Ragtrader recently partnered with Arkade and Shopify Plus to host a panel on customer experience (CX). It included executives from Munro Footwear Group, The Iconic, Alceon Retail Group, Surfstitch, PAS Group and Showpo. Here are three tips to get you started.
1. Know who your most valuable customers are
Retailers draw a majority of high-value sales from known customers. For PAS Group, 76% of group wide transactions are from this set while Surfstitch attributes this figure at 80% and Munro Footwear sits at over 60%. Arkade co-founder Danny Phillips urged businesses to re-evaluate their service and experience strategies, ensuring known customers are high on the priority list. "There's a common stat that seems to stack up. The top 10% of customers by value represent about 40-50% of all sales. And the bottom 50% of customers, represent only 10% of sales. They add a lot of effort and numbers and bulk to your system, but most of your money is coming from a tiny portion of customers."
2. Don't get caught up on the short-term
Capabilities over campaigns is the mantra for long term success. Showpo CMO Mark Baartse said while campaigns help to drive revenue, the bulk of business is drawn from day-to-day operations. He first realised this in a marketing role at Microsoft almost two decades ago. "Everyone was praising the almighty campaign, the holy golden cow. I'm looking at the data and the campaigns are about 5% of revenue and business as usual (BAU) is about 95% of revenue." The Iconic chief category manager Mareile Osthus agreed. "If you look purely at revenue and Google search traffic, the biggest campaigns are initiatives like Click Frenzy. But we look a lot at what the top searched brands and categories are in Australia and work on it year-round."
3. Personalise, excite and innovate
Ok, so now you know your top known customers. You know that driving capabilities is at the core of a good CX strategy. What next? The fun stuff. PAS Group head of digital Anna Samkova revealed the inner workings of Review's top-tier loyalty program, The Dress Circle. It rewards customers with invitation-only events, shopping activations and custom-made products. It's so successful, it's beating all expectations. "A year ago, based on all the research we'd done, we identified that our high-value customers spend in excess of $5000 plus a year with us," Samkova explained. "At the time of the launch, we only had 452 customers in this category. We put them in a separate tier – a secret tier - and we didn't announce it to anyone, it hasn't been launched anywhere and we didn't communicate it to anybody. We now have 600 people who are forecasted to bring in revenue of $3 million this financial year."