Retail in Asia


Southeast Asia digital businesses must prioritise customer retention

The recent growth of digital adoption in Southeast Asia has been phenomenal, with 100 million out of the region’s 460 million internet users coming online in the past three years alone. This has fuelled the exponential growth of verticals such as fintech and e-commerce, giving rise to more than 30 homegrown billion-dollar unicorn startups.

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However, the pace of growth has slowed down of late with inflationary pressures a recurring theme across the region, amid fears of a recession.  In fact, Google’s e-Conomy SEA report 2022 reports that digital adoption grew 4 percent from 2021 to 2022, compared to a 10 percent increase the year before. The same report noted that e-commerce is nearing full adoption among digital users in urban Southeast Asia.

After years of aggressive user acquisition – characterised by heavily discounted services and attractive sign-up incentives – SEA’s digital businesses must now switch their attention to keeping the mass of users they have onboarded.

Customer retention strategies can be complicated, especially for digital-first companies that have prioritised customer acquisition and growth through digital platforms. Yet amid these trying times, there are steps that brands can take to build customer loyalty and ensure their satisfaction.

Prioritise empathy by embracing personalisation

The pandemic has taught business leaders many things, the most important lesson being the critical role of empathy, agility, and creativity in surviving and thriving in today’s digital marketplace. This isn’t just about moving quickly—it’s also about understanding how customers feel and adapting to their prevailing sentiments or appetite to deliver what they need when they need it.

Indeed, customer journeys have become more complex, and personalisation has become a business imperative. In fact, Twilio’s State of Personalisation report found that 62 percent of consumers in Asia Pacific will lose loyalty to a brand if their experience is not personalised, with 80 percent of business leaders reporting that consumers spend more when their experience is personalised.

Users choose to interact with brands on their preferred channels, switching between a wide range of platforms and expecting uninterrupted access. To better serve their customers, brands will now have to track customer journeys across all these channels, whether for sales, answering queries, or resolving issues.

The challenge now for organisations is to achieve personalisation at scale without compromising the quality of customer experience. AI-powered voice assistants, for instance, can take personalisation to the next level by analysing a caller’s emotions based on their tone, volume, and choice of words, and adjust its responses accordingly.

It is no surprise that for this reason, nearly half (47 percent) of businesses in the region are looking into adopting voice AI in the year ahead to manage high volumes of customer requests while ensuring their services are seamless and intuitive, according to a separate study commissioned by AI Rudder.

Spend less on promo codes and more on solutions that engage the customer

It’s no secret that customers who repeatedly purchase from your brand are more valuable than one-time buyers and that keeping existing customers happy is more cost-effective than attracting new ones. In addition, customers are more likely to give their repeat business to brands that understand and anticipate their needs and provide them with a seamless experience.

Brands must understand their customers’ pain points and develop solutions to alleviate those gaps. Customers are the best resource for finding out how to improve your products or services. The key is to establish a customer feedback loop; that is, having a system for gathering and analysing their feedback and using it to inform the user experience across the various functions of your business.

However, when brands are dealing with scores of customer concerns at a time, it can be difficult to provide a personalised experience to each individual. The reality is that brands with thousands of customers are often having to rely on a relatively small group of contact centre agents.

Automation technologies can help to improve customer engagement without losing the human touch. AI technologies, for example, allow brands to make as many as hundreds of thousands of calls simultaneously; and are able to classify, and transfer calls to live agents. Live agents can then focus only on handling complex calls, increasing call capacity and customer happiness. Customer-facing tech solutions can proactively reach customers to check in on their satisfaction, address any issues or concerns, and offer personalised promotions or incentives to encourage repeat business with minimal wait time.

Be diligent in identifying areas for automation, and invest significantly in these areas

Increased customer expectations and demands mean that customer service teams are now more stretched than ever. Staffing limitations have been reported to remain a fundamental threat to brands seeking to improve their customer experience; nine out of 10 retail employees in Singapore agree that there is a talent shortage. Thus, the pressure is now on organisations to ensure service standards are up to par, all while managing their bottom line and protecting employee welfare.

In this landscape, brands must rethink their workflows and assess which components have the potential for automation. For instance, high volumes of repetitive frequently asked questions can be automated, reducing the customer service team’s workload while ensuring prompt and reliable support. By automating routine tasks and systematic improvements to business operations, staff can focus on personally assisting customers.

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Customer retention is crucial for brands to sustain their success beyond the region’s digital adoption boom. By providing personalised and seamless experiences, proactively addressing pain points, and embracing automation to improve processes and address staffing limitations, brands can pave the way to better customer experiences, which translates to greater customer satisfaction and loyalty. Overall, brands that prioritise customer retention will be well-positioned to achieve sustainable growth and success in the long term.

This article is authored by Kevin Wu, Co-Founder and Managing Director, AI Rudder