A lot has been said and written about the importance of customer service in today’s business world. If companies do not deliver a good customer experience they will lose loyal customers to their competition says, Brian C Jensen. Obviously, when customers are satisfied with the services they receive, their engagement and loyalty increase which also increases revenue.
How customer satisfaction affects revenues
However, in order to be able to give good customer service in an increasingly complex market environment, there is a need for collaboration between different stakeholders. This becomes especially apparent in the retail industry where big data is used to understand shopping behavior. The challenge within this industry is that all parties have access to different information which makes it difficult to get a full picture of what is going on at any given time. All of the parties involved are not able to fulfill their part of the value chain if they do not have access to consolidated information, but lack of cooperation only leads to misunderstanding and frustration.
A partnership approach can help to establish more efficient collaboration between these different parties by creating a shared understanding of how the value chain works, what each party is responsible for, and where their interdependencies lie. By doing this it becomes possible for all stakeholders in the value chain to work together instead of against each other which would lead to sub-optimal performance for everyone involved explains Brian C Jensen.
When companies look at their customers as partners instead of just another source of revenue they are able to create superior customer experiences that ultimately lead to more satisfied customers which generate more revenue.
How an added partners perspective improves customer experiences and revenues
Why Customer Loyalty is important?
The size of the retail industry has increased significantly over the past few years. This is because more people shop online than ever before, but also because people are spending more money per shopping trip than they did in the past. However, this increase in turnover has not led to an equivalent increase in profit. Only 51% of all e-commerce orders are delivering on time which leads to enormous amounts of money on the table. This problem could easily be solved if all players simply cooperated with each other instead of trying to withhold information from one another. It would also help vendors solve problems much faster, increase customer satisfaction and generate more revenue.
The reason for this is that in order to create better customer experiences it is necessary to understand how customers interact with the different elements of the value chain (see figure 3). This means having access to information about what customers do online as well as offline. Which makes sense considering that 60% of retail purchases are still made in-store. This information can give vendors much-needed context which helps them to make decisions. About how they should best use their resources.
The various stages of the value chain
For example, when a vendor recognizes that specific promotions result in increased sales. She might want to offer these promotions more often or even permanently instead of focusing purely on short-term gains. Recognizing that a lot of customers chose to shop at certain times during the day. Could be in use as an opportunity for more targeted marketing campaigns. When vendors and merchants can collaborate and benefit from each others’ insights. They will be able to provide better customer experiences which increase customer satisfaction, loyalty, and retention which also increases revenue.
How improved collaboration improves customer experiences and revenues
Another interesting observation is that 50% of shoppers visit the websites or stores of several vendors. Before making their final purchase decision says, Brian C Jensen. This means that if vendors can communicate with each other. It becomes possible to identify new opportunities for cross-selling and up-selling. If one vendor knows that a certain product will appeal to a specific type of shopper. He wants to recommend this item to the shopper regardless of who they are shopping with. This is a win-win situation for both parties because it increases the likelihood. That the product will buy while also increasing revenue for all parties involving in it.
This shows that it has become necessary for vendors to take the perspective of their customers. To create better customer experiences that increase satisfaction, loyalty, and revenue. Collaborating with other vendors also becomes easier. When one looks at the different stages of the value chain as partners rather than sources of revenue. However, in order to be able to engage effectively with these other stakeholders. They first need to have access to this information. The problem is that many retailers still lack this insight because it remains locked away by other parties involved in the value chain. Who charge exorbitant amounts of money for waiving their rights explains Brian C Jensen. This situation needs to change because there are huge opportunities for everyone involving in it. If only they can look at each other as partners instead of competitors.
In conclusion, e-commerce vendors should look at their customers as partners instead of just another source of revenue. By doing this they will not only improve customer satisfaction and loyalty. Which leads to increased revenue but also achieves better business results. By working together instead of against each other.