Optimising Omnichannel Promotions for Customer Satisfaction
For a while now, customer satisfaction has been the touchstone of retail, spelling the difference between success and doom. To boost customer satisfaction, retailers shower customers with promotions via websites, messages, billboards, and other channels. Retailers do this despite not knowing whether the omnichannel promotions lead to increased customer satisfaction or not. A study based on two experiments attempts to answer this question: Does customer satisfaction with the shopping experience vary depending on the type of omnichannel promotion offered to customers?.
The study found that, in general, goal-congruent promotions provide greater customer satisfaction than goal-incongruent promotions. Goal-congruent promotions are those that help consumers meet their shopping goals. For example, an SMS about a sale on umbrellas is goal-congruent for a person shopping for raincoats or weatherproof boots, but goal-incongruent for a shopper looking for party wear.
Within this, there are slight variations based on the product category. Utilitarian shoppers (customers with clear, specific shopping goals) and shoppers of utilitarian products (e,g, hardware and medical products) experience greater customer satisfaction from goal-congruent promotions. Hedonic shoppers (customers for whom shopping is “fun”) and shoppers of hedonic products (e.g. entertainment and chocolates) are highly satisfied with goal-congruent promotions but also satisfied with incongruent ones.
[Read more about how hedonic and utilitarian shopping goals relate to impulse buying.]
The study also revealed that monetary promotions such as discounts, buy one get one free and cashback offers elicit higher customer satisfaction than non-monetary promotions such as invitations to events, sweepstakes and contests. This is because monetary promotions provide benefits such as cost savings and higher value, driving short-term sales. They also have a broader appeal, with both utilitarian and hedonic shoppers finding them attractive. Non-monetary promotions, on the other hand, focus on brand building and developing consumer relationships. They have minimal appeal for utilitarian shoppers but appeal to hedonic shoppers due to their experiential nature.
Service excellence mediates the positive effect of goal congruent and monetary promotions. Service excellence is a shopper’s measure of how well a retailer serves to fulfil their shopping goal. Goal-congruent and monetary promotions lead shoppers to perceive higher service excellence, leading to higher customer satisfaction. Let’s say a shopper’s goal is to purchase a smartwatch. A discount coupon on smartwatches will make them feel that the retailer has higher service excellence, and they will also experience higher customer satisfaction.
Retailers can use these findings to create more targeted omnichannel promotions for different types of products and shoppers. They can use data from shoppers’ sales histories, browsing choices, and other touchpoints to identify shopping goals more accurately and offer more goal-congruent promotions.
Retailers can also use this data, along with product categorisation, to identify omnichannel promotion strategies best suited to utilitarian/hedonic shoppers and products. Retailers of utilitarian products will benefit from a more integrated omnichannel promotion strategy focused on goal-congruence and monetary benefits. Retailers of hedonic products have a wider range of promotions available to them. Figure 1 gives a clear example of the 8 types of promotions retailers can offer based on goal-congruency and monetary value.