Whether it is AliExpress, eBay, Souk or Amazon, the online marketplace has revolutionized speed and convenience in e-commerce – it has also revolutionized customer expectations.
In the online marketplace model volume is key but this in itself is a double-edged sword. Without an automated system, the pace created by millions of transactions makes it near-impossible for online retailers to identify individual or emerging pain points to craft the perfect customer journey.
In the spring of 2021, luxury fashion marketplace Farfetch embarked on a project to better understand when it was – and was not – achieving perfection.
Speaking ahead of his session at CX Network Live: Customer Data, Insights and Analytics, Farfetch’s global senior head of VOC, Arthur Zhuravsky, says: “Every organization has its own parameters and internal operational KPIs so management can decide if it is performing well or not, but that is only the internal view.
“We created a set of parameters that took this information and translated into a single number that could tell us how close our internal execution is to perfection, from the customer perspective – since then we have been able to judge every single order’s perfection without having to ask the customer,” he adds.
Improving VOC
Like most businesses, Farfetch collected information that was painting a picture about why customers made contact, but a problem existed with the resolution of that picture. The human error rate was high, and employees had to categorize the individual snippets of feedback that could be used to map customer friction.
The manual processes and lack of uniformity in the feedback cycle added further challenges, as did the fact that only 20 percent of customers were sharing their thoughts.
In the spring of 2021, Farfetch was working with a third party to transform anecdotes into data and precisely mine the reasons for customer contact, also adding an emotional layer of data. The goal was to assess the potential to improve self-service and reduce the need for customers to contact agents.
“We clearly had this dependency between customer emotion, customer contact volume and order execution, so we had to map it better using statistical analysis to understand how customers were impacted overall by execution,” Zhuravsky says.
Exploring this opportunity, Farfetch attempted to connect its CX initiatives to financial outcomes and, therefore, understand the ROI, which prompted the VOC team to explore new solutions.
The Customer Experience Index
In autumn 2021, Farfetch unveiled the Customer Experience Index (CXI), a metric for building an intelligent, scalable approach to CX that aligns with the needs of the company’s C-suite. It allows Farfetch to identify friction in the customer journey, and its causes, in real time.
“Even before the customer notices any friction in their experience and journey, we know if an order is progressing well or not,” Zhuravsky says.
“Understanding how customers are impacted by execution is my team’s literal passion. We sit inside the service excellent department, that is the closest to Operations, and we observe a lot about how orders really perform,” he continues.
Adding this level of sophistication to VOC analytics gives Farfetch the ability to drill down into executions to assess their impact; dive into customer trends by geography; and assess the performance of marketplace participants, right the way down to the individual brands they sell.
Crucially, Farfetch can now act on these insights to refine the customer experience and journey in real time.
“It has massive potential – even here at Farfetch we are yet to realize the full potential of this method,” Zhuravsky says. “It is about moving the focus to operational execution and there are many teams [in other businesses] that are yet to explore their impact on CX performance right now,” he continues.
In addition to assessing how customers are enjoying Farfetch, the company is able to apply similar learnings to the performance of its marketplace sellers. This encompasses whether orders are being processed quickly enough, if items arrive on time and most importantly, how failures in these areas impact customer churn.
“We can see the churn rate change when a seller turned an order around within two days and when it takes three,” Zhuravsky says.
These data and insights are shared with stakeholders as necessary, allowing them to refine their own execution and give their own suppliers actionable feedback. Farfetch can also track how a stakeholder performed over the last month, how much income was lost due to churn and how much was lost to returns.
Zhuravsky says: “We have a roadmap for the development of CXI and I hope we will be able to advance the product this year.”
Zhuravsky will talk in detail about the Customer Experience Index during CX Network Live: Customer Data, Insights and Analytics, taking place on 13-15 September, 2022. To attend this travel-free event, register here.