In today’s digital age, it’s easy to forget how far customer service has evolved. Christmas 2002 was the first time I used Amazon, hoping to escape the crowded shops by ordering a few gifts for friends and family. I remember buying a spectacular Stanley Kubrick DVD box set, ordered in plenty of time. But to my disappointment no box set ever materialised and I was left with no choice but to venture out and purchase another. When I complained to Amazon, expecting to provide a lengthy explanation of the situation, I was astonished when another set was dispatched without question. No aspersions were cast on my honesty, nor whether the package had actually arrived, just a replacement product dispatched in a timely fashion. For me, this signalled a turning point; a new standard of customer service had been set. What’s more, the replacement DVD still has pride of place on my shelf to this day.
15 years later, this level of service has become the norm. Customers expect efficiency and brands who fail to provide it fall behind. This provision of quality service has become functional and no longer a differentiator when it comes to our engagement with brands. As a result, the question of what makes us loyal becomes more difficult to answer.
The loyalty effect
To gain a better understanding of how brands can earn consumer trust, REaD Group recently commissioned research into retail trends, which found that Amazon is the most trusted retailer by consumers. The research revealed that reward schemes can be a particularly successful method of promoting trust and loyalty with customers, with an intrinsic link between retailer trust rating and how long a loyalty programme has been running.
Loyalty schemes are becoming increasingly popular with consumers, as people begin to recognise the value of sharing their personal data in return for tailored offers. In fact, out of the top ten most trusted retailers, seven have loyalty programmes, pointing to strong evidence that brands with highly established schemes have greater consumer trust. Tesco’s Clubcard is a great example of an effective reward scheme; it has 17 million UK users and the supermarket was ranked second in the list of most trusted retailers.
The regulatory challenge
However, implementing a reward scheme alone is not enough to secure trust. Today’s consumer values transparency and brands must strive to be as honest as possible if they are to succeed. Transparency is also a key part of the EU General Data Protection Regulation, which is due to come into force next May and applies to any business in possession of European data. The rules will force companies to be more transparent about the data they store, how it was obtained and how it is used. With fines of up to $20 million or four per cent of annual turnover, brands need to take this seriously.
This is not just a European issue. Brands must be seen to both preach and practice strong values for trust to be truly sustainable. This is particularly important today, as consumers are often quick to share negative experiences on social media or in online reviews. Public reviews can be damaging if negative, but brands also stand to benefit from positive reviews, so customer service is extremely important.
New technology offers a way of maintaining a good relationship between brands and consumers. Novel ways of communicating enhance emotional connections in what is perceived to be an increasingly non-personal world. Looking ahead, brands should utilise these developments to increase trust and build a profitable future. Good customer service now goes beyond sending out a replacement Stanley Kubrick boxset.