Why Online Retailers Care About Post-Purchase

In 2005 A.G. Lafley, who at the time was CEO of the world’s largest advertiser, Procter & Gamble, introduced a marketing concept he called “the moment of truth” for building brand loyalty. Soon retail brands aligned their strategies around two critical moments: 1) when a customer decides whether to purchase a product, and 2) when a customer uses the product for the first time. With the rise of new technologies like the internet and mobile, there are additional critical junctures for increasing the buying likelihood, including at the research stage. Five years ago, online review sites such as Yelp and TripAdvisor led to Google introducing the zero moment of truth, a crucial part of the buying process. Meanwhile, stats show that half of e-commerce is now done on mobile, heralding in the mobile moment of truth.

When a customer makes a purchase online, there’s an “experience gap” from the time the customer checks out to when the product arrives. This is the new moment of truth for online shoppers.

Today, retail brands create customer experiences around these four moments and focus on driving shoppers to click the “buy” button. Yet it’s important for brands to remember this is not the end of the journey for the customer. Rather, it’s the beginning of a relationship. When a customer makes a purchase online, there’s an “experience gap” from the time the customer checks out to when the product arrives. This is the new moment of truth for online shoppers. Providing a positive experience at this time of anticipation is a tremendous opportunity for retailers to deepen their relationships with customers and build loyalty for their brands. Surprisingly, only 16% of companies are focused on customer retention, even though it costs at least five times more to acquire a new customer than to keep an existing one.

It’s important for brands to remember that clicking "buy" is not the end of the journey for the customer. Rather, it’s the beginning of a relationship.

Shoppers expect a seamless shopping experience — no matter where they are, what device they are using, or how they choose to shop. Brands understand this: 84% of retailers say creating a consistent customer experience across channels is very important. While product fulfillment was traditionally considered a supply chain function far removed from customer experience, the rise of the omnichannel shopper and on-demand services such as UberRUSH and Postmates are blurring those conventional lines. More than ever, customers want personalized shopping experiences throughout the entire journey, right up to how and when they receive their products.Focusing on the post-purchase experience is the next frontier for online retailers. Previously, retailers handed off the customer experience to a third party, like FedEx or UPS, which focused on delivery. Now, retailers are extending the customer hand-holding post-purchase with beautiful branded interfaces, delivery visibility, and personalized content.

By streamlining customers’ paths to purchase and bringing them back directly into the loyalty loop, brands can convert one-time shoppers into lifelong brand advocates.

Let’s take a closer look at Sephora, a retailer that is taking advantage of these new moments to engage with customers. (Sephora is a client, along with several of the other companies mentioned below.) The beauty giant’s success stems from its relentless pursuit to link a shopper’s experience throughout the entire customer journey across all channels: digital, mobile, and brick-and-mortar stores. For example, Sephora offers in-store customers the ability to get online makeup tutorials at stations called the “Beauty Workshop.” In the latest update to Sephora’s mobile app, an augmented reality feature now allows shoppers to view themselves moving in real time while trying on digital makeup.But the personalized experience doesn’t end there. Even after they click “buy,” Sephora’s customers receive a branded delivery tracking page that displays the status of their shipment. At the same time, customers receive recommendations, deals and educational content to keep them excited about their purchases. Should a customer need to return a product, Sephora’s integrated returns solution demystifies complicated policies while providing the retailer with precise information about what’s coming back, when and why. Every step of the way, Sephora is trying to improve the customer experience and maximize loyalty.Here are four key ways retailers can excel in the post-purchase experience:

Continue the conversation.

One of the first things retailers can do is to own the post-purchase experience, rather than leave it up to chance by sending their customers off to third-party sites. Retailers like Nordstrom, REI, and Anthropologie have customized package tracking experiences that provide visibility into the delivery. Customers can also sign up for SMS notifications and find FAQs without needing to leave the branded experience. Not only are customers better informed and call center volume decreasing, these actions open up new marketing channels for retailers to reach an already captive audience.

One of the first things retailers can do is to own the post-purchase experience, rather than leave it up to chance by sending their customers off to third-party sites.

Provide shoppers with relevant, personalized information.

Customers awaiting delivery of their product are open to communications from the retailer, especially if it’s customized. 73% of customers prefer to buy from brands that use personal information to make shopping experiences more relevant. Birchbox, a monthly online beauty subscription service, gives customers a preview of what to look forward to with monthly videos of what’s in the box. Levi’s drives further customer engagement by promoting new products to existing customers based on their previous purchases and preferences using the post-purchase channel.

Transform a bad customer experience into an amazing experience.

A lot can go wrong during the fulfillment process that can frustrate customers: a wrong item shipped, an incorrect address, a package delayed due to weather. While these instances may be out of a retailer’s control, they still reflect poorly on the brand. However, this doesn’t mean angry customers are lost forever. A brand’s ability to react to these circumstances in a timely manner is a huge opportunity to win back customers and create positive word-of-mouth. Companies like Gap and Bed Bath & Beyond are capturing customer sentiments at the time of delivery, when problems are most likely to be discovered and reported. By monitoring customer’s behaviors and proactively taking action to help solve their problems quickly and easily, they’re winning back customers’ hearts.

Create an organizational environment that supports a great post-purchase experience.

As customer experience becomes top priority for retailers, they must ensure internal teams within the organization are aligned. In particular, it is critical to foster a relationship between supply chain, e-commerce, and marketing teams in order to deliver an extraordinary post-purchase experience. In the past, these teams may have worked in silos, but any customer experience gone awry, whether related to supply chain or marketing, reflects poorly on the brand. When they work in tandem with the appropriate resources, budget, and metrics in place, retailers will be poised for success.

Retailers need to create an end-to-end customer journey, so customers come to love and crave interacting with them. A lifelong customer is not an accident — it’s the result of a bookended experience.

We’d love to hear how you approach improving the post-purchase experience, or if you’ve been inspired by great examples out in the wild - hit us on Twitter @narvarinc.This article originally appeared in Harvard Business Review