Building a personal relationship with customers is becoming increasingly important in a world of technology where consumers are better informed and have higher expectations.
Market research firm Forrester found that 85% of consumers buy from companies they have strong emotional connections with.
Harvard Business Review says customers who are “fully connected” emotionally are 52% more valuable to brands than customers who are “highly satisfied”.
How can co-operative retailers respond to this challenge? Claire Carroll, head of customer services at the Co-op Group, recently took part in a webinar hosted by Retail Week, in which she looked at the importance of developing an emotional connection to the brand.
She was joined by Dan Murphy, partner at Kurt Salmon, and Gavin Mee, Salesforce senior area vice president, UK and Ireland.
Ms Carroll joined the Group in May 2015, with a vision that customer support can play a key part in transforming a business.
She said her first step was to encourage colleagues to find out how the issues raised impacted on customers’ lives, rather than perceive their queries as complaints. An adviser can now resolve the issues of five to six customers an hour, compared to only one a year ago.
She says she also took the “bold move” of removing authorisation limits. “The advice given was to see the customer,” she added.
Staff also had accounts created to enable them to give personalised gifts to customers when they believed it was appropriate.
For example, staff found out that a little girl who found a fishbone liked the film Frozen and sent her a fancy dress box. Another customer complained about disabled parking. After learning more about the person, the Group made a small charity donation on the customer’s behalf.
“It’s about personalisation,” said Ms Carroll. “For me it’s all about showing a contact centre is about adding value.”
An inside team also pulls in complaints and works with stores on an individual basis to give support and training.
Dealing with complaints in the appropriate manner can improve the business’s performance. After receiving 38 complaints about the flavour of a specific jam, the Group changed the recipe within a week.
“Then we could identify those customers and send them a ‘thank you’ personalised with the new jam flavour,” said Ms Carroll.
“Today we have mountains of insight data about the moves customers make online, offline and in physical stores, so there’s no excuse for not being much more responsive on a personalised level,” added Dan Murphy. “Some retailers are very good on that; some are very early in the journey.”
With the retail sector moving towards a multichannel approach, the delivery of customer service is also changing. Retailers are expected to show consistency of service across their different platforms.
The Group’s members get to benefit from advantages across all of its businesses, such as food, insurance, travel or funeral services. But this means they also expect the business to know them.
“For example, I buy funeral services for my mother from the Group and the day after you send me a voucher for Prosecco. It’s a hygiene factor we have to get right,” said Ms Carroll.
In terms of upcoming trends for the retail industry, Dan Murphy thinks the future may be self-service. “An increasing number of situations is solved by self-service major trend,” he said.
Another major change is the need for retailers to be consistent – whether online, via catalogue, mobile or in stores.
“I don’t want to be asked who did I speak to – everybody in the organisation for me is you,” he said.
Ms Carroll thinks personalised services will continue to play an important role: “Some people say the future of customer service is no service but I don’t believe that.
“Personalisation is invaluable because what I may want to redress may be completely different from what you do. When we get something wrong, the only way to fix that is go over and above – and we have to learn something about the individual to do that.”
“Many retailers begin to realise the shop format was fine for baby boomers but millennials expect to be treated as an individual and want personalisation,” added Dan Murphy adding that the old prescriptive approach will be replaced with a responsive model.
The Group is also trying to engage customers in developing new products or taking part in community events.
“I’m really excited about customers who want to get more involved with retailers and want to help shape the proposition,” said Ms Carroll. “We do community events and our members are getting involved in telling us what the next flavour pizza should be.”
Asked what advice they would give to small retail start-ups, she stressed the importance of being clear about the organisation’s values and principles and making sure that employees know this.
“Have a culture of customer, have that engraved. It’s the job of everybody to be focused on the customer,” added Mr Mee.
“It’s about engaging emotionally with the customer – every senior executive should spend the first hour of every day looking at complaints and social media and the chief executive should be responding personally to this,” said Mr Murphy.
Earlier this year Institute of Customer Service named the Co-operative Food among the food retailers with the biggest growth in customer satisfaction compared to July 2015.