There was a time for consumers when the process of becoming aware of a product or service, understanding whether or not it was something you wanted or needed, and then actually making the purchase were separate and distinct activities. Then the internet happened, and now those lines and distinctions have been blurred or erased. To say that web and mobile technology has changed things is an understatement. What were once discrete activities have now converged into a single experience for consumers. With that change has also come a shift in power. In the past that power was shared by the businesses and consumers alike.
But with the complete transformation of the buying and selling process, it’s the consumer who holds all the cards and can dictate the terms – witness that the abandonment rate for online shopping carts is an average of over 68 percent. The key to ensuring that purchase is consummated is to create a complete and deeply satisfying experience for the customer.
For a good example of this, let’s look at how Amazon operates. With a PC or mobile device, consumers can browse products ranging from clothing to canned goods to garden fertilizer (and yes, books, music and electronics). They can compare competing offerings, read user reviews, order what they want and have it delivered in as little as a day, all in one place.
But Amazon goes even further – in real-time it analyzes what the customer is browsing, makes suggestions for alternatives and also offers related items. Buying a new 32-inch flat-panel TV? Well then you’ll probably need this HDMI cable to hook it up to your cable box. Amazon then allows the buyer to monitor the purchase from the moment it ships to the minute it lands on their doorstep. And Amazon follows up, soliciting feedback on the product and the service, and continuing to offer complementary suggestions based on the buyer’s preferences. Like “The Walking Dead”? Maybe you’ll like “The X-Files.”
The challenge for many businesses now is that no matter what they’re selling, consumers demand that Amazon experience for everything they buy. And they expect it from anyone selling any product or service that can be purchased online, and even many things that traditionally are not. For example, my company provides technology that helps lenders and consumers better manage the mortgage application process – a complex, lengthy and often stressful procedure. This is not an industry traditionally associated with the words “satisfying online experience,” and that notion might even meet with resistance from old-school providers of these services.
Yet, when you look at the benefits it can provide for lenders, the business case is compelling. First of all, this is becoming a baseline requirement for consumers, and lenders that provide it will get their business; those that don’t, won’t. Secondly, integrating these services into a single, transparent online experience means getting to a decision faster, completing the transaction faster, and making money faster.
And finally, by creating that fulfilling online experience a business establishes a relationship with that customer, creating the opportunity for repeat business. We know it’s fundamentally more costly to acquire a new customer than keep an existing one – up to five times as expensive by some accounts. By the same token, satisfied customers are 50 percent more likely to try a new product from you and will spend 31 percent more than new customers. So the end game is not to find new customers, but keep the ones you have and turn them into repeat customers.
In the case of our lending industry customers, for example, this is a rich vein to be mined. After all, someone who borrows to buy a home may also a need car loan, a home equity line of credit or a construction loan for renovations and additions. They also may require financing to buy vacation homes, boats and recreational vehicles. If the experience they had when applying for that mortgage was satisfying (i.e., the service was prompt and efficient, the process was transparent, and they received up-to-date information instantly via their mobile devices), the likelihood is very high that they will return to their mortgage lender for those future borrowing needs.
It’s just easier. They have a reasonable amount of assurance that the experience will be equally satisfying and will prefer to do business with someone they know, and who knows them. And since the lender already knows the customer, there is an opportunity to anticipate some of those needs and proactively offer appropriate services, Amazon style. Satisfied repeat customers do something else – they share their experiences, online and with friends and co-workers, which leads to new customers for you with little or no acquisition costs.
We live in a new world, where pricing is an open book and quality is assumed by the buyer. The one place where businesses can differentiate themselves with customers is by providing great service. And more and more, customers will expect all businesses to deliver that service through a satisfying online experience.