5 Experience Predictions for Retail in 2019
In the retail industry, one that’s known for its ability to continually reinvent itself and find new ways to connect with consumers, the huge shift in consumer behavior from physical...
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No matter how good you are at what you do, there is friction in your business. Friction that stands between your customers and what they want.
Where is that friction? And how much is it costing you?
Customer expectations around the availability, immediacy, and ease-of-use of what they purchase have never been higher. Maybe it’s our growing culture of instant gratification or all Amazon’s fault, but any steps in the customer’s journey that are perceived as less than seamless are likely to cause some level of frustration. The name for these places of frustration in the customer’s journey? Painpoints.
These painpoints can take any number of forms and levels of severity. Some might already be obvious to you, and others nearly invisible to you. They could include product defects, unengaged employees, or long wait times. However big or small, though, they are bad for business. The more pain you create for customers, the less they’ll spend with you, and the more likely they are to switch to one of your competitors.
Perhaps no one knows this better than the ecommerce industry. As both the culprit and battleground of increased customer expectations, competition on the Internet is tough, and the opportunity for painpoints numerous. Take just one of those potential painpoints as an example: page load time. Kissmetrics reports that even just a 1 second delay in page load time could reduce conversions by 7%. Oh, and let the page load 2 seconds longer, and you’re looking at an abandonment rate of 40%. Each of these exits represent significant lost sales opportunities.
As one of the largest mobile payment processors in the world, PayPal is vulnerable to exactly these kinds of customer painpoints. Given the threat of competition — both for their merchant and consumer businesses — and the relatively low barriers to switching, they realized that minimizing these painpoints is paramount to reducing churn and realizing the lifetime value of their customers.
In order to do so, they actually started measuring customer pain. They created a metric called the Customer Effort Score, which let people rate the ease (or pain) of each customer touchpoint, and then used the results to identify top painpoints across the PayPal business — and prioritize action. In 2013 alone, they identified 20 of these issues (which included dissatisfaction with fees, the need for stronger protection policies, and a desire for greater access to relationship managers) and quickly started working on the path to long-lasting solutions. Through A/B testing, they were able to develop fixes in a cost-effective way before rolling them out across the organization.
Guess what? Customer pain went down. This was apparent through satisfaction scores as well as the 40 million fewer issues customers filed with support — a big win for their cost to serve. But perhaps the biggest win from reducing painpoints: a $2 billion increase in transactions. Even for PayPal, that’s a lot of money.
With the success of this program, PayPal is now committed to reducing friction throughout their organization, and they continue to reap the rewards by literally building a brand on simplicity.
Want to know how they did it? Download the case study below.Photo credit: Gunnar Grimnes