Why Customer Knowledge is Essential to your E-Commerce

In today’s online world, your e-commerce business is only as successful as the customer experience you deliver. And your customer knowledge base is the single most important key to providing a great customer experience.

This is because online customers expect to get the right information at the right time without having to pick up the phone to speak to someone. Customers today want to be able to find immediate and relevant information themselves.

• Forrester Research reports that 55% of US online adults are likely to abandon their online purchase if they cannot find a quick answer to their question or problem.

• Additionally, 77% say that “valuing their time” is the most important thing an online business can do to show they care.

• Research from Fast Company supports these findings, showing that 70% of shoppers expect online businesses to provide quick, easy, self-service options for handling inquiries, problems, and complaints.

Consider Amazon. While Amazon doesn’t exactly provide the kind of personal customer experience smaller e-commerce businesses need in order to survive, it does present a great example of what people expect when they shop online – seamless interactions without people guarding steps in the buying process. Busy, time-strapped Amazon shoppers forego the hassle of speaking with sales reps, instead adopting a do-it-yourself approach to acquiring the information they need: finding answers on an FAQ page, reading product reviews, researching personalized “buying suggestions” based on shopping history.

Amazon has not only figured out how to give customers what they want when they want it but also made it a requirement for all e-commerce businesses to invest in providing excellent self-service customer support options. Online businesses really have no choice: give customers what they want, when they want it, or they’ll find someone who will. The repercussions of losing customers due to poor customer support could be devastating:

• Every year, online US businesses lose $41 billion due to poor customer service.

• On average, a loyal customer is worth 10 times as much as their first purchase.

• 58% of Americans say that when they have a bad experience with a company, they’ll never use that company again.

Three Ways to Classify Customer Knowledge

In order to provide an efficient customers support, e-commerce businesses must have an effective knowledge base that delivers the right information instantly and that is easy to access and use. Here are three ways to think about the customer knowledge you need to collect:

1. Customer requirements, aka “knowledge about customers”.

Learn who your customers are, why they purchase from you, and what keeps them buying from you rather than your competitors. In short, develop customer profiles, or what is frequently referred to as “market segments.”

Don’t assume that everyone’s challenges and reasons for buying (or not buying) are the same, or what worked for a customer last year is what will work for them next year. Customers are not looking for pre-packaged value or one-size-fits-all solutions.  They want a problem-solving partner who knows their needs and is able to deliver specific value on an ongoing basis.

2. Customer needs, aka “knowledge for customers”.

Knowing your customers’ needs and predicting what the customer will need is critical. No business should be so comfortable with current solutions that it doesn’t consider offering additional ones. Successful businesses will look to the future and do their best to anticipate what customers will be asking for.

Predicting customer behavior and identifying trends and patterns will better position you to respond to customer needs and, thus, deliver added value to customers based on their own actions and preferences. And when companies offer value-added services, they are more likely to cultivate strong customer loyalty, providing a competitive advantage. Customer feedback surveys can help a business pair the information a customer provides with the most relevant and helpful information to customers at the time of need.

3. Customer insights and experiences, aka “knowledge from customers”.

By reaching out to customers, e-commerce businesses can learn what problems customers have with its’ products or services, what exactly they think needs to be changed, what they find annoying, what they like, and so on. The potential is limitless. Obtaining this kind of knowledge is now commonplace; most major businesses today value their customers’ opinions and base their business decisions on the feedback they receive.

Successful businesses know that a positive customer experience leads to more sales and good word of mouth. A negative experience not only diminishes the potential for future sales but can also lead to negative word of mouth that hinders new customer acquisition. And ignoring negative customer feedback can impede the growth of even the best business models, a lesson e-commerce site Advanced Website Ranking took active steps to avoid.

3 Ways to Maximize the Value of Customer Knowledge

The success of your e-commerce business depends on customer knowledge. But customer knowledge has no value unless it leads to improvements. Here are three specific ways to make the most of the knowledge you gather.

1. Customize service

Consumers have become increasingly more comfortable with providing personal information for an improved, personalized customer experience. The Cisco Customer Experience Report, which surveyed more than 1,500 consumers across 10 countries, found:

• 49% would allow retailers to collect personal shopping data in exchange for a more personalized customer service experience.

• 54% are comfortable with retailers storing their purchase history in exchange for increased personalized value.

• 86% of customers are willing to pay up to 25% more to get a better customer experience.

2. Let customers help themselves

Create a knowledge base that helps customers get answers to commonly asked questions. Doing so will save customers time, as a knowledge base will help online visitors find their answers easier, meaning fewer will resort to calling a support desk or, worse, abandoning a site altogether. These days, self-service is a crucial part of customer support which should not be overlooked. Consider the following:

• 89% of shoppers have stopped buying from online stores after they’ve experienced poor customer service.

• 83% of the more than 5,000 consumers said they consistently needed some type of support during their online shopping. 31% of them need online support immediately while 40% of them require assistance within five minutes.

• 55% of more than 5,000 customers fall in love with e-commerce businesses that provide instant access to information and support.

3. Improve customer relations

By proactively seeking feedback from their customers, e-commerce businesses put themselves in the best possible position to gain insight into any customer service shortcomings before they are made public for all to see. They can track the number and type of complaints that have been made and resolved, and see which complaints are most frequently made. In this way, a business can see how customers typically interact with its products and services, providing opportunities for the business to make any necessary improvements. It pays to provide superior customer service:

• It is 7x more expensive to get a new customer than to retain an existing one.

• A customer is 4 times more likely to defect to a competitor if an e-commerce site’s problem is service-related rather than price- or product-related.

• By the year 2020, customer experience will overtake price and product as the key brand differentiator.

Customer Knowledge = Lasting Business Success

Customer knowledge is the most competitive asset for an online business. It enables companies to serve each customer in his or her preferred way and to nurture profitable and long lasting customer relationships. And as companies grow and interact with more and more customers through increasingly diverse media and channels, having a systematic approach to gathering customer knowledge is critical.