A Tale of Two Experiences
Rahul is a first-time visitor to a sports goods website. He has no previous history with the company. He enters his mobile number / email ID and gets the base version of the site. The only recommendations are based on popular purchases and categories. As Rahul’s browsing increases, so does the personalisation.
Shalini is a Best Customer of the same brand. She is auto-logged in when she visits the website. The home page shows a curation of products just for her. Her previous purchases are also shown and complementary products are listed for each purchase. A chat window opens up with a service agent who is familiar with her transaction history. The agent guides her to the next possible purchase ideas. Shalini can also interact with other Best Customers like her as part of the ‘Community’ option. She wants to buy new sports shoes but is not sure of the fit. The agent tells her that she can try them out for free and return in 15 days for an exchange in case the fit is not perfect. She is also entitled to expedited shipping and will get the shoes the next day. Shalini will only be billed after she is completely satisfied – a feature available only for Best Customers.
A few months later, Shalini goes to one of the outlets of the same sports brand. She enters her mobile number on a keypad at the entrance. She is immediately recognised as a Best Customer, and a customer service assistant comes to provide her to guider her through her shopping experience. The assistant has full access to her online purchase history and knows her preferences, and is able to ensure speedy service. When Shalini is ready to checkout, she is guided to the front of the queue for priority billing. Shalini is also told of a new fitness community that the brand has set up for their Best Customers, and she now has exclusive access to it. She can connect with others like her.
A week later, Shalini gets an email saying that one of her friends, Neha, has become a customer. When Neha made her first purchase, she mentioned Shalini’s name as her referrer. Shalini earned 100 points and will now get a small commission on Neha’s purchases. Shalini did not have to send any link or code to Neha – all Neha did was mention Shalini’s name when she did her first transaction.
A couple months later, Shalini gets an email saying that a new product is being launched, and she can get it before it becomes available to the mass market. All she has to do is to click and pay. Her size is already known so the entire transaction is frictionless and done in seconds.
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With such a wonderful experience, it will be no surprise if Shalini maximises her spend in the sports goods category with the brand. There is very little reason for her to consider alternatives. For the brand, her ‘extreme loyalty’ also yields rich dividends. Customers like Shalini make up just 20% of the entire base but account for 63% of revenue. A small increase from such customers is the key to doubling profitability. Shalini’s experiences, shared with her friends on Instagram and in 1:1 conversations, also gets the brand more customers like Shalini – who become future Best Customers, thus creating a profits flywheel which maximises the industry’s highest spending customers with the brand. This drives even higher profits and more importantly it also reduces the profit pool available for competitors. Customers like Shalini thus create a moat that lays the foundation for the brand to build an invincible business.
