Most retailers that sell products online spend a lot of time and money enticing customers before a sale. They put a lot of thought into getting people to visit their website. A great deal of effort is put into helping customers find the products they want. And even more effort is put into finalizing the sale.
But once the sale is completed, much of the effort stops.
That was certainly the case several years ago at Urban Decay, a provider of cosmetics and beauty supplies.
“We met the minimum requirements of our customers to do the job,” says John Perasco, assistant vice president of e-commerce for Urban Decay.
“We sent them a shipment confirmation e-mail with a link to UPS or other delivery service so they could track their order, and we sent them return stickers in the event they wanted to return or exchange merchandise.”
Then Urban Decay realized it was missing a great opportunity to improve customer relations after the sale. After securing package-tracking services from Narvar last year, Urban Decay implemented a branded after-sale campaign. Instead of directing customers to the delivery or postal service where they could track their orders, Urban Decay customers are sent to a company-branded site. There, customers not only learn the status of their orders but are presented with additional marketing information under the Urban Decay logo.
In going with a post-purchase service, Urban Decay hoped to diminish operation costs by reducing the number of “where is my order” requests. And while that certainly happened, Urban Decay was also surprised by another benefit of the program — an increase in additional sales from customers awaiting their original order.
“We found that happy customers make second purchases before they receive their original orders,” Perasco says. “We saw a big increase in orders from customers who clicked through the email we sent.”
Indeed, Urban Decay has found that customers who use the link though emails make additional purchases at a rate of 31 percent higher than the average customer. Additionally, the bounce rate is 25 percent lower than average because these customers find what they want at a higher rate.
And customers who receive after-sale service spend 37 percent more time on the Urban Decay website than average customers.
“Purely by giving customers better service after their purchase, we can bring in additional revenue,” Perasco says.
“We found that happy customers make second purchases before they receive their original orders. We saw a big increase in orders from customers who clicked through the email we sent.”
— John Perasco, Urban Decay
Additional benefits included greater efficiencies and better customer relationships with customers who return or exchange merchandise. That is because customers receive more and better information about return policies and procedures.
The Narvar service is particularly appealing to Urban Decay customers, who are typically regular users of social media and online services. They expect more personalization and sophistication beyond the traditional links to postal services to get information.
Perasco says the company’s conversion to the Narvar system was relatively simple. “What was really great was the light lifting that was needed. We converted last November just before the holidays. We typically do not make any changes just before the holidays. But this was not difficult to implement and really paid off during holiday sales,” he says.
Urban Decay is currently only using the Narvar service for U.S. purchases and has not yet rolled out the service to other countries in which it sells product. However, some other retail chains that Narvar works with are using it for international sales. Urban Decay is one of more than 300 retailers using the system; other major chains include Sephora, Nordstrom, Crate and Barrel and GameStop.
Most retailers using the service are large or mid-market retailers. But all want to improve their communications with customers after a purchase is made.
“Most retailers have not created true engagement with customers after they have made their purchases,” says Amit Sharma, CEO of Narvar. “There is nothing to inspire loyalty and retention as after-sales channels are typically ignored.”
After-sale services include feedback channels and more personalized product return and exchange processes.
The latter is important. “Traditionally, retailers have sent pre-posted labels and not provided a clean method for self-service returns,” Sharma says. “We have a system for returns that is rich and engaging to customers, whether they are using a desktop computer or a mobile device.”
He sees three advantages to after-sale services. The first is a pure customer experience that is rich and engaging. The second is greater operational efficiencies through fewer customer services calls and increased efficiency through return product. Finally, there is a happy customer, through which a retailer can drive more repeat sales.
Although Urban Decay has not tied its program to social media, some retailers that Narvar works with have integrated after-sale services into Facebook so that customers can communicate with retailers though Facebook Messenger about after-sales issues.
“They can get updates on Facebook about where the orders are, as well as information about returns,” Sharma says.
While apparel and cosmetics seem like natural fits for after-sales programs, Sharma says a number of other markets are using the service including home goods, electronics and video game companies. Department stores are also a big user of the service.
“Our customers are typically brand-focused that want to offer a rich, premium service,” he says. “We work with a lot of retailers that represent luxury brands.”
Narvar tries to adapt messages sent by retailers to reflect “the personality and local tone of the different markets,” Sharma says. For retailers that sell globally, messages are adapted to reflect the customers’ currency and language.
Narvar uses a combination of bot technology and human answers so that customers get personalized responses to their questions about order status. “As customers ask more questions, we can build our bot’s vocabulary so that it can answer more specific questions.”
Narvar charges retailers an annual subscription fee for the service based on the complexity required. Factors in determining fee amounts may be based on whether the service is U.S.-only versus worldwide and how many communications channels are involved.
In the end, the key to after-sales communication is service, Sharma says.
“Retailers that are forward-thinking want to engage their customers throughout the lifecycle,” he says. “They should have the same connection with customers when dealing with them online that they give when those customers are in their stores. That might mean sending out thank-you emails after every purchase.”
Lauri Giesen is a Libertyville, Ill.-based business writer with extensive experience in covering payment and finance issues.