Using Customer Feedback to Encourage Customer Loyalty
Big online businesses such as eBay and Amazon have recognised the importance of creating a dialogue with their customers and replicating a word of mouth experience. Bill Cawley, founder of Feefo, explains why customer feedback isn’t just a marketing gimmick and how it can encourage brand loyalty.
Few would contest that the success or failure of a business is dependent on having loyal customers and those that make repeat purchases and recommend the company to others. However, nurturing customer loyalty can be tricky for online businesses, where the lack of face-to-face and personal contact compared to bricks and mortar outlets is more difficult.
Loyalty is highly dependent on the business’ reputation and the satisfaction levels of its customers. During difficult economic times where people are tightening their belts and spending less, keeping existing customers satisfied should be a priority for all businesses.
As revealed in a recent study by the Interactive Media Retail Group, website features that are likely to keep customers satisfied involve provision of advice and reassurance about purchases. This includes recommendations and customer reviews. For example, eBay and Amazon work by giving potential customers some means of assessing the reliability of sellers. The customer feedback systems of these companies are an important part of the shopping experience on their sites. How else do you know that you can trust a seller who lives at the other end of the country, or even the other end of the earth?
If your brand is solely Internet based, gaining consumer trust can be more of a challenge than if your brand already has loyalty with customers offline, where that trust will also transfer to any online efforts.The old fashioned values that operated in the corner shop are a good template for online businesses to follow. In the shop, the man behind the counter talked to his customers, and by doing so, made them enjoy buying from him and keep coming back. He also learnt what his customers wanted, which made him a better supplier as well as a more profitable supplier. This dialogue between customers and businesses is the most valuable benefit of feedback.
Since deploying feedback on its website two years ago, Charles Tyrwhitt, the online shirt retailer has had over 60,000 comments from customers on its service and double that number of product assessments. As well as being a useful market research tool, this feedback has also had clear benefits to the bottom line. Analysis of a sample group showed that those that looked at comments from previous buyers had a conversion rate three times greater than those who hadn’t. The number of repeat orders within the sample period was also five times greater, showing that these customers are more likely to buy from them again.
However, according to dotCommerce many UK retailers are failing to include added-value content and features on their websites that can encourage repeat visits, high transaction values and ongoing brand loyalty. Just 10% of retailers allow customers to submit comments or product reviews on their websites. There are four simple ways of how customer feedback, the good and the bad, can be used to encourage customer loyalty:
1. Allow customers to openly comment and not just rate
All too often online businesses will ask their customers ‘what did you think of this product?’ in order to gather customer feedback. By asking this question, the businesses are avoiding the much more important question ‘What did you think about us?’
An open-ended question such as this is a better way of finding out what’s on customers’ minds. This is more effective than distributing a questionnaire concentrating on areas that are assumed to be important to customers.
By asking its customers a broader question Clifford James, the home, garden and clothing retailer found that some customers did not fully understand the return policy for goods. A few small changes to improve clarity improved customer satisfaction immediately.
2. The good, the bad and the ugly – let your customers see what others think
To some, displaying direct customer feedback publicly on their web site threatens their perceived control over their reputation. However if a company provides a bad service, you can be sure that the news will spread immediately over the web without giving it the opportunity to reply. But the Internet has, on the other hand, also provided us with an unparalleled opportunity to be open and transparent in our dealings. By displaying direct customer feedback, the good and the bad, publicly on their website, a business shows that it is both legitimate and credible.
3. Ask, receive, and reply!
Companies should take advantage of the instantaneous nature of the web and make public any responses to comments from unsatisfied customers. By directly addressing any negative feedback Clifford James has been able to reduce dissatisfaction in their customers by over 50%.
Similarly, Fishtec, a leading mail order fishing supplies company, recently received feedback from an unhappy member of their loyalty club. The customer was unsatisfied with the level of service they had received and had made it known through public negative feedback. Fishtec quickly responded to apologise and address each point that the customer had raised, as well as offering a free product as a goodwill gesture and extending an invitation to discuss any problems further by telephone. As a result, the customer left another comment, stating that they were impressed with how the company dealt with their feedback and went away happy.
4. Learn more about your business and your customers’ needs
Feedback is a quick and inexpensive way to compare customers’ wants and needs against the products and service which a company is providing. To retain customers and grow a business, the company needs to understand how its customers are changing and how this reflects against their business offerings. Feedback can also allow a business to see where things are going well and what needs improving.
In summary, customer feedback is a useful tool for any online business in growing a loyal customer base. Whilst the more immediate affects of making feedback public will be to increase customer satisfaction, the longer term goal of maintaining a sustained relationship with those customers is invaluable for online businesses.
Bill Cawley is the founder of Feefo, the independent customer feedback forum for online businesses.