After the Sale: Moving From Transactional Relationships to Engaged Ones

Shopping behavior has changed. Today, online, mobile, multi-screen, and multi-tasking are intrinsic to consumer lifestyles. An overwhelming number of purchase decisions are being made based on new sources of information, online social interactions, and real-time data and promotions. Additionally, customers expect brands and manufacturers to continue to provide support and product information across the entire lifecycle of the product.

The good news is that on the back of this tough task is an opportunity. With the increase in consumer touchpoints, retailers can bank on going beyond short-term transactions to build long-term relationships.

Savvy retailers are investing in processes and technologies that help them build mutually beneficial relationships with their customers. Retailers are aiming to increase the number of transactions, improve wallet share, build revenue, create depth of relationship, acquire valuable feedback, and strengthen loyalty levels. Meanwhile, consumers expect to be charmed through personalization, be delighted by superior engagement, and wooed by surprises.

Customer experience is no longer limited to the store environment, the salesperson’s knowledge of product and customer needs, product variety, and individual transactions. Customer experience itself is being redefined, moving from transactions to lasting relationships across all retailing channels. This shift heralds an era where marketing is broadening its scope from the narrowly-focused short term, to the wide-open long term.

The question central to retailers is: What determines the success of relationships? We believe relevant, one-to-one conversations, and delivering rich content across channels that the customer is comfortable with, hold the key to building successful, long-term, and engaging retail customer relationships. Throw in a good measure of “delighters” and unexpected personalization, and you have a winning combination.

While there are several variables and parameters to consider in an overall retail strategy for customer engagement, it helps to understand where retailers are succeeding, and where they need to bring in additional effort and investment.

Conversation starters: get social
A customer engagement study by the Acquity Group examining Interbrand's 2012 Best Retail Brands suggests that retailers have a long distance to cover in social media.

The study found that every brand except one had a Facebook page, and 45 out of 50 are on Twitter. However, a mere 12 brands were found across the five major social channels (Facebook, Twitter, Instagram, Pinterest, and YouTube). Twitter usage was the most lacking. While 90 percent of the brands had adopted Twitter, less than 27 percent actively held conversations with their customers. It doesn’t take much to guess that the prognosis is not good.

The hard truth is that holding engaging, one-on-one conversations with customers isn’t easy, and can, with inadequate customer insight, lead to embarrassing situations. To overcome this, retailers need to undertake measures that integrate customer data and extract insight to assist in conversations that build long-term engagement.

For example, a retailer may want to leverage a customer’s profile, purchase history, loyalty data, wish list, brand preferences, CRM data, and social network data before engaging in a conversation. That's not easy, but it's necessary.

For decades, marketing has focused on transactions: goods for money. Now, it must focus on customer engagement where transactions are not central. Instead, inducements, which keep the conversation alive, hold the key.

We know from our own experience that frequent, relevant conversations bring people closer and foster lasting relationships. That is equally true for customer relationships in retail. The higher the quality of the interaction, the better the relationship. Social media is a great enabler of such lasting, highly-engaged relationships.

For retailers, social media is important in other ways as well. A study found that 78 to 84 percent of consumers rely on their social networks when researching new products. Every retailer must therefore have an ear to social media -- we call it social listening skills (and we have sense-making tools that bring order and intelligence to online conversations). Retailers need to substantially enhance their social listening skills before they can move on to their social interaction capabilities.

Go multi-screen
Get ready for the next wave of customers. Next year, the entire generation of youngsters turning 18 would have been born in the year Amazon went online. For them, being online, being connected over multiple devices, and multi-tasking are all part of their digital lifestyles. Retailers will soon begin to invest in multi-screen strategies and content, and create a seamless experience across these devices where they hold their conversations with their customers.

A multi-screen approach for retailers may appear like overkill. But there is ample research to back the strategy. A Forrester study found that:

Tablets are displacing PCs and smartphones as the 'couch computer’ of choice: 85% of US tablet owners use their tablets while watching TV, and, according to Nielsen, 30% of total tablet time is spent while watching TV. The tablet’s complementary nature to the living room TV gives a raison d’etre to “second screen” apps such as Miso, GetGlue, and Viggle that engage consumers in conversation and content related to what’s on the big screen.

What does all this tell us? Perhaps the loudest message is that it's critical to embrace technology to create long-term engagements and relationships with customers. But the most obvious message is that today, retailers have the tools to enable those relationships. That, without doubt, is a comforting thought.

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