Are You Going to Compete on Price, or Experience?

A colleague recently forwarded a fantastic article to me. It reignited a debate we frequently have with clients about campaign objectives: should they be geared towards driving experiences, or sales?

The answer is almost always sales, as metrics regarding experience and engagement are a little fluffy, right? Campaigns that generate high opens, impressions, and clicks, but low conversions, are campaigns that need to be optimized, enhanced, refined, and improved.

Challenging Objectives

The reason I think we really need to challenge the success metrics we have historically expected from campaigns, and move deeper into campaign objectives, is articulated in a somewhat critical analysis of Amazon.com by Tom Goodwin of Zenith Media:

Shopping on Amazon when it works best isn’t an experience, it’s a lack of experience. It’s the purest example yet of the act of removing every possible barrier. Every piece of friction. Online retail is, for most sites, endless A/B tests to reduce the chance of anything getting in the way.” 

First of all, I totally agree with him. Second of all, my wife and I repeatedly buy from Amazon for exactly that reason: it’s just so easy. For example, we have an Amazon Dash button in our kitchen, programmed to order our favorite coffee pods. It’s an amazing experience; we simply push a button when our stock is running low, and the products arrive at our door, often within the same day! We never see a bill, we are never bothered by payment information or order confirmations, it’s a perfect example of a frictionless customer experience.

I love Amazon because when I make the decision to buy something, they make it easy for me to buy it. It’s simple to check out and get my goods delivered where and when I want them. I even pay Amazon to be a Prime member so that I can gain access to special perks and free shipping.

The Importance of Experience

While Amazon succeeds at driving sales by making life easier, it falls short when it comes to the website shopping experience. I hate it. Let me be clear, I don’t merely dislike it; I actively hate it. While I do like how much easier Amazon makes my life, I don’t like spending time interacting with the Amazon website. Why? Amazon didn’t build a business around introducing me to new experiences and new products, it built a business around helping me get the best prices and the best experiences once I have already decided what I want to buy.

How do I know this to be true? I have experienced it.

Okay, so my role here at Emarsys might make me a bit more biased than the typical online shopper, but consider the Amazon.com user experience. The categories are frustrating, clumsy, and don’t make a lot of sense. Furthermore, although Amazon has a wealth of customer data about me, I rarely find its product recommendations to be relevant to my needs or preferences. Amazon has data about my Kindle usage, the shows and movies I stream, my shopping history, and my preferences as a Prime member, but they still somehow manage to miss the mark.

A Point for Personalization

Unfortunately, many retailers make the same mistakes as Amazon. Quite often, they not only fail to deliver highly personalized and engaging customer experiences, but they actually swing in the other direction, making purchases more difficult. This is especially true within fashion retail, where customers are faced with a wide range of decisions they must make before they can place an order. Customers must choose a shipping method or select in-store pickup. They must provide a promotion code if they want a discount, and they must make the conscious decision to navigate through multiple categories, sub-categories, and pages to find the perfect shoes to complement the jacket they just added to their cart.

Then there are retailers that understand the importance of creating experiences that establish emotional connections and building meaningful relationships with customers. Some of these brands sell products that are “aspirational” for many, meaning that people want them but can’t afford them. Who hasn’t looked at a house outside their price range, or a car they knew they couldn’t afford?

Nevertheless, customers spend time with the brand, browsing the products anyway, perhaps in part because the website is easy to navigate and full of gorgeous images, helpful video, and price comparisons. But I think it’s most often because the brand has succeeded in providing an experience that makes us feel as though we can still be a part of, and own a little piece of, the brand. For many of us, we spend time browsing luxury goods online, not because we’re going to buy them now, but because we want them someday, and until that day comes, we will relish the experiences and escapism provided simply by engaging with the brands.

Some brands have successfully bridged the gap between creating a frictionless buying experience and an engaging shopping experience. The beauty is, when they get it right, these brands can drive both experience and sales as a result. For example, Burberry created a digital experience in its stores that makes shoppers want to spend time there, and Net-A-Porter launched a magazine for its customers to address a known need (their target market already read fashion magazines, they just tried to provide something better).

However, not every website is inviting or fun to browse, and yet such websites still drive sales. So why do people buy from terribly constructed sites, with poor experiences and overly complicated checkout processes? Because one of the top reasons people buy online is still price. That’s why discount codes and coupons work; people love a deal. But they’ll also compare prices against other retailers, just to ensure they’re getting the best deal, because people also like feeling as though they’ve won.

Marketers must find the equilibrium between delivering personalized marketing that makes customers feel valued, and ensuring their buying experiences are as frictionless as possible. This is about optimizing the website and mobile experiences to make sure it’s easy for customers to find the products they already know they want, just as Amazon does.

But, unlike Amazon, we should also use relevant recommendations to improve navigation from one category or product to the next, as well as leverage personalization to shorten the amount of time required for customers to find what they are looking for.

Don’t forget to humanize that experience! Make sure to reserve time to showcase the brand, values, and story behind the products. This is what truly builds relationships, affinity, and differentiation from competitors, including Amazon. Invest in your content marketing, invest in your photography, and invest in your brand value. It all matters – a lot.

Final Thoughts

As marketers, we have a choice: we can compete in a very aggressive online market where the barrier to entry is low and the competition on price is growing every day, or we can try to stand out in that crowded market and create a differentiated customer experience. We have the opportunity to establish an environment where customers actually want to spend time, and a buying experience that keeps them coming back.

Remember, someone can always be cheaper than you, if only for a day, and get the sale. But if you create an experience that builds a connection with a customer, that bond is exponentially more difficult to disrupt.

To learn more about how to gain greater understanding of potential customers and develop personalized marketing strategies to win them over, download our whitepaper.

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Monday, 17 April 2017