Listening is Retaining

Multiple meta trends in the past years are changing and reshaping retailing.

The move towards online retailing was accelerated by Covid. It also changed customer expectations. They expect excellence in retailing - from simplicity and ease of use of the app to excellence in deliveries and returns management.

The shortage of labour is going to be a long term challenge in retailing. As unemployment rate of 3.7% hits a 50 year low in UK and work patterns change, retailers will find it challenging to find right capabilities. This will range from in-store staff to data analytics. The pressure on automation will grow.

The high inflation trend (9% today) and the accompanying threat of recession, is going to make customers more likely to leave.

In this inflationary, digital and labour constrained world, how do retailers grow? The main answer - take care of and keep your existing customers. Customer churn hurts growth, is demoralising and hurts the margin.

There are 4 steps that any retailer can take today to improve customer retention. 

1. Fix issues quickly

Customers are forgiving of faults. They know issues happen. This may be a bug at the checkout or items missing in the store. But they expect retailers to find these issues quickly, fix them and maintain the quality.  

The problem is that most retailers are not fixing issues quickly. 

2. To fix quickly, listen actively

Retailers have integrated full stack monitoring systems into their tech stacks. These monitor the products, apps, infrastructure, networks, log files. But they miss failures in customer experience, defects in features, flaws in processes, quality issues. 

As a result, the company may believe that their payment system is working well, while customers have problems at checkout. The inventory systems will show green, while customers are not able to find items.

To spot the customer issues, retailers need to actively monitor customer data. In real time, every day. This includes listening to all customer channels - from calls to emails to social. 

3. Find the ripples, before they become a tsunami

Retailers, like most companies, focus on the big issues - the tsunamis, in their business. These issues are big because they were not spotted and fixed early. So now, they have negatively impacted a lot of customers. Many have possibly left.

Retailers need to change this paradigm. To keep customers, spot the issues early. While they are still ripples. And fix them. This will ensures that the number of customers affected is low and retention is high.

4. Use technology

There are two ways to listen actively and find the ripples. Employ a lot of people to listen, read, understand what the customer is saying. In a labour constrained world, this is difficult. It is costly, late and often inaccurate.

The alternative is to deploy technology and automation. Artificial Intelligence (AI) technologies have progressed rapidly. It can be used to listen actively 24/7, in different languages, and understand when the experience is going wrong or the product is faulty.

In summary, customer retention is the best strategy in todays retailing. To retain customers, you have to actively listen to them and spot issues rapidly. Technology can assist by automating this process in a very cost-effective way.

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