Leading Online Retailers Make Customer Experience Part of the Product

When is a product not merely a product? When it is also an experience.

What does that look like? Whatever the customer says.

Frustrated? Don’t be. It’s just the brave new world of customer sentiment driving product and experience design, shaped by analytics.

As Paul Fredrich, senior vice president of product at relationship marketing platform Ordergroove, told PYMNTS, “Nowadays, the product is not the product anymore. The experience provided by and around the product is the product.”

Gone are the days of consumers having patience for merchants and brands that see them as little more than dollar signs.

“If you as a merchant or brand don’t provide a frictionless experience, you get punished because your competitor probably will,” he said. “They’re likely going to go with your competitor because they reward good experience.

“As a brand, it’s really important to focus on removing friction, obsessing over your customer’s experience, using data to identify friction and focusing on reducing that further and further.”

This is where talking to your customers — “the happy ones and the unhappy ones,” he said — is paying off as more energy goes into the experiences behind the products we love.

The problem, Fredrich said, is that eCommerce still focuses too much on one-off transactions and not enough on building long-term relationships. It’s a broken model — one that doesn’t work well for retailers or customers.

Surrounded by competitors and having difficulty differentiating, Fredrich said customer acquisition costs are starting to outpace customer lifetime value for more merchants and brands that are not using data to inform product and experience design.

Fail to measure customer’s experience — quantitatively, qualitatively — and you end up in the situation where “there are many physical products that are great, and consumers are not quitting the physical product, but they’re quitting the experience around it.”

See also: The Data Point – 75% of Consumers Will Buy More in ‘Relationships’ Like Subscriptions

Convenience Is Key

Recent PYMNTS research finds that nearly eight in 10 (79%) consumers have established commerce relationships with brands they frequently use, be it a retail membership, subscription or loyalty program, with 17% of consumers surveyed having all three.

Those customers were acquired at a price — usually quite high — so taking product and experience design to the next level is an imperative of the post-pandemic era.

Fredrich shared a personal story about suntan lotion that paints the picture. After hunting down the perfect product, he bought it. Used it. By the next summer, he’d forgotten the name.

“It’s friction for me to now figure out, ‘What did I buy last year? Where did I buy it?’” he said. “I know that I really liked it. I want to be loyal to the brand, but the brand doesn’t make that easy for me. So, there’s a high chance I end up buying a different product.”

Had that brand reached out at the point of sale with a simple SMS option, they’d have a loyal customer now. If they’d offered a subscription, they’d have a recurring revenue stream.

“Fundamentally, we believe that the solution to all these problems is consumers and merchants, brands and merchants [moving] together more closely and having more of a relationship,” he said. “This means sharing data, using it to personalize experience, using it to communicate proactively.”

Read more: Relationship Commerce: Building Long-Term Brand Engagement

Taking a universal favorite — coffee — Fredrich said we often start to favor one brand over all others. That’s the moment that brands and merchants need to be ready for, but many aren’t.

“You’ve become loyal,” he said, but “they really churn you because of the experience you provide around the product.”

In the absence of a membership or loyalty connection, brands can’t know if you’ve run out. Outdated password-based eCommerce is another way to run off the impatient connected consumer.

“All these things are still friction that then lead consumers to churn,” he continued. “Simple things that merchants can do, for example, in addition to obsessing about data, typically we see payment methods have a huge impact on the experience.”

It begins at the beginning, naturally, offering consumers the option to transact as guests first.

“That’s flexibility for the consumer,” Fredrich said. “Again, proactive communication and offering guest checkout, not forcing customers to start the relationship by creating an account, getting them to check-out as guests, and then over time you can step up on the relationship spectrum by asking them to create an account, incentivizing them. It doesn’t mean that’s where you start.”

Subscription Power

Fredrich noted that merchants and brands “can leverage methodologies to develop these experiences that have been established in software development for a long time but might be still new to somebody that comes from a physical product development background.”

Even if the idea ends up being a snail mail postcard on their birthday, or a surprise gift in a retail subscription box, product and experience design can operate as one, creating delight.

“It’s things that customers don’t expect that ideally are easy to do, but that have a huge impact on their happiness, the experience, because they aim for delight,” Fredrich said.

Of the three commerce relationships — membership, loyalty program and subscription — Ordergroove services all three, and Fredrich sees the richest rewards in subscriptions.

He said, “We’re seeing in our data [that] subscriptions are a great way today to deliver on this idea of frictionless experience for the consumer, and then in return, get rewarded with loyalty, incremental spend, word-of-mouth marketing, and also higher predictability in sales.”

He added that “subscriptions are also a really great way, from my perspective, to allow your most loyal customers to raise their hand and identify as your most loyal customer.

“If somebody signs up for a subscription, it’s not just that you get the subscription recurring revenue and all these great things, but you also have identified a customer based on their own doing as somebody that wants to be loyal to you, that plans to spend money with you.”

The point of platforms like Ordergroove is to create an experience around buying and receiving products that adds value to consumer perceptions, which gets the loyalty flywheel turning faster — and incremental spend rising — the deeper the commercial bond becomes.