In my last article, I revealed why loyal shoppers defect. Since just one of any retailer goals is to prevent defection before it occurs, we took a deeper dive into this problem. In particular, we sought to understand the negative experiences of loyal specialty pool retail customers (or "Loyalists"). Since these customers have not yet defected, recognizing problems ahead of time could lead to action to prevent their loss. To start, we sought to understand how many Loyalists would even disclose they had a problem—so we posed this question:
7 percent of Loyalists are having negative experiences in your store!
Yikes! Almost 1 out of ten Loyalists tell us they have had a negative experience. It’s also likely many didn’t even bother to let us know. While 7 percent may not seem like a lot, imagine if 7 percent of your mail did not arrive, or if your business declined by 7 percent each year. This 7 percent represents a portion of your most loyal customers, so the incremental dollar value may be even more painful. And it is worse for Nonloyalists: 18 percent report a negative experience while shopping at a specialty retailer. Could this be a reason why your store does not have more Loyalists?
The number 1 complaint: bad advice
Of course, we had to ask these customers more. For each report of a negative experience, we asked them to briefly explain. The result was that 78 percent of negative experiences by Loyalists had to do with a missing ingredient in the “secret sauce.” And 50 percent of all negative experiences related to one category: bad advice! Yikes again! As previously reported, applied knowledge is a critical ingredient to the “secret sauce.”
Just for the record, price showed up in the remaining 22 percent of all negative experiences, so it was clearly secondary.
Many retailers have told us they are very good at resolving problems with customers. So it was natural to ask this customer group how satisfied they were with how their issue was resolved. Here is what they reported in our survey.
Wow! Only 11 percent of Loyalists were extremely satisfied with how their negative experience was handled. And a whopping 0 percent of the Nonloyalists reported being extremely satisfied. This is a huge gap in how retailers are identifying and handling problems. With so much at stake, measurement of customer experience and complaint resolution is essential. Yet our understanding is that very few swimming pool retailers have a defined process for measuring and tracking customer problems, let alone understanding what created them. Once again, the idea that retailers would rely on intuition for something this important makes very little sense.
Your turn
Understanding and resolving customer problems successfully is critical to building and maintaining a loyal customer base. How do you see this? What thoughts and experiences can you share in this area? What are you doing to be certain you have a solid and consistent knowledge foundation for your employees? How do you know that they can apply this knowledge?
