It is world known fact that satisfied customers come back time-and-time-again, and they often encourage their friends and colleagues to do the same. But in many retail businesses, when customers experience a problem, they may never come back again – and the bad word can soon get around! Customers often tell between five and ten other people about their bad experiences.
One of the biggest challenges to the retail industry is finding out when something has gone wrong. When customers complain you get a chance to put things right and make sure it never happens again. But research shows that you probably only hear from about 5% of the customers who experience problems.
Very often, customers who experience a problem in a retail environment either don’t know where to complain, or they simply don't want to create a fuss.
Obtaining actionable customer feedback is even harder across a large chain of outlets or in a franchise operation. Senior management seldom has the luxury to monitor customer experience at every outlet or branch. Although mystery shopping can help, it is often limited by infrequency of visits and the sheer costs involved in inspecting and reporting on every branch, several times a day.
Industry has identified four significant limitations that often arise with satisfaction research, mystery shopping and interceptor surveys in the retail industry:
They often fail to measure customer satisfaction and performance in terms of strategic or financial outcomes. Remedial actions are therefore often driven by anecdotal influences and un-calibrated expressions of customer “importance”
They seldom identify where specific action needs to be taken and typically result in general solutions, organisation-wide initiatives and improvement initiatives with unnecessarily high deployment costs
They often fail to identify what specific remedial action should be taken to improve service. Opportunities for simple and cost-effective improvements can therefore remain elusive
They typically fail to provide feedback often enough to identify problems soon enough to take appropriate action
The challenge for many retail businesses is to obtain systematic and cost-effective feedback that can identify just where their service strengths are, and where there are opportunities for improvement. This is only possible when top management is aware of the ground reality. Unless you listen to the voice of customer, it can get difficult to bring clear insights to individual retail business.