The Quadruple Value of Connected Customers
This piece was originally published at Total Retail.
We live in a world where customer expectations are constantly changing. And for businesses, keeping up with customers can be a daunting task. “Connected Customer” is a relatively new term used to describe those customers that interact with brands through digital means such as websites, apps, voice assistants (e.g., Alexa), etc. An overwhelmingly large percentage of the population falls into this category. And mobile devices are leading the charge as the most preferred channel of engagement. Connected customers are everywhere and span every generation. You see them every day. In fact, odds are good that you’re a connected customer, too.
If you’re looking to grow your business and stay relevant, here’s some news: you should be obsessed with connected customers.
Even though many businesses may still not fully understand their connected customers just yet, it’s something that should receive significant attention and focus. Businesses should be locked in to finding and cultivating the connected populace for the simple reason that they’re already more valuable than nonconnected customers. Not in theory, but in practice. Here are four ways in which connected customers are worth more to a business than those who are not.
Connected customers’ natural digital preferences make them easier and cheaper to identify, engage and build a relationship with. Done right, digital marketing and digital sales and delivery can be less expensive than labor-intensive brick-and-mortar alternatives. If you can get robust sales through online storefronts instead of physical ones, there are savings to be had.
However, if you plan to drive engagement with your brand via digital interactions, keep in mind that connected customers are highly sensitive to and very aware of the overall experience they encounter when interacting with your brand. Yes, this also applies to physical experiences as well, but in regards to digital, its table stakes. Eighty percent of customers say the experience a company provides is as important as its products or services. It’s no longer enough to just put a catalog and a shopping cart on your website or in your mobile app. It just won’t do. But if you can attract online shoppers to your business while providing an experience that’s personalized to them, frictionless and memorable, connected customers will crave doing business with you.
The second value of connected customers is that they leave digital footprints. Connected customers aren’t afraid to offer up data, and data is money for your business. Be prepared to use the data to better their overall experience. With trust issues at every turn, connected customers are sensitive to how this data is used, yet 79 percent of customers are willing to share relevant information about themselves in exchange for contextualized interactions that bring immediate value to them. Experience designers need to take this into account when marrying data to the overall brand experience from the customer’s perspective. This takes special skill and empathy to do it right.
Here’s the bottom line: if you engage them appropriately and build an experience they come to love, connected customers will not only offer up their personal data for an even deeper, more personalized experience, but they’ll also give you insight into your brand, your products, your services and anything else that they would like to see from your business. The customer data flood gate is essentially open. Integrating robust data collection and analytics to your company’s digital pathway will not only give it a road map to new products and experiences, but may also reduce speculation and risk. Not only will digital customers purchase from you, but they will tell you what else you should sell as well as how, when and where you should do it. That insight will drive your competitive edge.
If you read a lot about successes and failures in the world of digital transformation and the experience economy, you may have been able to guess the first two connected customer value points.
But here’s one most don’t realize: connected customers will spend more than their less-connected peers. Customers who regularly use mobile devices to buy products or services have also been known to spend more per transaction than those who don’t. They’re more likely to customize, upgrade or add related items to their carts. Case in point, when Chick-fil-A launched its Chick-fil-A One mobile ordering app, it saw typical order sizes go up 25 percent across the board. Customers were more interested in adding additional items to the cart (e.g., adding bacon to a sandwich or upgrading to a wheat bun) when they weren’t feeling pressured by the anxious person behind them in line. I know this because we were fortunate to help Chick-fil-A launch this premium experience that continues to set the standard for mobile ordering in its space.
Another example is a global hotel chain for which we built commerce apps. The hotel chain reported that 85 percent of its most valuable customers, defined by annual spend, used its mobile app exclusively to book, manage and pay for their travel.
Across industries, the rate of enhanced spending per sale varies, but just like in the instance of Chick-fil-A, it can be sizable. Sixty-seven percent of customers say they’ll pay more for a great experience. They will spend more, and they’re even willing to pay more when the buying experience is simple, intuitive and rewarding. Simple drives enjoyment. Enjoyment drives engagement. Engagement drives revenue.
The final, and maybe most important reason businesses are scrambling to figure out how to best serve their connected customers is that they’re loyal — and they will tell others about your business. Loyalty in today’s world is tougher than ever before, and to truly inspire loyalty beyond reason, it’s going to take more from your brand than ever before.
It’s proven that connected customers are more loyal to brands and companies that offer them great experiences across the board. According to Salesforce, 64 percent of connected customers say that providing an excellent experience strengthens their loyalty. But this loyalty must still be earned. Consumers are increasingly more informed and have access to the world at their fingertips. But when the battle is won, connected customers will stay with a company longer than other types of customers if the experience is superior. If they like the experience, they’ll return to your business over and over again.
Loyalty is the gem sitting on top of your gold mine because each time a customer returns, they spend more, allow you to learn more about them, and potentially save you money — all at the same time.
And it’s absolutely true that, as valuable as they are, winning over connected customers isn’t free. Neither is keeping them. Investing in experience, whether digital, mobile or physical, is likely the most important thing you can be doing right now. Giving connected customers what they expect requires an investment of time and money as well as commitment from the C-suite down.
The quadruple value of connected customers makes it not just worth the investment, but essential to survival. If your business doesn’t deliver on their needs, rest assured someone else will.