the emotions of the researcher or moderator. I’ve seen quite a few times when consumers, making enthusiastic promises to buy and recommend a food product they just tasted, spitting out with disgust after leaving the sight of a tasting booth.

2.      Social Media Voice of Customer is customer centric – the customers describe their own experience rather than answer somebody else’s close ended questions. They describe what is important to them in their own words. Sure, that is not easy to tabulate, but “easy” does not make it valuable.

“The first step is to measure whatever can be easily measured. This is OK as far as it goes. The second step is to disregard that which can’t be easily measured or to give it an arbitrary quantitative value. This is artificial and misleading. The third step is to presume that what can’t be measured easily really isn’t important. This is blindness. The fourth step is to say that what can’t be easily measured really doesn’t exist. This is suicide.”

Daniel Yankelovich. “Corporate Priorities: A continuing study of the new demands on business.” (1972)

3.      Social Media Voice of Customer is voluminous – it often provides much more representative data sets for analysis than traditional, company-controlled methods.

4.      Social Media Voice of Customer is inclusive – customers describe experiences that are not limited to your products or brand. It offers the opportunity to learn and compare how customer experience provided by competitive products measures to yours.

5.      Social Media Voice of Customer is authentic and transparent – everybody can see who said what, where and when about a product. Consumers can relate to how the product was sold and used. They can decide if its limitations and benefits would apply to their circumstances. Consumers are smart enough to distinguish genuine experiences of their peers from idiotic and illegal attempts to fool them into a purchase of product that does not fit their needs. They are also capable of understanding the difference between a legitimate grievance and an angry rant. Fostering social media customer feedback builds your brand and improves sales results in addition to providing customer experience intelligence. Traditional, company-controlled Voice of Customer is only meaningful for internal consumption and even that is often only for a self-serving pat on the back.

Study shows that 93% of people who conduct research on reviews sites typically make purchases at the businesses they look up

I am not arguing to abandon traditional methods – they can be very valuable for hypothesis validation. However, social media Voice of Customer can provide much richer market intelligence, second only to ethnographic research, but without its cost and statistical representation limitations.

 

How Online Customer Reviews can help “Brick & Mortar” Retailers

While marketers and researchers slice and dice social media noise, or chasing a diminishing number of customers who still are willing to respond to survey requests, customer review data is not being explored to its potential both online and off.

“Review sites operate effectively at a transactional level. They provide a day to day journal of the interactions between buyers and brands. They enable people to discuss experiences in a world where brands are adjudicated, at least in part, by the experiences of others. They are the basis for reaction. They enable people to pass judgment and to publish those judgments for all the world to see.”

Online retailers have been aware of the value customer reviews bring to improve their business results for a long time.  Numerous studies were conducted to discover and document their operational and financial impact. One of the latest is from Bazaarvoice

bazaarvoice stats

The impact of online customer reviews (customer generated content) on operations of brick and mortar retailers is less well understood. Nevertheless, it can be quite dramatic.

Here are just 3 examples how retail merchandising processes can be optimized leveraging customer reviews analytics:

  • More sales per visit – Too many choices often confuse consumers and prevent them from making a purchase. A few, customer-preferred products make it much easier for a consumer to choose from. Consumers trust their peers more than advertisers, even when they don’t know the reviewers personally.
  • Higher profit per store – Products with reputation for disappointing their customers are more likely to be returned. Handling returns reduces store employees’ time selling and serving customers. The transaction cost of handling returns drains a store’s bottom line.
  • Better customer service – According to our analysis, the “showrooming” effect is caused by poor service, not a price differential. Sales personal can leverage customer reviews to help consumers select the right product for them based on their personal priorities.