Customer Learning Curve


Customers_vs_Buyers
The headlines are filled with the cheer of earning curves around the holidays.

It is particularly intense this season as retailers look to digital experiences as a path to supplement the in store sales. Where items might be in short supply at any one brick and mortar place, the online inventory can fulfil demand in most cases.

Ironically, well-engineered digital experiences are better than in store when they remember who customers are, their product preferences, and buying patterns.

Customers are, in fact, blurring the line between in store and digital.

Given the right incentives and with varying degrees of transparency,
shoppers have become somewhat accustomed to trading their digital
footprint (and resulting data) in digital and social networks in
exchange for additional access and discounts.

Customer learning curve

Online retailers spend nearly 80% of their digital marketing budgets acquiring shoppers (new visitors) when in the US, 40% of revenue comes from returning or repeat purchasers, who represent only 8% of all visitors [source: Adobe Digital Index].

The impact of existing customers becomes more pronounced during the holiday season. Clearly, budgets and revenue contribution are not aligned. The report also found that repeat purchasers deliver more during economic difficulties.

From the report:

Although the data does not reveal the reasons behind their superior performance, we surmise the reasons include greater familiarity with the retailer’s brand, its products, and website; higher trust and confidence that items purchased will arrive as promised; and lower levels of transaction friction (accounts, passwords, shipping information, and so on).

Additionally, companies that personalize the customer experience have much more data with which to personalize for returning and repeat purchasers than they do for shoppers.

Investing in making the digital experience a memorable one by capitalizing on insights and knowledge of existing customers buying preferences and patterns can greatly accelerate a company's learning curve.

This is one of the reasons why I often hear "we want to be the Amazon of 'XYZ' industry" in my conversations with marketers. However, in many organizations much customer insight and brand knowledge is still locked into the interactions that individual business units have with site users.

Corporate sites grow that way, too. New pages or tabs are added to take on new requests, or when the company adds a new product line. Every time there is a change in corporate structure, the organization forgets what it already knows and (often as a result) the customer digital experience changes.

It takes a significant drop over the course of time to realize. By then, competing brands have filled the digital experience void.

What is the cost of the customer learning curve to your company?

 

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Valeria is an experienced listener. She is also frequent speaker at
conferences and companies on a variety of topics. To book her for a
speaking engagement click here.


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