Guest post – If you don’t look after your customers, someone else will

We caught up with Jamie Challis, UK Director at Findologic to understand how on-site search is changing and why it remains a keystone for delivering customer experience online at a time when, due to the acceleration of digital in the wake of covid-19, shopper expectations have never been higher.  Here’s what he had to say:

Once, customers had no choice, either they bought what they needed from your shop, or they went without, if anyone can remember that far back. Today, it has never been more competitive for retailers and brands, not simply in terms of other rivals, but in terms of the number of channels that customers can buy through. Social commerce is now a reality and the likes of Facebook are pouring millions in to making it happen. Or marketplaces, where retailers give up 30% of sale price just to get access to new markets, because it is quicker or cheaper than building local web or store assets.

And so, brands spend big on acquiring new customers through their existing store and web channels as well as all the emerging ones. That cost is rising, partly because of the need to reach consumers through so many channels, but also because brands selling direct are driving up the costs and saturating the digital airwaves. That’s only going to get worse, and customer acquisition costs (CAC) have been rising every year for more than 10 years. And right now, as stores reopen and retail gets back to ‘normal,’ the investment to shift a huge backlog of inventory will rocket, which is bound to eat into margins.

If customer lifetime value was keeping pace with CAC then all well and good. It is well known that it costs at least five times as much to acquire a new customer as to keep one you’ve got already. But it isn’t. CAC just keeps going up and holding onto customers gets harder and harder.

Retailers are embracing a range of solutions that all work – remarketing, added value content, personalisation of communications, offers and so on, but almost all these techniques are what we call push rather than pull. They do not really take account of what the customers is doing right now or trying to do on your website.

So, while all this marketing outreach is flying around, most of which is ignored or unseen, the customer themselves may well be on your website, unrecorded and unloved. If this sounds a bit dramatic, the fact is that at the initial stages of search for new potential customers, it is the customer who is doing most of the work. And you may know actually know that they are struggling and not finding what they want.

The problem is all down to the limitations of on-site search, the famous button that is so often hidden away. The technology behind the button has barely changed in over 10 years and most companies simply use standard out of the box options. Returned results are broad and non-specific, so that a search for an iPhone returns results for all iPhones, iPhone accessories, iPhone deals, iPhone tutorials, and probably competing brands that the retailer is keen to promote. The consumer’s attempt to refine the search might prompt a chatbot pop up, but the search results themselves will not improve.

It is at this stage that a potential customer often gives up and goes somewhere else, often prompting some automatic remarketing by the retailer, even though the customer has already decided that they can’t help. So, a potentially good investment in CAC has been followed by a bad investment. The customer meanwhile goes to a competitor, or phones a friend or goes into a phone shop or pops onto Amazon. It’s not that you had them and lost them, you never really had them in the first place.

Of course, what should have happened is that the customer was helped right through their journey with intelligent, responsive search that asked the customer questions and then refines on the fly. Artificial Intelligence is now being applied in search to more quickly understand shopper intent – what the customer is actually looking for, like a digital assistant but a world away from bots which are hampered by the fact that can only access a limited amount of information and cannot learn so therefore cannot improve.

“The route to loyalty and lifetime value must therefore contain intelligent search, right at the point where the retailer can offer this capability. This approach pays for itself in terms of conversion but also boosts life-time value and enables investment in other areas of CAC to be reduced. It also complements retailers’ attempts to personalise their communications, something that became very important during lockdown as consumers found they needed more help from their favourite brands than ever before.

Brands that not only said they wanted to help but were actually able to do so, will be able to count on their customers’ loyalty as the retail landscape continues to change and more and more business shifts online.”

Jamie Challis, UK Director at Findologic

To find out more on how retailers and brands can sell more by enabling their customers to find what they want more often and more quickly, download the full report: https://www.findologic.com/en/whitepaper-findologic-market-report/

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