Forrester Wave Report
Leslie Stretch, Medallia CEO, and Borge Hald, Medallia Founder, Reflect on Being Named A Leader by Forrester in The Forrester Wave™ Customer Feedback Management Platforms, Q4 2018 Elena:...
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Transaction-based businesses have it tough. Compared to subscription-based businesses — where the default is for relationships to continue — there’s far from any assurance that the customer who walks in your door today will be back for a second date.
But is this actually true? Even in this age of ready online reviews, where product comparisons are made astonishingly simple, there are transactional-based brands to which customers continue to return again and again. Tory Burch, Mercedes-Benz, and Amazon come to mind. For all intents and purposes, they have an actual relationship, oftentimes more meaningful than some of those subscription businesses.
Traditionally, transactional businesses have tried to obtain customer love by instituting loyalty programs, but there’s an opportunity to take this further. Take Valentine’s Day as an opportunity to build your customer relationships so that customers within your space turn to you again and again, and your relationship becomes a match.
Here are three ideas to get you started.
Amazon is the prime example for this idea. It doesn’t necessarily provide the lowest cost on all the products it sells, but it certainly provides one of the most frictionless experiences out there. Having thousands of items almost always in-stock, no lines to wait in, a simple and easy process for returning items, the guarantee of fast shipping with Amazon Prime, and immediate access to thousands of product reviews mean that Amazon has become the default one-stop-shop for nearly all household products.
In a transactionally-oriented business, the focus is on providing a pleasant customer experience for just that single transaction. You can see this mindset at work when you enter a high-end retail store. Sales associates greet you with a smile as you enter and ask if they can help you. They may help you make your purchase decisions, and accompany you all the way to checkout. This is a great experience, but it does not immediately lend itself to long-term relationship-building beyond, perhaps, a store loyalty card.
But these brands often take it further. Apart from providing an excellent in-store experience, Tory Burch establishes a relationship with its customers that survives beyond the one transaction. Store associates have ready access to tablets with “Client book” installed, which provides information on a customer’s past purchases, wish lists, and other customer data, shattering the barrier between online and brick-and-mortar, allowing associates to make the store experience as personal as possible. The Client book even alerts stores to customer birthdays so that they can send personalized greetings. Rather than merely creating an extraordinary one-off experience, Tory Burch establishes an on-going conversation with the customer that is renewed every time the customer touches the brand.
Not even the best companies deliver excellent customer and product experiences all the time. For transaction-based businesses, there is always a risk that customers will simply choose a similar product or service from a competitor whenever they’re disappointed. Unlike actual subscriptions, they can’t just lock their customers into a contract to prevent abandonment. Apart from building the kind of relationship with the customer that Tory Burch does, transaction-based businesses should provide disappointed customers with another option other than just abandonment — give the customer a chance to provide feedback, and then use the opportunity to close the loop on that feedback. Every time customers explicitly tell you why they’re unhappy with your business, they are providing you with a lifeline to keep them with your brand. Make these channels as easy and frictionless as possible for the customer to access, and make an effort to reach out when they do.
Subscription businesses often turn to transactional businesses like those in the retail industry for innovation. While it’s great being single, the rewards of investing in the relationship with your customer can be great.