Why are you paying for a bad customer experience?
Most marketers would find it crazy to pay to promote products with a high return rate, but this is precisely what many paid search programs do. If you’re basing marketing campaigns on gross sales and ignoring product returns, you’re allocating dollars to the wrong areas. In fact, you may be actively allocating marketing dollars toward transactions that provide a bad customer experience. Analyzing returns data can provide valuable P&L benefits to retailers and their suppliers, and help you provide a better customer experience. Here are four ways to do it.
- Improve Product Merchandising
Look for products, categories and sub-categories that are showing high return rates. Pause campaigns for those products immediately, then research the cause and take the appropriate response. For instance, we ran a campaign for one of our clients that resulted in very strong sales of a particular product. We were delighted--until we discovered that this product had a nearly 100 percent return rate. We investigated and found that the product description on the retailer’s website did not match what they were shipping. The advertising cost for this product was wasted and the retailer incurred unnecessary costs in the form of freight, restocking fees, and of course lost customer satisfaction.
- Provide Feedback to Manufacturers
You sometimes need to involve the product’s manufacturer to resolve a high return rate. We recently saw a retailer that had a consumer electronics product with a high return rate. We looked into the product’s ratings and reviews data and found that customers seemed to believe the product was defective. But was it? Sure, there might be a manufacturing defect or design flaw. But it also might be a customer training issue; perhaps the user’s manual incorrectly described how to set up the product. Or perhaps the manufacturer-supplied product description inaccurately described the product’s capabilities.
- Allocate Marketing More Efficiently
Knowing which products have high return rates allows merchandisers and marketers to make more informed marketing allocation decisions. Running campaigns for products with high return rates represents wasted ad spend. But don’t compound these mistakes by, for instance, dedicating valuable website real estate or e-newsletter space to promoting these products, or offering promotions on them.
- Provide a Better Customer Experience
No customer enjoys the returns process. And once they go through it, they might never purchase from that retailer again. Focus your marketing programs on providing the best customer experience. Put differently, don’t pay for people to have a bad experience. So make sure your website accurately describes the product you’re selling, and consider replacing products that have inherent problems.Returns are a messy, expensive problem for retailers that have short-term costs and long-term consequences in the form of lost customers. Integrating returns data into paid search is one way to make sure you’re allocating your marketing dollars towards providing the best customer experience.
We will delve deeper into this topic in a future white paper. Subscribe below to be alerted when it is available.