Your CX Might Be Driving Away Big Spenders. Here’s What to Do About It.

Improving the ecommerce customer experience has been a critical goal since 2020, when companies pivoted to digital channels and started investing heavily in technologies to make online shopping easier. In 2023, close to three quarters of companies increased their CX spending, but U.S. brands just hit their lowest CX quality in a decade, according to Forrester Research. One facet of poor CX–customer service that doesn’t meet the mark–now costs businesses worldwide as much as $3.7 trillion per year, according to an analysis of World Bank data by Qualtrics.

Retailers hoping to fix their CX issues and maintain profitable relationships with high-spending consumers need to understand where their CX investments aren’t delivering and take steps to fix them. Improving CX for the biggest-spending customers can also make the online shopping experience better for consumers who spend less and increase the ROI on existing CX investments.

Get back to the CX basics

If your brand is one of the 39% whose CX quality declined this year, it’s time to revisit the fundamentals of your CX program. Forrester uses effectiveness, ease, and emotion as its three pillars of CX quality. Dig into your site search, cart conversion, customer service, and voice of customer data to assess how your brand performs in areas such as customer centricity, relevance of personalization and offers, ease of finding what customers are looking for, ease of accessing customer support, payment options, and satisfaction with purchases, returns, and customer support requests.

Keep in mind that some CX fundamentals may matter more to customers who spend more. For example, according to a recent consumer attitudes survey on ecommerce, fraud, and customer experience, 64% percent of the $400+ per month group said that “online sales, specials, and coupons” motivated them to shop online rather than in physical stores. Just 55% of shoppers who spent less agreed. Well-heeled online shoppers were also the most likely to want to avoid sharing their payment card data with the sites where they shop. Seventy one percent of the top spenders said that payment options like digital wallets, which mask card numbers from retailers, made them feel more secure, while 63% of other shoppers said the same. Understanding what your best customers want can help you make CX improvements that deliver the most ROI.

Take a fresh look at your employee experience, too. The Qualtrics analysis found that morale among frontline workers is low, with two-thirds of new hires in these roles looking to move on rather than build a career with their employer. Employees who are engaged are more likely to provide the kind of customer experience that builds loyalty. Make sure your people have the data and tools they need to help customers and reduce frustration.

Step up your online payment fraud practices

Fraud is an ongoing CX challenge for online retailers, with 60% experiencing an increase over the past year. Ecommerce fraud disproportionately impacts consumers who spend the most online. In the 12 months before the consumer attitudes survey, 22% of the biggest spenders ($400 or more per month online) reported at least one online fraud experience. Seventy-six percent of those who’d experienced fraud said they were hit with more online fraud during that time than in the preceding year.

In contrast, 13% of shoppers who spent less had an online fraud experience in the year leading up to the survey. Among those fraud victims, just 42% said they’d had a year-over-year increase in fraud experiences. Shoppers who spent more per month were less likely to come back to a site after a fraud experience there. In the $400+ per month group, 83% said they would boycott a site where they had payment card fraud, compared to 79% of shoppers who spent less.

Expand your payment options. Adding digital wallet options can reassure your big-spending customers that your business won’t see their payment information or expose it to fraudsters, making it more likely they’ll complete their checkout. Consumers in general prefer digital wallet payments for convenience.

Move from rules-based to AI fraud detection. As fraudsters get more adept at using AI and automation to steal customer credentials and synthesize fake identities, simple rules-based fraud screening can’t keep up. AI and machine learning can detect account takeovers and unexpected customer behavior to help you protect your customers.

Do more to prevent false declines

The stakes for false declines are higher than disappointed customers and lost order revenue, although the amount of revenue lost is considerable. U.S. online retailers lost $81 billion in 2023 to failed orders, and two-thirds said they had no way to know if an order failed due to fraud, according to a PYMNTS report.

The losses continue over time, too. Forty percent of the top spenders in the consumer attitude survey said they won’t return to a site after a decline, compared to 37% of smaller spenders. The combination of fewer repeat customers and higher lost lifetime value from bigger spenders represents a lot of missed revenue for retailers who automatically decline suspicious orders without further analysis.

The consumer attitudes survey also confirmed a longstanding trend: The biggest spenders also faced more false declines of their online orders. More than a quarter (26%) of the biggest-spending group experienced at least one decline in the past 12 months, compared to 18% of other shoppers.

The reason for the discrepancy has to do with the overlap between normal shopping behaviors of well-heeled customers and indicators of potential fraud. High ticket value orders, orders for in-demand luxury items, shopping online while outside their home country, and shipping orders to second homes, hotels, or far-flung gift recipients can all look like fraud tactics and result in declines if the retailer isn’t using a hybrid approach that combines machine learning and expert secondary review.

Embrace a hybrid fraud prevention approach. Instead of relying on a completely automated fraud screening program, use AI and machine learning to assess your orders for fraud risk and then refer risky orders for expert analysis. This combination of algorithmic power and human expertise can reduce your fraud rate while approving good orders, even if they’re for something like a luxury handbag placed by a well-to-do customer who’s ordering while on vacation in another country. A hybrid strategy also reduces your risk of declining new and infrequent online shoppers whose sparse purchase histories may also raise fraud flags.

Improving CX for all your online shoppers

Making these changes can upgrade your site’s experience for the customers who shop online the most, helping you build stronger, longer-lasting relationships with them. The changes can also make shopping on your site better for all your customers by making their experience more secure, more convenient, and more likely to result in a successful purchase, so you can grow those relationships, too, and get the most value from your CX investments.

Original article at: https://customerthink.com/your-cx-might-be-driving-away-big-spenders-heres-what-to-do-about-it/