What can the last US election teach us about Retail in 2020?

Cast your mind back if you can to the November 7th, 2016 presidential election.  Hillary Rodham Clinton is on the precipice of defeating Donald Trump to become the first female President in the history of the United States.  Time Magazine has just published an article in which no less than seven highly-esteemed polling organizations predict a Clinton majority.  Celebrations are already beginning.

Yet as history would soon reveal, the experts in this case got it wrong.  Very wrong.

When pressed for an answer as to how they got this so wrong, the polling experts’ explanation was Non-Response Bias (NBR), in which the results of a study are skewed by a disproportionate sample base.  Put a bit differently, people who do not take surveys are not represented in the results.

Where the pollsters fell down was in assuming their data set truly represented the national opinion.  They failed to consider that a large (and influential) portion of the public simply hadn’t responded to their pre-election polls at all.  They preferred to cast a different kind of vote – straight to the ballot box.

So, how is NRB impacting Retail?

While the political landscape of 2016 might not immediately present itself as a direct analogy for the state of contemporary retail, dig in a little and the parallels start to reveal themselves.

Current estimates suggest that in the last 20 years, the median response rate for feedback surveys for all businesses has dropped from around 20% to just 5%, with many brick and mortar retailers falling well under 1%.  At the same time, the rate by which customers are more likely to ‘vote with their wallet’ is higher than ever.

96% unhappy customers won’t complain, 91% of those customer will simply leave and never come back – 1st Financial Training Services 

The DANGER of the ‘Silent Majority’ caused by NRB 

The truth of it is retailers and political pollsters, both, struggle with a common issue: the vast majority of people today simply don’t have the time and aren’t willing to engage via traditional survey methods, whether it’s printed on a receipt, emailed, or even an intrusive text.  Instead, the tendency of the ‘Silent Majority’ today is to simply ignore these requests for input, and this poses a major problem for any business that wants to hear what their customers think and adjust accordingly.

So, how, exactly, is NRB dangerous for retailers?

Imagine a pyramid, if you will, with executive strategy and company direction at the top, mid-level management and corporate decision making in the middle, and day-to-day operational decision making within each store at the bottom of the pyramid.

NRB permeates it all. Informing strategy and company direction based on a biased, anaemic representation of the customer base can set companies back years.

The NRB Pyramid
The Impact of NRB: a lack of feedback impacts all areas of your operational decision making.

Today’s trickle of feedback often means project teams and various departments are slow to react as it often takes quarters for patterns and insights to develop.  To add insult to injury, testing new initiatives in store also takes much longer than it should delaying time to market, ultimately, making the organization appear sluggish and behind the times.

But, probably worst of all, NRB results in huge blind spots and a general lack of visibility into operational execution, associate behaviors and customer perceptions at the individual store level—where the rubber meets the road for the majority of our clients with most seeing 85% of sales coming through their stores.  What’s the old adage, “Your brand is only as good as your last customer experience.”

Actually, I rather prefer Warren Buffet’s version, “It takes 20 years to build a reputation and five minutes to ruin it.  If you think about that, you’ll do things differently.”

Well, to be able to do things differently, to become more agile, and to get better connected with the heart of the customer base, companies must find a way to tap into the ‘Silent Majority’ caused by NRB.

But, what do you do when the majority of your client base is seemingly inaccessible?

Awareness is Half of the Battle 

The good news is that a number of providers in the CX space are increasingly aware of the issues inherent with traditional feedback methodologies and the resulting biases.  By working with a provider that is transparent about these issues – and pro-active in terms of providing ways to counteract them – there’s an opportunity to tap into that once ‘Silent Majority’ and in turn gain a competitive advantage.

Here’s a selection of points to consider if you’re looking to build an effective customer feedback program that accounts for and has the potential to eliminate NRB.

  1. Examine where your data is coming from

When looking for a partner or vendor(s) to support your CX efforts, consider where the data being collected to support their recommendations is coming from.  How large is the audience being polled?  Are you receiving enough responses to be actionable on a daily, weekly or monthly basis?  Is your data at risk of being unrepresentative and misleading, NRB?  Are you collecting enough data at the store level to support in-store test and learn and pilot initiatives in real-time, thereby improving the agility and ability to adapt more quickly to a constantly changing retail environment?

  1. Revisit your goals for the program

While many CX platforms are very good at focusing on feedback that allows for ‘brand level’ analysis, building a data set that can be used at a ‘store-by-store level’ is often the greatest challenge and, frankly, the biggest gripe of most store operations teams.  Look for providers that are able to give you both a brand overview as well as more granular store level precision.

If the ultimate goal of the program is to drive measurable improvement, having visibility (ideally down to the hour) into execution, associate behaviors and customer perceptions for every store will be critical.  While most KPIs are rolled up to the brand level, improving performance starts within each individual location, which requires the ability to tap into the thoughts and perceptions of the majority of customers that shop that location each day.

  1. Explore the potential of collecting feedback at point of sale (POS)

Collecting feedback as part of the checkout process has proven to yield the highest customer participation rates in the industry, with many retailers experiencing response rates well over 65% depending on the placement of the question(s) within the payment journey.

Note: To ensure the highest possible response rates with minimal interruption, asking one question per customer (with a set of rotation questions throughout the day) is a best practice.

Another critically important benefit of integrating surveys directly into the payment journey is the immediate understanding of the link between Customer Experience and sales.

Having the ability to share with each store how their individual level execution and the customer experience they are creating impacts their financial performance, specifically, is the key to improving store performance each and every day. And it’s this aggregation of continuous small improvements across the estate which will drive those brand level KPIs through the ceiling.

So, the next time you’re considering whether your CX data collection practices and resulting datasets are fit for purpose, think back to those pollsters on the night of November 7th, 2016.  If something doesn’t feel quite right, perhaps it’s time to ask, am I missing critical information that could fundamentally change the trajectory of our organization?

____

Sam McKeveny is the VP Enterprise Sales for North America.  If you’d like to reach out to him, he’s always happy to discuss how TruRating can help you or your business – try him by email or feel free to connect on LinkedIn.

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