We all know that customer experience is becoming more important than price and product when it comes to loyalty. And the businesses who prioritize customer experience are the ones that are succeeding. The question becomes, when that awesome customer experience begins to pay off, how can you continue to execute on a high level of service without hiring an army of people, or sacrificing the human touch? AI and automation can help you scale.
Make the Agent’s Job Fulfilling
Many folks still think of AI as a threat to their jobs….as robots taking over the world! Despite the doomsday rhetoric, the fact is that current day AI can actually make customer service professionals’ jobs less time consuming and simultaneously more fulfilling.
Oftentimes the most tedious tasks on an agent’s plate are manual and repetitive, and may not require human intervention. Luckily AI can automate much of this work. For example, when an agent needs to initiate a return, they may be talking to a customer in one system, looking up a customer’s order history in another, and using a third system to create a return management authorization (RMA). A fourth system may send a message to the person who handles those returns asking to expedite for an important customer. With AI and automation, a single button click could start the RMA process, create the shipping label and notify a team to expedite.
Let Customers Help Themselves
Businesses also have the opportunity to provide more self-service opportunities with the help of AI. Think about chatbots. They are growing in popularity with both businesses and consumers, and can be used to collect initial information and direct customers to a help center if human intervention is not needed. While there is always fear of losing personalization when using AI and automation, with the right data, businesses can actually do the opposite. For instance, if a business leverages customer data properly, chatbots could ask personalized questions based on an individual’s purchase or browsing history. These interventions save time for both the customer and agent, and increase the time spent on the actual issue rather than information gathering and low-level support.
Superpower Your Agents
Beyond freeing up agent time, AI can also be used to arm support agents with all the information they need to quickly and accurately service their customers. AI support technology can suggest messages to send to customers based off of historical conversations and customer attributes, which can become more accurate and personalized over time in conjunction with a machine learning model. Sentiment analysis is another benefit of AI technology. By looking at the words and tone in a customer’s messages, the technology can identify how satisfied, or dissatisfied, a customer is, and escalate the issue accordingly.
How We Can Help
For better or worse, solving a customer’s problem is no longer the only job of a customer service organization. Customer service is increasingly being thought of as a revenue driver and not a cost center, and customer service insights are being leveraged beyond the support organization to inform larger business decisions. Keeping a consistently high level of support as you scale your business could be the difference between rocketship growth and stagnancy.
All of this makes finding the perfect customer service software solution imperative. Delivering on growing customer expectations at scale, whether that means personalized and proactive support or true omnichannel experiences, is not optional. With Kustomer’s customer service CRM platform, businesses are able to have a single view of the customer journey, seamless omnichannel communications, and the ability to automate complex business processes and knowledge management.
Customers are gravitating towards brands that fulfill great experiences, leaving those that don’t in the dust. With this in mind, brands are beginning to realize that customer experience is directly tied to their revenue. According to a 2016 study by Forrester, superior CX drives superior revenue growth in industries where customers can easily switch to competitors that deliver a differentiated customer experience. Since then, 81% of organizations cite CX as a competitive differentiator and research continues to support the notion that more organizations are leveraging CX to gain an edge against their competition. By ignoring CX, brands are missing out on market share and revenue.
In this blog post, we share three ideas and concepts that will help you modernize customer experience and transform your CX organization from a cost center into a profit center.
Take a True Omnichannel (NOT Multichannel) Approach to Customer Experience
Many believe that the concept of omnichannel dates back to 2003, when Best Buy created a strategy that centered around the customer in order to compete with Walmart’s electronics department. At this time, retailers were starting to see online sales grow at a fast pace, especially for items that didn’t require you to touch them to feel confident in a purchase decision, such as electronics. All that was needed when it came to shopping for consumer electronics were specifications and dimensions of the products. Best Buy knew that since they could not compete with Walmart’s low prices, they would have to take another approach, one that focused on the customer experience both in-store and online, while providing superior post-sales support. This is where the concept of “customer centricity” was born, which is at the core of an omnichannel approach to customer engagement.
So what does a true customer-centric omnichannel approach look like in 2020? Let’s start by first explaining the concept of multichannel, which is often mislabeled as omnichannel.
In the diagram above, we have the typical multichannel model of customer engagement, where the customer reaches out through the channels of their choice. Each individual engagement becomes a “ticket” or “case”, with different customer support agents tackling each issue. This creates three main problems:
1. Each agent fails to recognize that their colleagues are working on the same issue, which in turn becomes an unnecessary expenditure of resources for the company.
2. The customer experiences inconsistencies with how their issue is solved, as each agent may have their own way of wording or solving the issue.
3. Unless the agents recognize that these tickets are from the same customer and take steps to merge them, reporting will be skewed, as there may be different response times, resolutions and CSAT scores for each ticket.
Now let’s take a look at what a true omnichannel customer engagement model looks like:
In this model, we are still meeting customers when and where they want to be engaged, yet on the back-end there is one major difference: each individual engagement shows up as one conversation for a single agent to respond to. This sole difference alleviates the three problems outlined above.
So how does a true omnichannel approach help turn your CX organization from a cost center into a profit center? According to Aberdeen Group, companies with extremely strong omnichannel customer engagement see a 9.5% year-over-year increase in annual revenue, compared to 3.4% for weak omnichannel companies. Similarly, strong omnichannel companies see a 7.5% year-over-year decrease in cost per contact, compared to a 0.2% year-over-year decrease for weak companies.
Differentiate by Appealing to Your Customers’ Emotions
Daniel Kahneman, psychologist, economist and winner of the 2002 Nobel Prize in Economics, introduced the idea of a dichotomy between two modes or systems of thought. “System 1” is fast, instinctive, unconscious, automatic and emotional; “System 2” is slower, more deliberative, calculated and logical. In these modes of thought, “System 1” dominates “System 2”, as it takes much less effort, making it the default system.
If you have ever worked in customer support, you will quickly notice that some customers may be disrespectful and downright nasty. But it’s important to note that none of these outbursts are personal attacks and are oftentimes the expression of frustration when it comes to solving their problems. This is an example of “System 1” thinking and the impact of this “System 1” thinking from your customers is a powerful double-edged sword. The reward or punishment for solving their issue is magnified by social media and online reviews. As Spiegel Research Center finds, nearly 95% of shoppers read online reviews before making a purchase. Each interaction will either create brand advocates for your company that will help bring in more revenue, or brand detractors that will bring negative financial repercussions. That being said, we can create more brand advocates if we meet customer expectations.
This begs the question: what does the modern day customer expect? Nowadays, customers expect their problems to be resolved quickly, effortlessly and empathetically. Essentially they want to talk to an agent that is a “System 2” thinker.
As a leader in your organization, it is imperative to set up an infrastructure that is designed to take into account the emotional component of the customer experience. Fortunately, modern day artificial intelligence (AI) methods such as machine learning, natural language processing (NLP), predictive analytics, deep learning, and multi-dimensional neural network mappings can be leveraged. These sophisticated technologies allow for functionalities such as customer sentiment analysis and automatic language detection. By considering how your customers are feeling, your organization can take appropriate action to ensure they leave the interaction happy and on their way to becoming brand advocates.
Streamline and Automate Customer Experience Business Processes
In a traditional CX technology ecosystem, customer data is siloed. Each individual system may require manual updates as agents work through each ticket or case. Reports will need to be pulled from separate systems in an attempt to get a 360 degree view of the CX organization. In this ecosystem of siloed customer data, we are not only pulling agents away from being in front of customers by requiring manual data entry, we are also compromising the integrity of our reporting and visibility into the CX organization. Ultimately, this is hindering our ability to be agile and adjust to changing customer expectations.
The solution to these problems caused by fragmentation is to consolidate your customer data into a customer experience platform that is capable of taking all of your customer data and making it viewable, searchable, actionable and reportable. Notice we are not talking about a helpdesk product, but rather a next-generation platform for customer experience, support and service.
With all customer data under one roof, business process automations can be leveraged to their full potential. Automations are no longer limited within each individual silo, but instead can impact the entire CX ecosystem.
As businesses are seeing a bigger impact on their revenue directly from customer experience, CX leaders need to ensure that their technology is up-to-date in order to stay competitive. The days of customers tolerating poor experience are over. Think about it—your closest competitor is just a 15-second google search away. As they should, customers expect more from us. Fortunately technology exists today to modernize your customer experience, build more brand advocates, and ultimately turn your CX organization from a cost center into a profit center. It’s time to take a good look at your organization and ask the tough question: is my CX organization built to deliver a modern day customer experience that will turn brand detractors into brand advocates?
Direct-to-consumer (DTC) businesses are upending entire industries and putting customers first. By cutting out the middleman and selling directly to the consumer, rather than through a retailer or third party, DTC businesses are exploring new ways to reach consumers with amazing and transformative customer experiences. But how do they do it?
Know the Customer History
Imagine having a conversation with a friend, but not being able to remember anything about that friend, or any interactions you’ve ever had with them previously. It would be difficult to have a truly personal or meaningful conversation. That’s how traditional retailers have historically interacted with consumers, with a large blind spot around customers’ preferences and behaviors.
Digital-first brands don’t have to deal with this problem. Every aspect of the online journey can be adjusted to meet customer needs, and with the right technology can be available to staff in a single view. You’ll be able to know a customer’s preferences, buying history, sentiment, previous interactions with the brand, status of their orders, even their preferred channels of communication. You’ll no longer be interacting with Customer #45634, but with a valued human being who feels heard and appreciated.
In-Action With Glossier
Hyper-popular beauty and skincare provider Glossier makes buying their products as intuitive and personal as possible. To replace the experience of trying on makeup at a counter in a department store, Glossier creates an immersive, digital journey. Customers can get a personal consultation from a member of the gTeam, who is prepared to provide all the support they might need over the channel of their choice, and has all the necessary context and information about their shopping history.
Solving for Decision Paralysis
The spread of e-commerce has created a paradox. In the heyday of big box stores, a huge selection of products and styles used to add value. Customers did most of their shopping in a physical space, as it was still faster, cheaper, and more accessible than shopping online. A large number of stores and a wide selection meant customers were more likely to shop and find what they were looking for. However, the near-infinite amount of choices provided by Amazon and other big box stores and marketplaces has flipped this notion on its head.
Now, customers are overwhelmed with choices. If you search the word “soap” on Amazon, you get over 60,000 results. Picking a simple product becomes paralyzing as you try to weigh price, benefits, ingredients, and other factors all at once. And having your product feedback heard or incorporated can feel hopeless.
Products Customers Want and Need
Focusing on a few good items done right, at a fair price point, is key to tapping into modern shopping trends, and encourages brand loyalty and repeat business by making products that become an essential part of customers’ lives.
Some high growth DTC brands, such as hair care company Prose and dog food company The Farmer’s Dog, even incorporate customer feedback into their product. Through proactively seeking feedback from customers, these leading brands ensure that both their products and service are exceptional, and they keep their customers coming back time and time again.
Additionally, DTC brands are able to use customer data to inform business decisions. If you document why customers are reaching out, you can use this information to optimize UX, make product or fulfillment tweaks, or even open a new store location.
Want to learn more about how high-growth DTC brands are standing out from the competition through CX? Download the guide here.
Customer expectations have evolved past closed tickets and short resolution times. To succeed in today’s ever-changing world, brands must take a customer-first approach to service and support. Here’s how to achieve it in four simple steps.
Understand the Emotions of Your Customers
Do you know what percentage of your customers are happy? Satisfied? Disappointed? Understanding the emotional state of your customers, and adding empathy to the conversation, makes the experience more meaningful, and agents can have conversations that truly help customers.
The top difference between a good agent and a great agent is their ability to express empathy. And empathy is enabled by sensing someone’s emotions. Sentiment scores within your customer service software should give your agents:
Updates and reporting in real time
The ability to segment customers by sentiment data
Sentiment-based workflow automations
By pairing sentiment data with the right agent skills, it’s easier to master the skill of mirroring to make customers more comfortable. Mirroring, even if doing something as simple as using casual terms as you would with a friend, can go a long way in building a customer relationship. A customer service agent must know the appropriate tone to use to calm frustration, convey understanding of the issue, and express empathy.
Encourage Actual Conversations
Enabling true, personal conversations requires a mindset shift from transactional support to conversational support. Conversational support, service and experience are methods of helping customers that focus on building a long-term relationship, rather than resolving a series of issues. Agents are there to provide real value, not just to solve a problem or process a transaction. They use context and conversations to make it easy for customers to get help while allowing agents to provide more personalized service at scale.
Embrace Omnichannel and Break Down Silos
Another feature of conversational support is channel flexibility. Think about how often your texts with friends or family turn into phone calls. In the same way, your teams need to provide omnichannel support for this type of asynchronous interaction.
Meeting customers when and where they want pays off. In fact, according to a Kustomer study, 88% of consumers get frustrated when they can’t contact a company on the channel they prefer. The brands that deliver omnichannel support (and also are flexible enough to continue conversations across multiple channels without losing the context) will win additional brand loyalty.
Don’t think it’s just “newer” channels like social media that need your attention, though. “Your business results depend on your brand’s ability to retain and add customers,” says Olive Huang, Research Director at Gartner. “You must win at every interaction the customer has with your organization, whether that be a marketing campaign, a call to a contact center, an invoice, or a delivery reliant on the supply chain. Every department must play its part in a coordinated fashion.”
The days of isolated call centers are gone. CX leaders need to partner and collaborate with other departments to make improvements throughout the entire customer life cycle.
Reinvent Your CS Titles and Hiring Process
Names are powerful things, and for customer service teams, names set the tone for customer interactions. An “agent” is a transactional term, ideal for reactive problem-solving. Many modern CX organizations are reinventing the names, skill sets and training of their customer service teams because of the importance of the experience to customer value.
Calling your support agents something like “Happiness Agents” would not be wise if they consistently deliver low CSAT numbers and aren’t empowered to actually generate happiness. While names set expectations, you have to make sure that you are able to execute on those expectations. That’s where the principles of a customer-first approach can deliver true value.
There’s also increasing amounts of research on the characteristics to hire for to deliver exceptional support experiences. Gartner found that “many service organizations still hire the same type of rep they would have hired 5 or even 15 years ago.” CX leaders should instead consciously begin changing hiring and training processes to emphasize more successful characteristics in support professionals, built for 2020 customer expectations.
To learn more about how to deliver customer-first support, download the full guide here.
Modern day consumers don’t think of relationships with retail brands as simply transactional — they see brands as an extension of their identity. That’s why building relationships with customers, and treating them as part of the brand, is imperative for business success.
According to a new Kustomer survey, nearly eight in ten Americans say that they wouldn’t shop with a retailer ever again if they encountered bad customer service.
From social media to old fashioned emails, Americans contact retailers 125 times a year – that’s every three days. The survey of 2,000 Americans asked their thoughts and opinions on customer service practices and experiences – and found that Americans aren’t that forgiving when it comes to bad customer service experiences.
In order to remedy their relationship with retailers, 82 percent of respondents are in agreement that retailers should proactively reach out when there is a problem with an order. Those most likely to agree with this sentiment were those aged 55 to 64 and those 65 and older – at a whopping 90 and 94 percent, respectively.
One point of contention between generations, is whether retailers should know their consumers and personalize their interactions with them. Of those age 25 to 34, three-quarters said they expect this personalized communication from retailers, whereas those 65 and older disagreed with this notion at nearly 40 percent.
“It’s clear that the digital age has transformed what the modern day consumer expects from retailers,” says Brad Birnbaum, CEO of Kustomer. “The younger generation not only wants instant resolution to their problems, they also demand personalized interactions and availability across all channels. Retailers must put a customer service strategy in place, and leverage the right tools, to deliver on these expectations.”
This older generation also disagrees with the age-old expression that “the customer is always right” – at 58 percent; but over half of those 65 and older, get very frustrated when they have to repeat information to customer service – that’s 10 percent more likely than those aged 18 to 34.
Sixty-six percent of those aged 25 to 44, however, do agree that “the customer is always right.”
Perhaps speaking to this expression, over half of respondents said they would post an online review after a bad customer service experience, and another four in ten (41 percent) would take to social media to complain.
In order to avoid the hassles of bad customer service experiences, 74 percent said they would spend more money just to get better customer service.
“Customer service can impact business success from end to end,” says Birnbaum. “Delivering a bad experience could not only mean a lost customer, but also a PR nightmare. Conversely, by providing exceptional service, customers are willing to spend more time and money with your brand, building brand loyalty and lifelong customer relationships.”
Read our retail report to access the full survey results, including insights on the importance of real-time support, personalization and omnichannel service.
From transactions to experiences, see how today’s customers are changing customer service
The digital age has forever changed the way companies do business. Direct-to-Consumer brands now make up 40 percent of the manufacturers, cutting out middlemen and offering personalized, nimble services and products to their customers. Amazon has redefined our notions of speed, convenience and selection, and companies like Airbnb, WeWork and Car2Go have revolutionized the economy allowing users to exchange the downsides of ownership for the upsides of sharing.
Meanwhile, companies like Birchbox and StitchFix have built up sizeable customer bases—and built-in loyalty—through subscription box services, and companies from Glossier to Parachute are joining the $50 billion pop-up industry, creating customer experiences that unite brick-and-mortar shopping experiences with the nimbleness of online shopping. The result? A business landscape where convenience, personalized service and customer experience are king.
New Generation, New Customer Expectations
But the digital revolution has affected more than just the way that businesses interact with customers. It has also changed what customers expect from businesses. More than three quarters of Americans now own smartphones and communicate regularly through social media platforms like WhatsApp, Instagram and Facebook. Modern-day consumers live in a world of interconnected platforms, instant communication, and personalized experiences—and they’ve come to expect the same from brands. And, as millennials become key customers and Generation Y gives way to Generation Z, expectations for quick, easy and customer-centric customer service will only grow.
In this new business landscape, businesses cannot rely on old models of customer interaction and support. To survive in the world of Amazon and eBay, where inventory is endless and speed is the rule, they must distinguish themselves by finding proactive and creative ways to build long-term relationships with customers over time. And to do this, they have to find new ways to identify and track the changing needs, experiences and expectations of their customers, providing fully-integrated, personalized, 360-degree support over the customer’s lifetime.
Moving from Transactions to Relationships
To provide this kind of support, companies must stop seeing customer interaction as a transaction and start seeing it as an ongoing conversation. Customers are not reducible to tickets, or to emails in a queue. They are complex human beings with a variety of motivations, and they bring a unique history to every customer service interaction.
Unfortunately, many companies are still relying on the old model of customer service, where they treat each new interaction as a separate event handled by different people across a variety of siloed platforms. In this model, there’s no way to store, share and track the customer’s history and past conversations, so customers are forced to repeat their issue to each new service agent. And this is no way to build a relationship!
Imagine if every time you met a new person, you had to tell them your name and life history all over again. It would be exhausting and insulting—and yet, it’s what companies expect customers to do each time they call with a question or problem. No wonder customers rank having to repeat information as their number one customer service complaint!
Know Your (Whole) Customer
To attract, satisfy and keep new customers, companies need to know who their customers are, where they’ve been and what they need. Understanding the context of a customer’s call—from the number of times they’ve ordered a certain product to the issues and conversations they’ve had with agents in the past—allows companies to deliver a more efficient, more personalized, and more proactive service.
Creating an omnichannel system that collects all of the customer’s history in one place transforms the customer service interaction, allowing agents to quickly identify problems, suggest solutions, and preempt future issues. Seeing that a customer has a long history of buying a certain product, for example, can allow an agent to suggest other products they might enjoy, while knowing what prompts a customer to engage with customer service can help the company direct them toward the best platform for resolving their issues. This approach doesn’t just save time by eliminating the need for unnecessary repetition. It also allows companies to build customer histories that ensure proactive, personalized and conversational service—and long-term customer loyalty.
In the modern business climate, the companies that will succeed are the ones that meet people where they are: anytime, any place, and on any channel. But the most successful companies will go beyond offering efficiency and access to a whole new philosophy of customer engagement, building systems that allow them to understand and serve the whole customer. See how Kustomer is setting the standard for customer service in the digital age in this on demand webinar.
What are the core principles of a modern retail customer experience? Personalization, curation, agility, and community. Direct-to-consumer retail brands use owning the design, marketing, distribution, and support of their products to build deep relationships with consumers. As a result, many DTCs have transformed customer support into personalized experiences that build loyalty and lifetime value.
Luckily, Kustomer works with many of the leading DTC brands. So we’ve pulled together a few of their customer service secrets for you:
Glossier builds products with their community of fans
A lot has been written about the CX revolution led by cult-fave-turned-unicorn beauty brand Glossier. A key part of Glossier’s success has been thanks to community building (the brand was of course born out of a popular blog) and the customer experience team, called their gTeam, has been instrumental in growing and engaging this community.
Glossier’s gTeam plays a foundational role in bringing community feedback into product design. The company is known for transforming customer feedback into hit products (see: Milky Jelly Cleanser). “They help us figure out and predict all of the questions or concerns that our customers might have about the product,” explained Jessica White, the executive director of customer experience, to Glossy.
The gTeam editors also go beyond transactional support (shipping, coupons, etc) to deliver complimentary style recommendations. The editors focus on specific channels, including ones not typically covered by support teams, like FaceTime. In combination with digital tools like the Shade Finder app and content illustrating how products look across a range of skin tones, this approach has helped the beauty brand recreate the experience of shopping in a makeup store.
“Instead of limiting interactions with customer service, which is the norm in the industry, we strive to create conversations with our customers,” continued White to Glossy.
The results of this CX investment for Glossier? Reddit threads literally raving about the brand’s customer service.
ThirdLove invests in a culture of CX and smart data
ThirdLove shook up the women’s undergarment industry with personalized recommendations for every body type, money-back fit guarantees, and diverse product models. Which brings to mind the now-famous Victoria’s Secret founder story of feeling unwelcome in the women’s section of a department store and proves how CX complacency can lead to history repeating itself — disruptors becoming the disrupted.
Customer service is such an important differentiator to ThirdLove that the brand invests in Customer Experience centers designed to be great places for their support teams to work. (Proof? There’s even an office slide.) ThirdLove’s Fit Stylists who work there receive training to make customers comfortable during their journey trying and buying intimate apparel, a personal process that can make or break customer loyalty.
As the company’s co-founder and co-chief executive officer, David Spector, explains to Apparel News, “We want to provide exceptional customer experience to people. The only way to do that is with our own team.” Spector also points out that the U.S.-based Experience Center helps ThirdLove’s Fit Stylists form deeper connections with their American customers than outsourced support would.
Like Glossier, ThirdLove also incorporates customer feedback and data into its buyer journey. More than 13 million women have completed ThirdLove’s online Fit Finder tool, resulting in more than 600 data points the brand uses for product development and delivering recommendations back to customers.
Outdoor Voices invites participation in
With a brand that’s about #DoingThings, Outdoor Voices is another DTC brand thriving because of its (extremely on-Instagram) community. The Outdoor Voices Brand Reps play a key role in letting customers know what the brand stands for, why it’s different, and what each clothing item was created for. According to Muse, Outdoor Voices HQ and Brand Reps have monthly video chats to discuss brand news and initiatives.
To make contacting support simple and on brand, Outdoor Voices has a welcoming page and easy-to-navigate support page. By making its email contact “hello [at] Outdoor Voices,” the “support” vibe is swapped for a friendlier, conversational tone.
Like other leading DTCs, Outdoor Voices leverages customer support as a product and trend feedback engine. The company’s recent job posting for a Customer Experience Manager explicitly lists a requirement to “Operationalize customer data and feedback, both within the team (e.g. measure and improve Associate performance) and the company at large (e.g. make customer trends actionable).” This invites fans into the product development process, with customer support as the entryway.
LOLA designs support workflows for empowered agents
Like ThirdLove, LOLA is disrupting traditional brands in another very personal space for women: feminine care and sexual wellness. The brand’s customer service team must handle deeply personal topics from customers, often over email. To return the trust their customers have in them, LOLA’s team goes above and beyond to make sure their products are rushed to women wherever they need them. From sending tampons to a customer’s hotel via Uber, to overnighting condoms so that they arrive in time for a honeymoon, LOLA works overtime to create a memorable experience.
For a recent product launch, the Lola team took it as an opportunity to both reward loyalty and gather feedback. They sent 100 loyal customers mailers of their new Sex by LOLA products. One customer even emailed to say that she loved the products and, as a single mom, they inspired her to start dating again.
For a brand that empowers and informs women, LOLA’s team needs to be just as empowered and informed by their technology solutions to deliver great service. Context Cards enable the team to take direct actions such as modifying, cancelling, or scheduling a subscription, and checking on shipping status for an order. Clicking on “Modify,” for example, takes them directly to the customer’s subscription, where they can edit the frequency, products, etc. This makes it easier for the team to spot orders that have been placed, but may need modifications. LOLA has a search for customers who have emailed and placed an order in the past day, so that agents can make modifications to the order before it actually ships.
5 ways to deliver CX like DTC leaders
Consider customer service on the front lines of community and relationship building, not simply a necessary business cost.
Operationalize mining customer conversations for product feedback by support to bring product ideas back into the company.
Use technology to compliment the role of support agents, through algorithm-based recommendations, self-service fit finder tools, and seamless exchanges/returns.
Empower your support teams to go beyond transactional support, have social conversations, and reward loyalty.
Build service conversations off a shared history and understanding that customers are people, not support tickets.
These approaches can benefit any brand, regardless of business model, because they’re key to delivering the type of service customers want and expect. Evaluate your own service operation to see how you compare to these DTCs, and then look for scalable opportunities to deliver a more modern experience — it’ll pay off in community, loyalty, and lifetime value.
The Direct-to-Consumer (DTC) revolution is shaking the foundation of retail business. As digital advancements make it even easier to cut out middlemen and deliver totally new kinds of experiences, customers have come to demand DTC brands provide them with the same kind of convenient, personalized and memorable experiences they get from traditional stores. Those that can innovate, adapt, and bring a higher caliber of experience and smarter ways to buy using the vast amount of consumer and product data available will be the ones that succeed. Those that don’t will lag, unable to bring a truly modern experience to their customers.
The time has come to reconnect with your customers and focus on a lifetime of experiences, rather than on optimizing a single, specific journey. Here’s how your brand can communicate and sell directly to your audience today:
Curate collections of essential products for customers
Focus on a few good items done right at a fair price point. This approach is key to tapping into modern shopping trends, encouraging brand loyalty and repeat business by making products that become an essential part of customers’ lives. Huge selections and hundreds of locations are no longer likely to breed success.
Pioneer new models like subscription and shared ownership
Harness the power of digital tech to connect everyone and everything, putting surplus or unused goods to use, and creating experiences that effortlessly sync with our everyday lives. As customers, especially millennials, are willing to buy used or share ownership if it means great savings, consider using tech to implement shared ownership models in your brand practices.
Make delivery and returns easier
As more customers buy online, delivery and returns are becoming even more crucial to the customer experience. Focus on fast delivery and low-friction returns to make up for any hesitation customers might have about buying online. All the more so for large, traditionally hard to ship items.
Deliver personalized, 1-1 service
Adjust every aspect of the online shopping experience to meet customers’ needs, using the latest CRM, machine learning, audience segmentation, and personalization technology to create an immersive digital journey.
By integrating orders, shipments, and conversations, with internal and external customer data, Kustomer helps brands get a comprehensive and actionable view of all customers, driving informed service decisions.
The Direct-to-Consumer approach has changed the way we discover, shop and buy. To take stock of this monumental shift, Kustomer hosted some of the most influential and innovative DTC brands to discuss their approach to loyalty, relationship-building, and experience.
A common thread is that this shift in the consumer ecosystem has put a greater emphasis on the relationship brands have with their customers. Every brand, not just DTC companies and startups, have to value customer experience, loyalty, and lifetime value above all in order to reach modern consumers.
1) Personalization with Purpose
Your customers expect more than a one-size-fits-all experience. They’re all different, and they know that their data should be put to use to make their experience better.
If there’s one brand that knows one size doesn’t fit all, it’s custom shirt manufacturer Proper Cloth. “We have smart sizes—we ask the customer ten questions around height, weight, fit, tuck-in preference, and from that we predict what set of custom size dimensions would be most optimal,” said Founder Seph Skerritt. “This was a big data problem, but as we grew we had a rich data set to build a bigger advantage upon. We used that to improve the customer experience and streamline the onboarding experience.”
Jewelry and watch marketplace TrueFacet makes sure that they’re using a granular segmentation process to send the right messages to the right customers, as CEO Tirath Kamdar describes: “Our customer segmentation is behavior-driven—and then we use demographic information on top of that. We’ve created curated programs to help with our customer segmentation. We target each of our consumers in different ways to build loyalty.”
Personalization isn’t limited to product features, it’s also valuable to personalize content, marketing messages, and other touchpoints. As Alison Lichtenstein, Director of Customer Experience Design at Dow Jones summarized: “Personalization is important—knowing the exact content each person is reading, focusing on serving up the next best article, section, newsletter—we want to anticipate what the customer needs and putting that in front of the person, to make sure they continue to be engaged.”
The push to personalize is even built into Dow Jones’ strategy at the highest level. “We’re evangelists of customer service, we’re constantly thinking about how we can resolve customer issues. But we also focus on the agent experience, helping them help the customers. It’s a huge piece in helping us differentiate. We want to be able to help personalize.”
2) Communication is Crucial
New DTC brands are doing more to connect with customers. Digital channels create more opportunities for conversations, as chat and social multiply the amount of places customers can ask questions and engage.
“When things go wrong, you need to be constantly talking to your customer service team to find patterns, identify the issue, and then make the fix.” Said Britta Fleck, President and Managing Director of Glossybox North America, “Constant communication with your customers provides a better end experience.”
For DTC sofa startup Burrow, they’ve also found that more communication is better. “In the past we’ve tried two approaches. The approach of constantly updating the customer and keeping them in the loop was more successful than giving them a code—communicating with your customers is very important.” Says Co-Founder Kabeer Chopra.
To keep the conversations going, loyalty programs are a natural fit. They ensure that customers stay engaged and reward them for their enthusiasm. Glossybox is pursuing this strategy in earnest, “We’re doing a lot around loyalty, we like to reward our customers. We’re looking into pausing subscriptions over vacations etc, but we don’t want to make it difficult for users to unsubscribe. Either.” More communication can lead to a better experience, but that experience still has to take precedence. “We can only personalize our offering to a certain extent, but what really increases lifetime value for us is listening. And it’s easier sometimes than answering.”
3) Brands, Not Channels
While communicating over every channel that your customers use is important, this communication has to be held together by a strong strategy for the brand. As Mike Vroom, Customer Service Manager at UNTUCKit put it: “Customers interact with brands, not channels.”
Glossier has a similar view, as their Director of CX Erin Miller described, treating every interaction with customers as it’s own channel—they’re not thinking about where they’re interacting with you, but about how they’re going to solve their issue or get the information they want.
This also means that your brand has to communicate with customers in a way that feels warm, natural, and human. Mark Chou, VP of Growth Marketing and E-Commerce at Away, is changing up the way his brand communicates by switching from a reactive to a proactive service model. “When you make mistakes, you don’t hide them from your friends. The same should true for your customers. You can turn a screw-up to a shining moment for your team—being proactive as a customer service team can turn a mistake into a moment for your company that you are proud of.
4) Create Connections with Culture
Above all else, your customer experience should strive to create stronger connections. Interacting with customers one-on-one is highly personal, and doing so in a genuine, meaningful way can have a lasting impact. To do this more effectively, you need to know what your company stands. Daryl Unger, VP of Customer Experience at meal delivery brand Plated, has a strong perspective on the importance of building relationships for his brand. “Food is extremely personal, we aren’t in the business of fixing issues and solving problems, we are in the business of building strong emotional relationships with our customers.” Building relationships based on emotion has some key benefits as a strategy as well. “We remember emotions much longer than transactions. We spend a lot of time studying customer behavior and patterns, which helps us learn when we should proactively reach out—which is very important in a subscription ecommerce business.”
Similarly, Rent the Runway has built their company culture into their customer experience, which helps them build strong relationships with millennial shoppers. “Culture is in the fabric of our brand,” said Tyler Nicoll, Product Manager at RTR, “We have to be woman-first, and we’re changing the landscape by doing something that’s not common in tech companies.” RTR has a full female finance team as well, and are an inclusive company that invests heavily in sustainability initiatives. “Millennials choose brands based on social consciousness,” concluded Nicoll, which is why creating a strong brand built on solid principles makes it easier to form relationships with them. To make it easier for their agents to connect with renters, Rent the Runway’s Integration with Kustomer allows them to automate certain workflows that used to be manual, so they can spend more time working with customers and less time inputting data.
BarkShop and BarkBox understand dogs and dog owners. By getting a rich picture of their customers and their pets by using data analysis—and by using their insight as pet owners themselves—they’re able to deliver exactly what their customers need. “We’re understanding what the needs of our customers are, and figuring out what they need to meet them.” Said Melissa Seligmann, BarkShop’s General Manager.
As the conversations at our event have shown, the Direct-to-Consumer revolution is shaking the foundation of how we do business. As digital advancements make it even easier to cut out middlemen and deliver totally new kinds of experiences, customers will come to demand the same kind of convenient experiences they get from DTC brands from traditional ones. Those that can innovate, adapt, and bring a higher caliber of experience and smarter ways to buy will be the ones that succeed.
As direct-to-consumer business models become more popular, different industries are finding their own ways to make these kinds of experiences work for them. This has been especially true for the fashion industry. By cutting out markups, leveraging digital technologies, and promoting radical transparency, dozens of new fashion brands are succeeding with DTC. We’ve taken a look at the unique ways specific fashion verticals are taking their products straight to customers, and how they’re differentiating themselves from the legacy brands that came before them.
Denim: Simplified Selection and a Digital Storefront
Some products are timeless, but are the brands that sell them timeless enough to survive in the modern retailing world?
The traditional retail model means denim companies like 7 For All Mankind source their designs and fabrics from numerous designers and mills. They stock products their designers and buyers believe customers will like, but aren’t close enough to customers to bet on a handful of choice designs. Instead, like most retailers, they take a shotgun approach. Dozens of slightly different fabrics, cuts, and details make shopping for new jeans harrowing and downright consumer unfriendly. National retail outlets require huge warehouses and supply chains to keep locations stocked with all the varied styles, driving up costs for the end-buyer.
Younger luxury brand DSTLD sells premium denim and elevated basics direct to the consumer and is primarily online (with limited pop-up stores that let customers experience the brand in person). By selling direct, DSTLD is able to focus on quality rather than quantity. Their collection is easy to browse with a color palette of just black, white, grey, and blue. A reasonable price tag is a fair trade for a lesser-known brand name and limited retail stores—plus they use the same factories as many designer labels. DSTLD even allows true fans to invest in the company, ensuring that the brand will remain true to their customers as they grow—because they have direct financial control.
Focusing on a few good items done right at a fair price point is key to tapping into modern shopping trends, and encourages brand loyalty and repeat business by making clothes that become an essential part of customers’ wardrobes. Huge selections and hundreds of retail outlets are no longer likely to breed success.
Designer Fashion: A Closet in the Cloud
While the previous example focused on delivering a product, the new normal for retail also means fundamental changes in behavior. One of the biggest shifts: changing attitudes about ownership. Airbnb, Lyft, and WeWork all meet a desire to pay less in exchange for giving up sole possession. Why own a car when it’s so convenient to ride in someone else’s? Why stay in a hotel when you can stay in someone’s house for less? Rent the Runway provides a similar solution for your wardrobe. Why buy a new dress for every one of your friends’ weddings when you can rent one for a tenth of the cost?
With Rent the Runway, customers can get the same high-quality designer clothing, but without having to own it forever. If you don’t want to show up to every wedding of the season in the same thing, renting just makes more sense, and allows customers more choice and flexibility—they can get a much more expensive piece without worrying about the price tag.
RTR’s direct-to-consumer model adds value that a department store like Macy’s just can’t without majorly restructuring some of their current practices. Without the costly overhead of hundreds of national storefronts, RTR can deliver and scale a new kind of in-store experience without orienting their entire business around it.
Pre-Loved Fashion: Sustainable Style
Millennial consumers don’t feel the stigma of pre-owned items like previous generations. They’re more likely to embraced pre-owned fashion due to its sustainability (and lower cost), leading to a robust market for secondhand goods. New sites like Grailed, theRealReal, and TrueFacet are filling the gaps left between the small, independent, highly-curated boutiques offering clothes and furniture in most major cities. However, Material World offers a service that goes a step further than any of these.
Material World will pay customers for their pre-owned designer clothing up front—making it easy to trade in your lightly-worn items for hard cash. Yet this is just one piece of a bigger system. The Material Box is a subscription service that ships an outfit handpicked by a stylist every month straight to your door. You’re not just getting a sustainable, designer outfit for a fraction of the price, you’re getting unique and totally personalized styling services. The stylist who works with them knows the entire history of their purchases and interactions, meaning they can provide deep and contextual service. That’s a benefit you won’t find at even the most upscale boutique. The box can then be used to send back their own clothing, replenishing their old pre-owned clothes with new ones. Material World supports an ethical system that diminishes waste and elevates the benefits of pre-owned clothing, creating an experience that’s even more appealing and streamlined than buying a designer outfit for yourself.
As the DTC model becomes more popular, the variety and creativity of new DTC brands will only increase. The principles for CX success are clear, no matter which industry you’re in:
Adapt to changing customer expectations
Always push to innovate with new technology
Look beyond the old ways of doing things to find cheaper, faster alternatives
If you can do that, you’re sure to delight your customers and improve their experience. Learn some more aspects of the DTC approach that can help you deliver better service in our whitepaper.