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Getting Your Customers Beyond Price

Posted by Cara Lousararian on Tue, Mar 15, 2016

online_shopping.jpgCall me lazy or call me smart, but I now do nearly all of my gift shopping online. Shopping online is easy, but it also brings up a whole new question around loyalty to specific brands and retailers. Five to ten years ago, I felt like getting the best price/deal was more important to me than shopping for specific brands or at specific retailers. Maybe it’s because I’m older, earn more money, or buy for more people (hello, in-laws!), but I’ve started considering other things than just price, such as:

  • Return policy timeline. A 2 week return policy doesn’t cater to the super-organized planners (like me) who want to buy presents well in advance
  • Ease of returns. A gift that can’t be easily returned is an inconvenience, so I look for retailers with hassle-free returns
  • Product warranty or guarantee. Sure things break, but I definitely don’t want my recipient to pay for a replacement

Because you can’t feel, touch, or smell products that you buy online, other factors play a much more important role in the decision making process—I’ll pay a higher price for something just because I know the store and its policies are convenient for me and those that I’m shopping for. We’ve all gotten that ugly sweater without a gift receipt. No one wants to be “the bad gift giver” (sounds like a Seinfeld thing, right?).

Two retailers who get my business, despite the higher price tag, are Nordstrom and L.L. Bean. Here’s why they have my loyalty:

  • Last Christmas, I participated in a Secret Santa gift exchange with my husband’s family, and I was assigned my husband’s 25-year-old cousin. While I could have just bought him a Patriots t-shirt, I wanted to be more creative and thoughtful. I went to Nordstrom.com because of their superior return policy—they take anything back at any time. This allowed me to take more of a gamble on choosing his present because he could easily return or exchange it if he didn’t like it.
  • My sweet rescue dog, Nala, has an obsession with trying to “soften” her bed (i.e., paw at it repeatedly with her sharp nails). I’ve had her for 6 years, and I have lost count of the number of beds I’ve had to buy to replace ones that she’s ripped to shreds. I took a look at L.L. Bean’s dog beds because I know the store’s return policy and product guarantee rivals most other stores. I had a bit of sticker shock when I realized I would be spending $200 on a bed for my dog, but the extra expense was worth it knowing that I can return or exchange the bed at any time for I know that L.L. Bean will stand behind the product and will replace it at no additional cost to me. 

Online shopping has made it easy to switch brands/retailers with the click of a button, and this undoubtedly has an impact on customer loyalty. In this world of information overload, it’s becoming harder and harder for brands and retailers to truly differentiate their offerings, especially when they lack a captive audience in their physical store locations. 

This is where discrete choice modeling and/or segmentation can come in handy—especially when there’s a need to dive deeper into uncovering purchase drivers outside of price—since most consumers will tell you they want all of the product’s bells and whistles for the lowest possible price. At CMB, we spend a lot of time in the up-front design phase, as well as in the analysis phase, combining the art and science of research to help bring the customer journey to life. This is where proper questionnaire design trumps speed as we strive to keep the story and research insights at the forefront. 

How are you prioritizing customer convenience and experience?   

Cara is a Senior Research Manager at CMB and plans to buy stock in Nordstrom and L.L. Bean after reviewing her recent credit card transactions.

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Topics: customer experience and loyalty, market strategy and segmentation, retail research