At a time when global inflation has become one of the biggest issues facing consumers – leaving them with less disposable income – maintaining “share of wallet” is critical for retailers. More than two-thirds of consumers are less confident in the economy than a year ago and 76 percent are spending less, trimming retail purchases – this, according to our study based on a survey of 2,000 U.S. consumers who had purchased from a mass market retailer from February to July 2022.

The study analyzes the influence customer experience strategies have on weakening consumer spending habits amidst rising inflation. Net-net good experiences have a positive impact: After having an amazing customer experience, 88 percent are likely to make a repeat purchase, 82 percent are likely to recommend to friends or family, 68 percent are likely to join a loyalty program, and 63 percent said they are likely to write a positive review.

There are many factors that customers value. Brands must measure and act on customer feedback, break down silos between customer facing teams, and lean into digital channels to solve customer pain points and nurture customer favor during the economic downturn.

The Impact of Customer Experience on Consumer Spending

Struggling with inflation and economic uncertainty, 56 percent of shoppers indicated “value for the money” as one of the two most important factors impacting their loyalty to mass market retailers. The survey also reinforced the fiscal benefits of customer retention and keeping existing customers happy. Ninety-one percent of consumers shop at their favorite mass market retailer at least once a month, with 83 percent spending $50 or more on average.

At the same time, retailers that delight first-time shoppers can also benefit greatly. Three-quarters of consumers who tried a new mass market retailer for the first time in the past six months shopped there more than once, with 90 percent of first-time shoppers making purchases at least once a month thereafter.

To the retail customer experience victors, go the spoils; but a negative customer experience can send shoppers packing. Reasons that consumers were likely to stop purchasing from a retailer included: if a customer service issue isn’t resolved in a single attempt (62%), if unable to communicate on their channel of choice (57%), if forced to repeat themselves (55%), and if they have to endure long wait times (50%). Customer patience has been depleted and there are competitors eager to take advantage of any less-than-great experience.

Modern Digital Channels Must Take Center Stage in Customer Engagement Strategies

Email, phone and in-person interactions are the most commonly used channels for brands to interact with their customers. However, our research found that customer interactions are increasing most on modern digital channels, and as customer journeys become more complex, it’s important to develop effective omnichannel strategies to cover all bases.

Opportunities for digital engagement are not being optimized; 62 percent of companies have websites, online communities, or digital forums, but less than 15 percent of customer interactions happen there, and it’s a similar story for messaging and social.

Meanwhile, overall customer interactions are growing in volume; 82 percent of respondents say their interactions are increasing on at least one channel. Modern digital channels saw the most frequent reports of volumes increasing, with social media (61%), chat (56%), messaging (56%) and website, online community, or forums (54%) the top four. There’s room to expand the number of conversations across those four channels, with the average percentage of customers interacting with companies less than 16 percent.

At a time when customer retention is extremely important, concentrating only on the traditionally most popular channels such as email, phone, and in-person, is not an option. With only around one-third of people surveyed saying their company is looking to add chat and messaging in the next 12 months, companies could be missing the chance to engage customers via these increasingly popular digital channels. Automation will be the key to engaging on these channels at scale and managing the increasing volume of customer interactions.

Marketing Technology News: MarTech Interview with Michael Luckhoo, Co-Founder, Cirus Foundation

Measuring Consumer Behavior

Not only is providing amazing experiences likely to generate higher revenues through repeat purchases, but great customer experience is also likely to lead to more referrals and grow a company’s loyalty program.

The first step is understanding exactly how a company can deliver standout omnichannel customer journeys and ensure they keep the share of wallet at times of economic hardship. Then companies can pinpoint which areas of their customer engagement strategy are working well, or badly, and act swiftly to make any required changes.

This is where collecting customer feedback in real-time becomes critical. Gathering customer insights in the moment enables retailers to take immediate action, often through customer self-service or a hand over to a contact center employee for assistance. Real-time digital feedback data means issues can be identified and handled early, on a micro and macro level, before becoming widespread.

Automation also plays a key role in the delivery and analysis of customer insights. Companies can drill down into the recurring customer issues and identify areas for improvement across each touchpoint and channel. With the level of automation growing for 8 in 10 companies, ensuring it’s deployed on the right channels, for the right use cases, will be key.

Eliminating Silos and Unifying and Empowering Both Humans and Bots

Once a company can gather and analyze customer behavior across multiple channels and act on the findings, the next step is to create an engagement strategy that allows the entire workforce to engage with customers appropriately and effectively.

Offering engagement on a customer’s channel of choice is only half the battle. If a consumer gives their details to a bot over messaging or automated phone system but then must repeat the information when interacting with a human employee, it creates a negative experience and can affect customer retention rates.

Taking a “One Workforce” approach is critical to providing a consistent experience across multiple channels. It is a unified approach to customer experience management, bringing together engagement channels, teams, and data that have all previously operated in silos.

One benefit of a One Workforce approach is a high-quality customer experience, no matter what channel is used or what type of employee (human, bot, hybrid) handles the engagement. Other benefits include the amplification of workforce efficiencies through an any-agent/any-channel workforce, and the improvement of scheduling flexibility and onboarding of additional channels as well as shared services and hybrid workforce models.

Ensuring Retention of Loyal Customers Through a Better-Connected Workforce

A tough time for consumers means a tough time for brands. Building positive experiences will help ensure customers stay loyal in lean times. Strengthening customer loyalty hinges on hybrid engagement strategies coupled with modern working practices, ensuring the entire workforce has the right tools and engages with customers in the right way, at the right time.

Marketing Technology News: SMS Marketing – An Overview for Modern-Day Marketers

About the Author

Jenni Palocsik is Vice President, Marketing Insights, Experience and Enablement, at Verint.