The ROI of investing in the customer experience for home improvement retailers

The ROI of investing in the customer experience for home improvement retailers

The ROI of investing in the customer experience for home improvement retailers

As a home improvement retail brand, investing in the customer experience (CX) can pay off in terms of increased customer satisfaction and loyalty. According to Deloitte, a positive customer experience encounter can increase customer spending by up to 140% and reduce your cost to serve customers by up to 33%.

Here are 5 reasons why investing in CX can provide a strong return on investment (ROI) for home improvement professionals and leaders:

1. Drive business growth

Home improvement retailers are facing challenges in driving business growth during a recession, as sales of existing homes have stalled, new builds remain low, and house prices are slowly declining in most markets. Happy customers are more likely to return for future business, recommend your brand to others, and provide positive reviews online. These actions can increase customer acquisition and retention, leading to business growth and higher ROI for your CX efforts.

2. Improve customer loyalty

According to Gapard, 40% of buyers have a new hobby related to DIY home improvement. It’s crucial to capitalize on this trend by providing relevant products and services. Customers with a positive CX are more likely to be loyal to your brand—leading to long-term customer relationships, which can be more profitable than constantly acquiring new customers.

3. Differentiate from competitors

Many brands may offer similar products and services in your market. You can establish a personal connection with your customers to differentiate yourself from your competition by talking with them about their specific needs. By focusing on CX, you can set yourself apart from the competition and create a unique brand experience for your customers.

4. Demonstrate cost savings

Today’s customers expect a connected journey with personalization and in-person browsing experiences that are as efficient as online shopping. Providing a positive bond between customers and your brand can lead to fewer customer complaints and support requests, saving your company time and resources.

5. Create sustaining value

Customers with a positive CX are more likely to make additional purchases and have a higher lifetime value. You need a holistic, 360-degree view of your customers that goes beyond surveys and looks at other data sources as well. This includes location-tracking data, social listening, and predictive analytics which can establish trust and build strong relationships with your customers.

By doing so, the overall value of each customer interaction with your brand can increase, leading to increased profitability. A higher customer lifetime value means a higher ROI and increased CX investment in the future.

Calculating CX program ROI

To demonstrate the return on investment (ROI) of a customer experience (CX) program, you will need to measure the impact of the program on key performance indicators (KPIs) that are linked to your business goals.

For example, if your CX program costs $50,000 and results in a 10% reduction in customer churn, and the average customer lifetime value is $1,000, the ROI of the program would be calculated as follows: ($1,000 x 10%) – $50,000 / $50,000 = 20% return on investment.

On the other hand, many factors can contribute to a poor customer experience at a home improvement retailer and can impact your ROI. Pay close attention to these factors and address any issues to provide the best possible experience for your customers.

Factors impacting home improvement CX

Here are a few possibilities:

Insufficient product selection

If a home improvement retailer does not offer a diverse range of high-quality products, it may be difficult for customers to find what they need, potentially leading to a negative experience and loss of earnings.

Inexperienced staff

If the staff are not knowledgeable about the home improvement products they sell, it can create difficulties for customers who have questions or require assistance.

Unprofessional staff

The attitude and demeanour of staff can significantly impact the shopping experience for customers. If staff are unfriendly or unhelpful, it can negatively affect the overall experience. Customers are looking to staff in-store to create a stress-free and enjoyable experience.

Poor store layout

An inefficient or confusing layout can make it challenging for customers to locate the products they need and navigate the store.

Lack of online presence

In the current digital age, retailers must have a robust online presence. Online shoppers are looking for an easy-to-follow layout and design with high-quality pictures and detailed product information.

Evolving your CX strategy

Home improvement retailers face various challenges that can impact their brand. Retailers need to be aware of these challenges and take steps to address them to remain competitive and successful.

Investing in CX can provide a strong return on investment for home improvement professionals and leaders. It can drive business growth, improve customer loyalty, differentiate your company from competitors, lead to cost savings, and increase customer lifetime value.

It’s important to remember that your industry is constantly changing, and retailers must remain agile and adaptable to stay ahead of the curve. To learn how SMG can help you create stronger experiences for your customers and see real-time business outcomes, please reach out.