The rise of Black Friday
Although originally a US-only event, Black Friday is rapidly establishing itself as a key date for the UK retail industry. Hundreds of thousands of shoppers visit local high street stores, hoping to snap up a bargain, while many more try their luck online.
And although Black Friday provides a massive boost to sales figures for the year, the one-day sale is a deviation with few ongoing benefits. By improving their experience, you can encourage customers to come back throughout the rest of the year too.
Generally, the massive discounts offered on Black Friday are unsustainable year round. But the modern shopper is not motivated by price cuts alone – experience is of increasing importance in the purchase decision making process. For example, did you know that:
70% of customers would pay more for a better customer experience.
Converting just 1% of shoppers to repeat purchasers could generate as much as $39 million in additional revenue per retailer.
A 2% increase in customer retention has the same effect as decreasing costs by 10%.
The evidence is clear – as much as they love a bargain, customers are actually willing to pay more for your products and services if you can deliver an improved service. The Black Friday rush masks another important fact – encouraging your existing customer base to keep buying from your business is far more profitable than constantly trying to attract new first-time buyers.
So what can a business do with this information?
All about experience
As Black Friday approaches, savvy shoppers will already have some idea of the items they intend to purchase – and from which retailers. How? Through a combination of traditional advertising, direct email offers, recommendations from consumer experts (like moneysavingexpert.com) and word of mouth with online and offline social networks.
Unless businesses are shifting end-of-line stock, or specially sourced low margin goods, there will be little differentiation between them and their competitors. And if customers look closely, they will notice that most of the special prices fall in a very narrow range, with retailers struggling to maintain at least some margin.
At this point other factors like customer experience will come into play when making a purchasing decision. It is vital then that businesses have all the tools in place required to deliver a great customer experience, and that they continue to do so throughout the rest of the year. A business with a reputation for delivering a great experience will naturally be more desirable to a customer trying to choose where to make a purchase – even in the chaos of a Black Friday sale.
Customers hear about great service from their friends and family, encouraging them to “try out” new retailers. It’s this word of mouth that brands need to tap into if they want to improve sales year-round; between 20% and 50% of all purchasing decisions are made on the back of a personal recommendation.
If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.
Jeff Bezos, Amazon.com CEO
Service is key to keeping existing customers
Customer loyalty is an increasingly rare commodity, so businesses need to work increasingly hard to encourage repeat transactions. Any additional investment in improving loyalty will pay off however, as businesses need to find between 5 and 7 new customers to generate the same returns as one repeat buyer.
In the age of social media, it is easy to believe that customers only write negative reviews of their experiences, but again, statistics prove this is not the case. 61% of customers write reviews online to document their good experiences, as opposed to 52% who do so to criticise.
If you’ve ever wondered where your lost customers went in the past, the answer is probably to a competitor who offers a better experience. 40% of people began shopping with a competitive brand because they had heard about their reputation for great customer service. Logically then, great service will help attract new customers – especially if you can deliver it during one of the busiest, most fraught periods of the year.
Marketers in the United States and Europe must bring in 5 and 7 shoppers, respectively, to equal the revenue of 1 repeat purchaser.
- Adobe Digital Index
How to improve online service
Much of the ecommerce buying cycle is self-service – customers research, order and pay for goods without assistance, leaving businesses to fulfil delivery. But in practice, things are rarely this smooth.
59% of all shopping baskets are abandoned before a customer completes their order, indicating that there are fundamental problems with the purchasing process. So what are these problems and how can they be mitigated?
The promise of instant gratification has made time-poor shoppers increasingly impatient with ineffective websites. Repeated studies show that users will wait no longer than 2 seconds for a page to load, and are similarly impatient when it comes to finding information.
Between 20% and 40% of shoppers leave a retailer’s website after looking at just one page. There are numerous factors at play, but the time it takes to load a page is extremely important.
People will visit a website less often if it is slower than a close competitor by more than 250 milliseconds (a millisecond is a thousandth of a second).
- Microsoft research
Websites come under tremendous pressure on Black Friday, with huge brands like Currys, Tesco and Argos experiencing website crashes in 2014. But it is not enough that your website has sufficient scalable capacity to support a huge number of visitors simultaneously – it must also serve pages as quickly as possible. Web acceleration specialist Akamai found that a 300 millisecond (1/3 of a second) improvement in page load speeds had an appreciable effect on revenue.
Having a fast and responsive site year-round is both profitable and a competitive advantage, while a slower site is a sure fire way to lose customers permanently.
Hard to find information
If you want customers to serve themselves, you must ensure that they have all the information they need to make an informed decision. The top reason for shopping cart abandonment, reported by over half of respondents, was the shipping cost for an order. Others were concerned by a lack of contact information, or a lack of clear postage costs.
These are basic details that could be easily included in the site content, yet many retailers still bury shipping information deep inside the FAQs – assuming they are published anywhere before the checkout process begins.
Including a search function goes some way to helping customers find what they need, but it also breaks up the journey between landing on your site and arriving at the product they want. By increasing the number of clicks required to find something, you also give shoppers more reason to click off to a competitor’s site where they can find products more easily.
It is vital that ecommerce sites carefully consider the information that clients will need, and make it as obvious as possible to stop shoppers going elsewhere.
The personal touch
Because customers expect their online experience to be largely self-serve, any facility that allows customers to communicate directly with a company representative will immediately raise their shopping experience above average.
And no matter how intuitive a site may be, or how much information is made available, there will always be clients who struggle. Adding live chat to a site allows visitors to have their questions answered in real time, giving your business an opportunity to connect on a personal level.
“Once a customer is able to connect with an agent, the customer's question or interaction is most often fully addressed.”
Customers have questions, and the ability to answer them personally, in real time, is a massive step towards creating a memorable experience. These experiences are the sort that get customers talking, and encourage them to return in future. As pointed out earlier, 40% of customers first move to a competitive brand because they have heard the experience is better.
High street shopping is inconvenient for many buyers, but they also believe that a bricks-and-mortar showroom will be able to answer product-specific questions in a way that web content cannot. And there’s a good chance that you can’t address every customer query in advance. So, it makes sense to include some kind of question-and-answer system that allows them to get the answers they need – when they need them.
Black Friday is typically hectic, with thousands of shoppers looking for a bargain. Live chat functions offer an additional incentive for visitors to pause on your site, and an extra opportunity for your sales team to reach out and close the deal.
A golden opportunity this Black Friday
There is an abundance of research proving the importance of customer experience, but British businesses continue to ignore the signs. The Institute of Customer Service notes that general customer satisfaction levels peaked in 2013 at 78.2%, but have declined every quarter since. The fact that great customer service is becoming increasingly rare makes it noteworthy – precisely the sort of brand differentiator that your customers and their social networks talk about.
“A recommendation from a trusted friend conveying a relevant message is up to 50 times more likely to trigger a purchase than is a low-impact recommendation.”
This presents your business with a golden opportunity to buck the trend and deliver a market-leading customer experience. Black Friday is notoriously busy, making it difficult to properly balance the needs of many more customers than you’d serve normally. But seeing as every retailer struggles on Black Friday, those who exceed expectations stand to reap the rewards of increased sales and repeat business.
After all, the financial success of your company rides on year-round sales, repeat business from satisfied customers and word-of-mouth recommendations from those clients you have managed to delight.
“The type of experience you want to deliver should be profitable to your organization. Delivering an exceptional experience isn't always cheap and while your experience should always be focused on the customer, it should also be focused on improving the bottom line. After you've identified your priorities, ensure that by elevating your customer's experience you'll realize additional revenue and profit."
Lior Arussy, Strativity Group
The difference between average, good and exceptional sales results is directly related to the service your customers receive. So for the best Black Friday ever, ensure that your site has the information your customers need, along with a live chat function that allows them to connect with your staff directly. Nothing can answer customer queries as a quickly and effectively as a human.
Investing in a live chat solution like WhosOn helps inject a personal touch into the buying process, allowing customers to get much needed answers in real time. According to NM Incite, 33% of customers would recommend a brand that offered a quick, but ineffective response – far higher than the 17% who would prefer a slow but effective answer to their query.
With live chat you can connect with multiple customers simultaneously, providing speedy, accurate responses that will boost recommendations.
Live chat also allows your business to regain some control of the buyer’s journey, providing the input required to steer a customer towards a purchase, or even upsell other items. With a live chat session it becomes possible to steer visitors away from low-margin Black Friday deals, onto higher value alternatives that better meet their needs, helping to make your November 24th even more successful.
Despite being a stable, secure and reliable technology, live chat remains relatively rare on ecommerce sites. So, this Black Friday may be your chance to get ahead – and stay there too.