Retail Executive

JAN-FEB 2018

Retail Executive is the trusted advisor to top retail executives from the industry’s most profitable retailers. We help retail executives succeed in their job role and grow their business via exclusive, actionable, peer-driven content.

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Page 37 of 43

Building Authentic, Long-Term Customer Relationships Why interpersonal relationships are critical for a superior customer experience. D O R A B O C K Assistant Professor of Marketing, Auburn University's Harbert College of Business WHY IS GRATITUDE IMPORTANT, AND HOW DOES IT WORK? Grateful feelings are linked with a desire to recipro- cate, consequently leading to favorable, firm outcomes. Customers who feel grateful want to do something to return the favor. Interpersonal relationships are built upon reciprocity, and that is exactly what gratitude ini- tiates — employees help customers in some way that elicits customer gratitude, and customers then want to do something in return to help the employee. As a result of these reciprocation cycles, customer gratitude is as- sociated with increased customer loyalty and willing- ness to share positive word-of-mouth about a company and its employees, share of wallet, and sales revenue. For decades, the focus has been on customer satisfaction and more general affective states, such as happiness. Cer- tainly satisfaction continues to be important and tends to be correlated with gratitude. However, growing evidence is showing the subtleties of gratitude are meaningful in re- tail and service interactions, making these feelings equally important, if not more important, than satisfaction. HOW DO EMOTIONS DRIVE CUSTOMER DECISIONS? Emotions provide information to customers, who use their emotions to make decisions. If a purchase does not feel right, customers are not going to buy. Emotions of- ten produce biased decisions; therefore — when experi- encing positive emotions — customers are likely to make positive evaluations of a retailer and its employees. The ability for emotions to influence judgments is heightened when the feelings are linked to the object being judged. Consequently, if a customer perceives an employee's behavior as beneficial, in turn creating customer gratitude, the grateful customer is likely to make positive judgments of the employee's or organi- zation's character. INTENTIONS MATTER FOR SUCCESS IN THE MARKETPLACE One of the key factors driving customer gratitude is ith headlines frequently mentioning the "retail apocalypse," some tradi- tional brick-and-mortar retailers are panicking. But despite these disturb- ing and attention-grabbing headlines, traditional re- tailing certainly is not dead. While online shopping is indeed growing, the majority of retail sales are still in stores, which should signal to retailers that the in-store customer experience is now more important than ever. Customers often shop with specific retailers because of their emotional attachment to the brand or because of the emotions they feel when shopping in a store. Grat- itude — one emotion that can be elicited within the customer experience — is critical to building authentic, reciprocal, long-term customer relationships. WHAT IS GRATITUDE, AND HOW IS IT ELICITED IN CUSTOMERS? Within the retail context, customer gratitude occurs when a customer perceives they benefited from an em- ployee's actions. That is, customers feel grateful when they perceive employees intentionally acted to improve the customers' well-being. Research shows customer gratitude can result from employees engaging in extra effort and performing be- haviors beyond their job responsibilities. Employees sharing important information with customers, such as product information, company objectives, or indus- try information, can also elicit gratitude. Relatedly, interpersonal communication within em- ployee-customer interactions is another factor promot- ing customer gratitude. Many customers walk into stores unsure of what they need. Employees who spend time with these customers explaining different products us- ing terminology the customer can understand are setting themselves up for long-term success. The engagement of such employee behavior and sharing of information can send many positive signals to customers, including trans- parency, expertise, and benevolence, with the latter being critical to the generation of gratitude. W LOYALTY Customer Engagement By D. Bock BUILDING AUTHENTIC, LONG-TERM CUSTOMER RELATIONSHIPS RETAILEXECUTIVE.COM JANUARY/FEBRUARY 2018 38

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