customer value models for retail€¦ · to avoid the pitfalls, here are our top ten tips for a...

www.newtidea.com | © 2018 Newt Idea Limited

Customer Value

Models for Retail Retail competition has always been fierce, and the arrival of new, younger brands has shaken things up even further. A robust set of customer-centred strategic principles is crucial to helping your business stand out, build loyalty and drive growth. This whitepaper looks at three models, that together, build a clear picture of customer value which sets the groundwork for success.

Amanda Salter July 2018


A vision statement is a single sentence that lays out the key aspects of what your customers need and expect from your brand – and the experience you want to give them. The purpose of your vision statement is to differentiate your brand from everyone else and ensure your propositions are aligned across the business. It should also be used to inspire employees and get everyone singing from the same hymn sheet.

Essentially, an effective vision statement will underpin your business strategy and be a guiding force for change – but getting it right isn’t easy. Generic statements that could apply to any organisation are scarily commonplace.

To avoid the pitfalls, here are our top ten tips for a great vision statement:

Part 1

Define your customer experience vision statement

1. Base it on realityForget pie in the sky. Your vision isn’t about what you or your customers would love if money were no object. It must have an achievable outcome. This means basing it on real, validated needs that your business is willing or able to invest in.

2. Focus on the bigger pictureYour vision needs to work across every channel, device and context. Don’t fall into the trap of creating separate visions for digital and in store.


3. Keep it for your company’s eyes onlyA vision should guide and steer your marketing channels and align strategies. But it’s for internal use only. It’s not a customer-facing marketing strapline.

4. Put your customers at the centreCustomer insights form the heart of your vision. When you know your customers inside out, you can determine their key motivator and use this to drive change. An example could be, “We are the trustworthy supermarket”. This wraps up a whole bunch of implications – quality food that’s always in date, offers without the small print, ethical sourcing, home deliveries that turn up on time etc. A supermarket that delivered on every aspect of being trustworthy, without needing to mention it in multiple ad campaigns, would have a definite competitive edge.

5. Be specificYour vision should act as a clear barometer to measure the value of internal behaviours, initiatives, actions and strategies. To do this, it must be specific to your business and customer segments.

6. Make it uniqueYour vision is all about your brand and how you offer something different from your competitors. So show you’re not like all the rest. For example, is your brand’s key differentiator speed, convenience, trust etc. Getting down to the nitty gritty of your USP will help you stand out.

7. Be inspirationalYour vision should motivate all your employees – not just the top tier. It should form a picture that captures everyone’s imagination and create a desire to help make the vision a reality.

8. Don’t create a sound biteYour vision is not about crafting award-winning copy. It doesn’t have to be pithy or clever. There’s no maximum word count. So don’t get hung up on style. Just focus on being clear, concise and directional.

9. Use it across the businessIn 2017, PWC reports that only 50% of consumers feel they get a consistent and superior multi-channel experience1. Aligning to and delivering on your CX vision will help you do that, driving customer loyalty, engagement, growth and profitability for your business.

10. Let it flex and bendYour CX vision statement shouldn’t be set in stone. It needs to be flexible enough to change in line with customer expectations and needs.


Establish a hierarchy of customer needs

Deloitte expects that a strong customer experience leads to stronger financial performance, and drives competitive differentiation2. This shows it’s more crucial than ever to get yours right. Not just in terms of the experiences you offer, but also in the sequence you present them to your customers.

It’s easy to get lost in the sheer volume of customer experience initiatives available. So before you jump in at the deep end, take a look at the model below. This is an extension of Maslow’s classic ‘Hierarchy of needs’ model – and the concept is the same: You need to deliver on the lower levels before your customer will be ready to accept the next step.

InspiringYou inspire me to try new things

ReliableYou always get things right

PersonalYou know me and act accordingly

ConvenientYou provide me with more ways to shop easily with you

How to establish your hierarchy of needs

1. Get the basics rightThe lowest level is always about getting your foundations right, in other words, dealing with the hygiene factors of a retail business. This means avoiding common mistakes, addressing complaints and fulfilling basic customer expectations. Always focus here first, even if it takes up most of your effort and budget. You need to get this spot on before you can move on.

Part 2


2. Build on the basicsOnce you have a stable basis, you can then start looking at what makes a difference for your customers at the next level. It’s useful to have a view of what each of these levels is for YOUR business and YOUR customers.

3. Choose your levels wiselyYour levels need to reflect your customer needs and be driven by what matters most to your customers, right now. As already mentioned, the bottom level is your basic requirements (in our example, reliable). The higher up levels could be things like: Convenience, Personalisation, Inspiration, Community presence, Deeper insights, or Rewards. Once you’ve established what’s right for your customers and business, you need to prioritise your levels and use them to fuel your strategy and initiatives.

4. Stick to your hierarchyYou’ve got your hierarchy, now you need to make sure you follow it. There’s no point delivering loads of customer initiatives at level 4 if you haven’t properly addressed the issues at level 3. Your customers won’t be ready to accept level 4 before you’ve delivered on level 3.

5. Be flexibleBe prepared to change your hierarchy of needs as customer expectations change. Things that are differentiators today are likely to become basic expectations at some point soon. A few years ago, being a multichannel retailer was a differentiator and could have featured in hierarchies of need at the time – now it’s just a basic hygiene factor.


Part 3Create customer journey phases to improve experience

Customer journey phases should be a crucial part of your strategy and will help define your customer experience.

Customer journey phases give an overview of the stages a customer goes through when buying your products or using your services. The best customer journey phases are based on data-driven research, which means taking time to understand how your customers are interacting with you. Your phases should form a living document that evolves as needs change.

Below is a classic example of the phases in a supermarket customer journey. This is based on data we’ve uncovered through our work with supermarket retailers.

Learn Shop Enjoy


Once you have established your customer journey phases, you can use them to:

1. Benchmark your experienceStats and analytics from your existing customer feedback and tracking systems can feed into your customer phases to give the quantitative picture. This will let you determine how well your current experience is performing against each phase, from a customer’s perspective.

2. Highlight improvement opportunitiesYour customer journey phases will show where you can address gaps in your offering to improve your customer experience. Research shows that improved experience can grow revenue3 by 5-10% over a span of three years. In the example above, we found gaps in Insight and Control, Avoiding Waste and Appreciating the supermarket.

3. Plan for the futureYou can focus in or zoom out to get a bird’s eye view of your future planned initiatives and where they sit in your customer journeys. Are they in the right areas at the moment? What improvements will make the biggest difference to your customers?

4. Broaden your visionHaving an end-to-end view constantly in mind helps you look beyond the core activities of browsing, choosing, and paying. For example, are you offering sufficient aftercare? Or are there any at-home opportunities that would increase customer satisfaction?

Customer journey phases take time and effort to get right, but they’re worth it. The result is a better understanding of your customers and their journey, which you can use to improve experiences and build customer satisfaction.

1Pwc.com. (2018). Pwc.com. (2017). Customers are calling the shots. [online] Available at: https://www.pwc.com/gx/en/advisory-services/assets/customers-are-calling-the-shots.pdf 2Deloitte Greece. (2016). Rethinking the customer experience to win | Deloitte Greece | Consumer Business | Insights. [online] Available at: https://www2.deloitte.com/gr/en/pages/consumer-business/articles/consumer_review_deloitte_greece.html3McKinsey & Company. (2016). The CEO guide to customer experience. [online] Available at: https://www.mckinsey.com/business-functions/operations/our-insights/the-ceo-guide-to-customer-experience


Your business. Better by design.

Newt is a Service Design agency. We design original, powerful and seamless digital experiences that get your customers excited. Helping your business boost sales, build profitable growth and stand out from the crowd. We help you:

• Quantify the return on investment for CX improvements

• Move your organisation to become more customer-centric

• Uncover your customers’ real needs, and how they’re evolving

• Map your customers’ journeys to expose pain and pleasure points

• Create brilliant digital and real-world experiences that drive success

+44 (0)20 3515 1030 | [email protected] | www.newtidea.com

Newt Idea Ltd, 4 Wellesley Terrace, London, N1 7NA

customer value models for retail€¦ · to avoid the pitfalls, here are our top ten tips for a...

Documents