This year, we started preparations last month and after having finalized the theme – Digital India, Digital Retail — we started exploring the topics for discussion in line with the theme and the need of the industry in the current context.

Advocating advocacy

I believe that if every business starts focusing honestly on its customers, then not only is it on the success track but it also doesn’t have to waste a lot of money on marketing channels. I also believe that acquiring customers is easier than making them buy from you regularly. What’s the toughest and most important is making them your brand advocates. I always root for allocating a major portion of marketing budgets on this rather than on customer acquisition. Hence, at every available opportunity, I try to push for these ideas.

So while we were discussing the topic ‘Customer Management’ for the conclave, I was very keen on having a session on ‘Customer Advocacy’ as well. Many among my colleagues did not welcome the idea as they felt India is probably not yet ready for advocacy. I feel, however, that advocacy has nothing to do with the readiness of a market but the brand. Customer advocacy is part of every brand marketing cycle if the brand has established its original proposition in the minds of its customers. In fact, most of the times, if the brand is truly delivering the promised value, its customers automatically start talking about it to others. They do this not with the intention of influencing others but out of sheer excitement of sharing their brand experience. By doing this, they actually land up being brand advocates. Therefore, the marketing teams need to be empowered and focused on ensuring that brand delivers its promise truly to its customers.

Identifying the gap

I once asked the CMO of a large brand why CMOs aren’t able to exercise control on brand delivery. He explained that it was because in India most consumer companies operate in silos. The marketing department communicates the brand in the market whereas the delivery is controlled by the operations or customer service team. According to him, the time has come for the problem to be discussed at the board level and for businesses, especially consumer businesses, to start implementing required technologies and processes to bridge the gap between marketing and delivery team.

Yes, technology can play a very important role in tracking and delivering brand value to customers. That’s why we see some of the e-commerce brands now adopting advocacy as the strategy for growth. Look at the recent ad campaigns by Flipkart and Amazon. They strongly communicate the confidence the companies feel in the experience they have delivered to their customers so far — A guy staking his annual increment while advocating Flipkart to his boss or a bride-to-be risking her wedding wardrobe with Amazon are very strong and bold messages. I am sure both companies have enough reasons to believe that their customers are ready to advocate their brands. Since both the brands are technology-driven on delivery and service aspects, they have enough reason to be confident of their readiness on advocacy based marketing.

If advocacy is the key aspect of their marketing strategy, then I am sure brands need to work towards putting the required technology and processes in place. The time has come for Indian retail industry to take this more seriously.

Syndicated with permission from ajayaggarwal.net.

Large players which have invested in their core infrastructure including supply chain network will be looking at revised growth strategies. I see this as a phase in which some exciting opportunities have emerged for retailers. Since the panic has been triggered by an anticipated drop in consumer spend, this can be a great opportunity to take another look at the business strategy with the consumer firmly at the centre this time.

Retailers must now begin to start giving importance to in-store service as the first step in this direction. If retailers are able to develop a clear visibility of what exactly consumers expect from their brand, it will help them to design and implement effective customer-service programs for the store staff. They will also be able to put in place an effective system to deliver consistent and measurable service.

Consumers are likely to choose shopping destinations with pleasant memories and avoid those where they have had not very good experiences. The financial effect of a poor consumer experience can be very damaging even though it may not be visible in a short span of time. Consumers are typically likely to visit a department store only once in 3 or 4 months and it would take a few months before the bad experiences are reflected in lagging sales. By then it would most likely be irreversible, and would certainly require a great deal of effort and expense to address.

To prevent such consumer erosion, retailers must put a complaint management system in place. This would provide a listening post for issues at the store, city and regional levels. To be truly effective, such a system must promptly route complaints to the appropriate business role and ensure timely response and management accountability.

The next step retailers must take is more critical. They must set up a sensitive measurement system which is alert to unwritten complaints that occur when the promise of a great shopping experience is not met. While a complaint management system picks up only routine failures (such as non-availability, staff service etc.) failures in providing excellent service during each and every consumer transaction creates silent complaints. As these complaints accumulate they can become potentially very damaging for the business.

Having covered in-store service aspects and related practices, retailers will need to now focus on making efforts towards consumer-oriented merchandise-planning, merchandise allocation and pricing and promotions practices.

During this time when every consumer is actually counting the basket value while shopping, we expect that consumers would not indulge much in impulse buying, and most of the money they spend in a store will be as per their planned shopping lists. This in my opinion can be a great opportunity to enhance basket value by delivering a great consumer shopping experience. Using historic shopping data of different consumer groups and profiles, retailers can drive accurate merchandise planning and allocation models to ensure that merchandise available in the store will lead to a near match of the planned shopping list each consumer carries. This will not only enhance the consumer shopping experience but also help to make inventory and supply-chain cycles more efficient.

This deeper insight into consumer needs will also help retailers design targeted pricing and promotions for each group and profile of consumers. Today consumers are used to shopping as per general pricing, or on promotions intended for all consumers visiting the store. Many of these promotions are not popular since they meet consumer expectations or align with the shopping list. Once the promotions are designed based on consumer needs they will not just be more effective but also enhance trust between the consumer and the retailer.

Finally, this deeper understanding of consumer buying habits will also build sufficient knowledge at the retailer end to develop a consumer-specific private label for each category, and this can help retailers to broaden their private-label portfolio. This will not only lead to meeting consumer demands competitively but also create new opportunities for increased profitability.