This article originally appeared on LinkedIn.
It’s hard to find an online retailer that beats Amazon’s Net Promoter ScoreSM by 28 points in its category. Coupled with the Covid-19 boom in “pandemic pet” ownership, Chewy is rock-and-rolling over the rest of the online pet retail industry. Revenue is climbing, its stock has more than doubled in the past 12 months, and customers love Chewy far more than the competition. (See the figure for a picture of how Chewy’s NPS® stacks up, according to research by Bain & Company and ROI Rocket.)
Figure 1
It’s one thing to get new customers, something else to keep them. Chewy has focused on building customer loyalty, and it’s paying off. Chewy CFO Mario Marte recently told the Wall Street Journal that while new customers might spend $150 a year, by the time they have been registered on the site for five years or longer, that amount often has risen to $700—or more.
Chewy encourages repeat business with automatic order refills, a category that represents about 70% of its net sales, according to Evercore ISI.
One happy refill user with a big golden retriever named Baxter explained to us how easy it is to modify these monthly subscriptions for food and supplies. Making amendments, like canceling for vacation, is simple, and the company sends her an email reminder shortly before a refill ships, giving her the opportunity to add to it. This approach has benefits beyond good customer service: It combines packaging, saves waste and carbon, and boosts Chewy’s revenue.
Chewy is making sure there’s more and more to add to that monthly order as well. According to CFO Marte, Chewy sells 65,000 different products, from food to toys and crates—about 30% more than it did two years ago. The company offers services, too, including the recently launched Connect With a Vet, which provides initial veterinarian consultations online.
Tapping into the special emotional tie between owner and pet, Chewy sometimes sends flowers or a note after an owner cancels a standing order following a pet’s death. The hand-painted pet portraits the company mails as surprise thank-yous so delight customers that they post them, along with glowing testimonials, across social media, giving Chewy an authentic and powerful endorsement.
The closer Chewy gets to the customer, the better for business. The more information owners enter in their pet profile—things like breed and age—the more precise the offers generated by Chewy’s recommendation engine, Marte told the Journal.
The need for these kinds of innovative ideas is constant in every industry. Yesterday’s wow is today’s yawn. As with many NPS leaders, Chewy’s innovation leans heavily on the near-infinite creative talent of its frontline employees and the input of their customers. In a post on Chewy’s innovation blog, UX researcher Stuart Martinez explains:
“Customers can provide feedback in many ways. Calls to support, app feedback, social media, and product surveys are great sources, as are user interviews and usability testing. Documenting findings, regardless of the form they arrive in, is key to help identify trends, house historical data, and provide our successors with data to know where we’ve been and what we’ve learned. Whatever sources you draw from, the key is to never settle. User goals and expectations are constantly evolving. A single idea, release, or new product can change the way a user shops or give way to a whole new segment. The human experience is not static, so to keep up with our users, the work to understand them must be a constant, ongoing effort.”
I couldn’t agree more. Working hard at being remarkable—at always acting in the customer’s best interest by providing services that really enrich their life, and finding ways to make them affordable—is a winning formula for any company. Customers will gladly pay for such innovations, and they will refer their friends.
Winning on Purpose: The Unbeatable Strategy of Loving Customers
Coming in November, a new book by Fred Reichheld, Maureen Burns, and Darci Darnell all about delighting customers. Available now for preorder.
marzo 23, 2021