An NRF Foundation survey finds that most retailers are investing in CRM and most customers are satisfied with their service experience.
Posted Nov 29, 2004
Whether they shop at retail stores or on the Web, customer service is important to nearly all consumers, according to a comprehensive national survey on customer service conducted by the NRF Foundation (an arm of the National Retail Federation), and American Express. In fact, according to the survey, 99 percent of shoppers said that customer service was at least somewhat important when deciding to make a purchase.
"CRM starts and ends with customer service," says Daniel Butler, vice president of retail information for the National Retail Federation. "You have to remember that in most midsize [or larger] markets, I can go to any store in town and get about the same price. What makes a difference is that I get what I need when I need it, that's what makes [a seller] a retailer of choice."
Butler adds that 69 percent of retailers have CRM systems in their budgets, up from 50 percent two years ago. To be effective, however, these systems have to help provide increased levels of customer service.
Better customer service also helps make the CRM systems better, according to Butler, who says it's important for retailers to collect information from customers, and to correct information that may be incorrect (e.g., a new address or phone number). In today's privacy-conscious world, however, it's also imperative that customers be told why information is being collected: Sometimes that data is collected for marketing purposes; other times retailers ask for information to confirm that a payment card belongs to the holder and hasn't been stolen.
Although many retailers have continued to focus on customer service in their stores, many shoppers have been lukewarm about their most recent customer service experiences. According to the survey, just 16 percent of traditional shoppers were extremely satisfied with their most recent customer service experience; an additional 51 percent were very satisfied. In contrast, online shoppers were almost three times as likely to be extremely satisfied with their customer service experience (44 percent), and an additional 45 percent were very satisfied.
The most important elements of good customer service to traditional shoppers revolve around retail employees and the store environment, according to the survey. Nearly two thirds of shoppers feel that it is extremely important for retail employees to be courteous (67 percent) and to treat shoppers like valued customers (65 percent). Consumers also dislike being pressured to buy merchandise (69 percent), and find it extremely important that employees are available to ask for help (61 percent).
"These are all basics," Butler says. "You also have to look at what you're going to do to be prepared to better serve them the next time, as well."
Much of that has to do with good customer data, which should be in a system that the retailer can access. Too often CRM information resides in a different part of the enterprise (e.g., accounting), where the customer-facing side of the business has no access.
Though the benefits of superior customer service can be great for a retailer, the ramifications of low-grade customer service are severe. Traditional shoppers were more likely than online shoppers to tell others about a negative shopping experience (70 percent versus 64 percent). On average, traditional shoppers who had a bad customer service experience told 3.1 people, while online shoppers told an average of 2.8 people about their bad experience.
Most consumers who have a positive customer service experience will also talk about it. Online shoppers were more likely than traditional shoppers to tell others about a positive experience (73 percent versus 66 percent). Online shoppers told an average of 2.7 people about a positive experience, while traditional shoppers told 2.4 people about their good experience.
"Consumers like to share the highs and lows of their shopping experiences with family and friends," says Katherine T. Mance, NRF Foundation vice president. "It's no stretch to say that a single customer-service experience, whether positive or negative, affects a retailer's sales from a variety of consumers, not just one."
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