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9 Key Factors Affecting Customer Satisfaction in Retail

Agustus 14, 2023
9 mins reading

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Customer Satisfaction, or CSAT, refers to the extent to which a customer is happy and satisfied with a company's products or services. It is an important measure of how well a company is meeting the wants and needs of its customers. A high level of customer satisfaction can lead to increased loyalty, positive word-of-mouth marketing, and ultimately, increased revenue and growth for the company. 

This article will discuss 9 key factors that affect customer satisfaction that are proven to be beneficial for retail companies and businesses to analyze and implement

1. Understanding Customer Expectations

Customer expectations are essentially the assumptions and beliefs that customers hold regarding a company's products or services. These expectations can be shaped by a variety of factors, such as their own experiences, others’ recommendations, or marketing messages. 

It is crucial for businesses to comprehend and meet their customer’s expectations in order to deliver an unparalleled experience and foster customer loyalty; in fact, Deloitte reported that customers are likely to spend 140% more after a positive experience. 

2. Store Environment and Ambience

A welcoming and comfortable environment is necessary to improve a customer’s overall experience with a store because the “customer experience” begins even before they enter the store; it starts the moment they set their eyes on the store.

Visual Merchandising plays a huge role in setting up the store ambiance - factors like lighting, music, scent, temperature, aesthetics, and cleanliness must be considered and tailored to the brand’s standards in order to create a shopping experience as easy and comfortable as possible for customers. By creating a space that is clean and comfortable for customers, it enhances their overall experience, and will also keep them coming back for more.

To ensure that customers get the best experience at all times and at every store, thoughtful implementation of new technologies is needed. The traditional route to ensure consistency in displays were through manual checklists, phonecalls, and WhatsApp messages; these processes are time-consuming and inefficient in ensuring that a store is looking at its best. This is where Nimbly’s Digital Routine comes in handy - the automation of routine checklists is now possible to ensure that all stores are displaying the right things at the right places quickly and efficiently. 

How AI is Transforming the Retail Industry

How AI is Transforming the Retail Industry 

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3. Impact of Service Quality

The quality of service plays a key role in determining customer satisfaction. When customers receive high-quality service, they are more likely to be satisfied with their experience and more likely to return in the future. Friendly faces, welcoming personalities, and an extensive knowledge on products are vital in ensuring that each customer has an enjoyable and easy experience before and after a purchase. To sum it all up, high quality service directly leads to customer retention; hence training frontline employees effectively and equipping them with the right tools to handle complaints, resolve issues, and provide excellent service is necessary. 

An on-demand and online course service might just be the answer to empowering frontline employees across all locations. With a Learning Management System, businesses can now switch on-site training with an intuitive program that can be accessed anywhere, at anytime. As the LMS is powered by microlearning and gamification, it drives engagement and knowledge retention for frontline employees; this results in employees being able to answer difficult questions and navigate tough situations seamlessly. Not only will this save costs, it will also enhance the overall productivity and experience of team members. 

4. Product Quality and Availability

Product quality talks about how well the product meets the end customers’ needs, so it greatly affects the overall customer experience and satisfaction with a company. Products are made to fill a need in the market, and customers expect those products to meet those needs. To add to that, products also have the power to establish an emotional connection with the customers; it helps customers rely on what a company is offering, and it keeps them coming back for future purchases. 

Moreover, a positive shopping experience isn’t complete without consistent product availability. When customers walk into a store, they expect shelves to be filled with a good selection of products that will fit their needs and wants. When this doesn’t happen, it creates a negative shopping experience for them; it leaves customers empty handed and the business without a sale. Thus, it is important to implement systems in place in which businesses can ensure product availability at all times across all locations. 

5. Pricing and Value Perception

When determining the prices of products, it is crucial for businesses to examine what its competitors are charging for it. Understanding what competitors are charging for a certain product will make it easier for businesses to pin-point what is the value of said product from the industry’s point of view, as well as the customer’s. Straying too far from the market price could make a product seem too expensive, while setting it too low might negatively impact not only perspective, but it can also affect business operations as it will slim down profit margins. 

An important aspect of determining a price is Perceived Value Pricing - it refers to value that customers are willing to pay for a particular product based on their perception about the product. This approach is customer-focused, and aims to provide the best possible value at competitive prices. 

In order to get a better understanding of how other businesses are setting up their prices, it is recommended to do site visits to compare prices. To speed up the process and compile all the data into one seamless report, businesses can utilize Nimbly’s Competitor Analysis feature. This approach allows frontline employees to report pricing data from multiple companies in real-time, generating actionable insights in which the management teams can utilize to adjust pricing strategies for future products or services. 

6. Convenience and Accessibility / Customer Effort (CES)

When it comes to shopping, customers are always looking for the quickest and easiest way to get what they want, when they want it. In other words, customers are always looking for convenience when they shop. Location, shipment and payment options, and accessibility all play a part in orchestrating a convenient shopping experience for a customer, so it’s imperative that businesses implement strategies to make shopping as easy as possible for customers.

A convenient shopping experience starts with location. When choosing a location, it is important to consider that the location will fit a company’s identity, as well as its customer’s expectations. For example, a company that sells luxury goods would never choose a night market as an option for a location, why? Simply because it doesn’t match their brand identity, and that their customers are not likely to shop in a night market. 

The pandemic also has brought the world to a new and digital era of shopping, and convenience is the driving force behind each online purchase. When it comes to online shopping and e-commerce it is just as important to prioritize a convenient shopping experience. For example, offer customers with multiple options for payment and shipping, as not everyone uses the same. 

Ensuring convenience across multiple stores, locations, and platforms comes with its challenges that companies need to prepare for - issues may arise out of nowhere, and it may take longer than needed to solve said issues with the traditional method of issue management (WhatsApp messages, phonecalls, paper forms). With Nimbly’s Issue Tracker, the hassle is eliminated from the issue management process; Nimbly’s mobile platform allows companies to monitor and escalate issues in real-time, and provide frontliners with an easy way of reporting issues. 

7. Personalized Shopping Experience

Each customer is different from one another; they have different needs and different wants. As a company, it is vital to offer customers some degree of personalization for them to have a comfortable shopping experience.

One of the ways businesses can achieve a personalized shopping experience is through the use of ChatBots. By using chatbots, companies are extending their customer service; providing their customers with 24/7 support while also collecting feedback; overall facilitating the sales process, and giving customers a personalized shopping journey. Another way to achieve this is through training frontline staff to ask questions like “what type of silhouette do you prefer?” “what colors do you gravitate to?”; asking simple questions about the customer’s preferences has the ability to make them feel heard and in turn, appreciated. 

Furthermore, businesses can utilize data collected from surveys or feedback forms to capture in greater detail about what their customers actually want from them, and take action according to the data. Through the Voice of Customer, businesses can easily identify what’s working and what’s not from its products, services, and campaigns through a digital system that can be accessed at all times. 

Case Study | Retail

How Delamibrands Streamlines High Quality Inspections with Nimbly

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8. Communication and Marketing

Effective customer communication starts with listening to the customers, and it moves to keeping them informed with the latest products or services. Attentive listening, genuine understanding, and information sharing all contribute to creating an experience that customers find value and can find comfort in. To achieve this, businesses must use the right channels to appeal most to their customers. 

For example, a survey that Company A did concluded that most of their customers shop online, spend a lot of time on social media, and rarely opens their emails. With this information, Company A can place their newest campaigns through Google Advertising, provide free shipping, announce the launch on social media, and won’t spend a penny on e-mail marketing. By doing this, Company A is catering to their customers specific needs and wants, and in turn, they create a shopping experience that is appealing to their customers, prompting them to purchase and to keep them coming back for more. 

A customer’s experience is not only present when they’re on-site, it is also present online. Live chats, social media, email marketing, user-friendliness, and advertisements are all important tools to increase customer satisfaction and loyalty online. To sum it all up, all advertising and branding activities (online and offline) should be aligned with what the company wants to communicate to its customers. Not only does it have to be relevant to the company, it has to be relevant to their customer’s needs as well. 

9. Social Proof 

Social proof refers to the phenomenon where people tend to follow the choices of others, and this is especially prevalent when they are unfamiliar with a certain product or situation. Any positive comments made about a business or a product is considered as social proof - the external validation and advocacy made by customers about a certain product carries the potential of influencing what people buy. 

Real voices tend to carry more weight than branded messages from companies themselves due to the bandwagon effect. This is why it is important for businesses to give platforms for customers to one, voice their opinions, and two, for Key Opinion Leaders to talk about them; this can be done through influencer/KOL programs, surveys, and overall providing and marketing a great high-quality product that meets the needs of a particular market. 

However, feedback also goes both ways - some people may not always like a product a company launches. In this case, businesses can view negative feedback as opportunities for them to improve in the future. 

Measuring and Improving Customer Satisfaction

When companies are striving to improve its offerings, such as products and services, it becomes crucial to gauge the satisfaction levels of your customers. This assessment allows companies to evaluate the effectiveness of their current marketing, operations, and manufacturing processes. It lets a business know what’s working and what needs to be improved. 

Keeping an eye on the customer’s satisfaction and happiness helps companies spot problems early and take corrective action immediately in order to keep customers continuously happy. One of the ways in which businesses can see how happy their customers are with them, is through putting up a QR code at the checkout counter that will take customers to a form in which they can share their thoughts about a certain product or service. 

The data gathered from these forms can then show the level of satisfaction customers have with a certain business, and it can help businesses create new plans for things that needs improvement. Not only will businesses gain these insights, they are also implementing a continuous improvement culture. 

Case Studies and Examples

A pioneer in the Southeast Asian Retail industry is Primer Group of Companies. Overseeing 150 brands worldwide, their priority lies in enhancing customer satisfaction. By placing their customers at the forefront of their decision making processes, they aim to elevate experiences, which will eventually lead to satisfaction. For a company of Primer’s size, implementing new and innovative systems is vital to accurately track customer expectations and ensure consistency in operations. 

Prior to partnering up with Nimbly, maintaining consistency, elevating satisfaction, and understanding customer expectations across Primer’s many brands and locations presented challenges. 

To ensure consistency, Primer shifted from manual processes to Nimbly's Voice of Customer and Digital Routine platform. Moreover, implementing the Voice of Customer provided insights into behaviors, experiences, and preferences, saving time and resources. Lastly, the Issue Tracker escalates problems, offering cohesive solutions.

Digital Routine identifies risks, opportunities, and trends via real-time monitoring of store and employee performance.
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