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The real value of own brand/retail customer feedback

Retailers today have many incoming streams of customer feedback. There’s the face to face route of in-store complaints and returns, call centre conversations, email, online chat and of course, social media.

The more proactive retailers seek out feedback via their own methods. These could include focus groups, receipt-based surveys, email or social media surveys and product panel data. For own brand retail, sensory testing and benchmark panel results are also added to the product feedback mix.

There aren’t really any bad ways to obtain customer feedback. However, there’s a need to make better use of existing customer input, enhance that feedback, and really understand the bigger picture to make an impact on the bottom-line.

The customer feedback challenge facing own brand retailers

Own brand retailers are challenged to manage in the complexity of having thousands of products from hundreds of suppliers spanning a wide range of categories. That’s a problem that national brand manufacturers typically don’t have.

Diagram---complexity

All too often, each of the sets of data mentioned above exists within a silo. The complaints department review complaints, the product development team conduct new line testing. Each of these pieces of information gives only one part of the picture – not one view of everything.

When all of this information is brought together into one view, it becomes a treasure trove of insights that are totally unique to an individual retailer. However, taking on the task of combining, analysing and visualising data from all possible sources is a mighty challenge for own brand quality teams.

Being able to collect all data and multi-channel feedback about own brand products in one place is something we have seen reap huge rewards with our clients when using our Affinity platform to do just that.

We’ve written more about the benefits of One View for own brand retailers with some excellent examples of the concept in action which you can read via the link. For this blog on customer feedback, let’s focus on quality teams and the difficulties they face when trying to wade through the high volumes of data coming in from multiple sources.

Share customer feedback with suppliers

“A problem shared is a problem halved” certainly applies here. Clearly, the easiest way to manage the high volume is to share it. Sharing customer feedback with suppliers is the first step that retailers take as they become more mature in the way they leverage customer feedback to offer their organisation the most value.

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More so, manufacturers and suppliers are the best-placed to act on incoming feedback due to their experience, expertise and passion for the product that they supply to you within their given category. By ensuring collaboration between the supplier and the retail team is easy, the work can be spread out and knowledge from the true product experts leveraged. This makes the volume easier to handle and allows issues to be resolved more effectively as and when they arise.

Sharing product feedback data with suppliers can yield big returns. They can identify problems such as consistency shortfalls. They will recognise that a product once perceived as satisfyingly spicy is now being viewed as bland.

Moreover, in the cases that often result in a crisis situation requiring a recall, suppliers can often pinpoint issues bubbling under the surface a lot quicker to avoid a wider recall. Retailers who share information will enable supplier experts to pre-empt problems not yet on a retailer’s radar and innovate for the next generation of products.

Our diagram above is based on a typical retailer with 120,000 complaints per year and 16Bn units sold. As the example ROI calculation shows, sharing information with suppliers could result in say, 20 extra pairs of eyes reviewing complaints. If this reduces Complaints per Million Units (CPMU) by 0.5 and complaints by 10%, retail teams experience increased productivity by having less calls to handle. This is worth an ROI of £250,000.

How to assess and prioritise customer feedback

When assessing customer feedback, a key step in the process is to prioritise it and decide whether action is warranted. In most cases there is a policy of acting on behalf of “he who shouts loudest”. Applying these techniques is the third step in retailer customer feedback maturity.

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In an earlier blog, A technical analyst’s guide to complaint management, we covered ways in which quality teams can look for patterns in data and identify when changes have occurred allowing them to make decisions about where to focus activity. Data insight techniques such as trading bands and beta analysis are extremely useful to find issues in the noise.

The diagram above shows that by isolating important themes and addressing slow-burning issues, hidden issues beyond the top 5 can be discovered. This works to further reduce CPMU and means critical issues are identified sooner. The ROI for this is £500,000.

However, a system based on prioritising pure volume without taking into consideration the cost or impact a piece of feedback has on the future value of a product is not looking at the full picture.

So, how do retail teams calculate the cost of quality?

The ‘cost of quality’ is a hotly debated topic amongst quality professionals in the grocery community and there are many quality teams across many retailers doing everything they can to maintain and improve the quality of products. But, without an understanding of the value they are adding or protecting, most of these teams are working in the dark. The best they can ever hope for is to maintain the status quo and protect whatever brand currency has been achieved previously.

We all know that quality must impact customer perception, but if unable to justify the cost of quality it is often hard to justify investment in quality.

We’ve just launched (January 2020) a new white paper which goes into ascertaining the cost of quality and calculating the real value of own brand customer feedback. You can download your copy for free here: Solving the product quality conundrum: the real value of own brand customer feedback.

How can quality teams identify valuable customer and product feedback?

As a quality team, what you should seek out is the valuable feedback within all the noise.

  • Collect and consolidate feedback from across all channels and understand the reach and impact of each of those channels (step two of the customer feedback maturity scale).
  • Understand the expectations of your customers around your products and use text and sentiment analysis alongside more quantitative measure to isolate the feedback that falls short of or exceeds those expectations (step three of the customer feedback maturity scale).
  • Focus your efforts on the products having the greatest impact on sales and thus your bottom-line (step four of the customer feedback maturity scale).

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As we can see in the diagram above, increasing the sophistication of your customer feedback analysis and sharing results in fewer lost sales due to quality issues. There is a 5-15% reduction in customer churn and an increased understanding of customer intent. This is worth £1m when using our ‘average retailer’ assumptions outlined above.

Remember that whilst it is true that all feedback is valuable, some feedback is definitely more valuable than others. By understanding the factors that make feedback valuable (or costly) you can prioritise your feedback management and quality team activities to offer the most value to your business. 

Conclusion

Own brand retailers face a unique challenge when sorting and analysing feedback relating to their products. The high volume of own brand products means that when it comes to acting on customer feedback and product testing, it is only the results which seem to require urgent action that are dealt with (we call this the “tip of the iceberg”).

When retailers are able to bring together the multiple streams of customer feedback and internal testing, they can create one view of product performance which will allow them to uncover actionable insights that would otherwise have been missed.

Suppliers are often an untapped resource who can share the load and offer unique category-specific expertise by collaborating with the retail team and acting upon feedback. Suppliers are the experts in their products and can also become a rich source of innovation for future products.

Prioritising customer feedback needs to become more sophisticated than reacting to the complaints making the most noise. Identifying those slow-burning issues that fly under the radar can result in unseen yet critical issues being dealt with. The ideal destination for your customer feedback process is being able to identify customer intent from feedback. When this is realised, there is a significant reduction in customer churn and lost sales.

Seeking out the valuable nuggets of quality feedback within all the data requires collation and sorting of customer feedback and product testing.

In order to begin your journey to optimize your customer feedback processes, you’ll need to build a business case.

For more insight on how you can calculate the cost of quality for your organisation, download your free copy of our white paper Solving the product quality conundrum: the real value of own brand customer feedback.

Tags: Customer Feedback Optimisation

David Taylor

david.taylor@s4rb.com

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