Jeff Bezos, CEO of Amazon says, “If you do build a great experience, customers tell each other about that. Word of mouth is very powerful”. Customer Experience drives over two-thirds of customer loyalty, outperforming brand and price combined, according to CX leaders.
Customer Experience or CX is the internal and subjective response customers have to any direct or indirect contact with a company.
CX encompasses every aspect of a company’s offering—firstly the quality of customer care, of course, but also advertising, packaging, product and service features, ease of use, and reliability. The best marketing money can’t buy is a customer who will promote your business, because they’ll refer their friends and family to you, free of charge.
“For many companies, the absence of negative feedback is a sign of satisfaction but, as the research shows, this might not be the case.”
Yet, very few of the people responsible for those things have given sustained thought to how their separate decisions shape the customer experience. For many companies, the absence of negative feedback is a sign of satisfaction but, as the research shows, this might not be the case. Your customers may not be happy, or worse, they’re sharing their bad experiences with others. Customer expectations are at an all-time high and it’s a tough time for companies to meet and exceed them. Even if you provide a positive customer experience 9 out of 10 times, that one time you do not could be fatal.
CEOs may not actively deny the significance of customer experience or, for that matter, the tools used to collect, quantify, and analyze it, but many don’t adequately appreciate what those tools can reveal.
As competition heats up and economic uncertainty is a given, one thing is for sure – Customer loyalty can help drive the success of a business, and the customer experience drives loyalty.
“According to 2020 CX Index Survey, prior to COVID-19, just over half (54%) of consumers reported having a better experience shopping online; however, after facing nearly 3 months of COVID-19, 76% of consumers moved to online shopping for items they would typically buy in-store.”
Investing in good CX is important for any company, no matter how big or small. After all, your success depends on your ability to keep and attract loyal customers. And failing to put your customers first can send them straight to your competitor, along with their business. While products cost a certain amount, great customer experiences are priceless — for both customers and businesses. In fact, studies show that companies providing excellent customer experience enjoy five times more revenue growth compared to companies delivering poor customer experience.
According to 2020 CX Index Survey, prior to COVID-19, just over half (54%) of consumers reported having a better experience shopping online; however, after facing nearly 3 months of COVID-19, 76% of consumers moved to online shopping for items they would typically buy in-store. What’s more, 57% of those consumers plan to continue buying online after the pandemic ends, signalling a potential for permanent change in consumer shopping behaviours.
The last three months have challenged consumers and brands like never before, and we are all faced with understanding a new reality: how do we shift from adapting to the crisis to driving a successful strategy in this future world.
A Walker Study found that by the end of 2020, customer experience will overtake price and product as the key brand differentiator.
Forrester’s report “Customer Experience Drives Revenue Growth” showed that customer experience leaders achieved compound average revenue growth of 17% over five years. The CX laggards achieved just 3% growth during the same period.
While many successful companies have come a long way in delivering great customer experiences, here are the 3 key reasons why any business, invariant of size and revenue, needs to care about customer experience:
- Higher conversions and better campaign ROI
According to American Express, more than half of customers abandon a purchase due to bad service, which is a result of poor customer experience planning and execution. Orchestrated and managed experiences lead to an improved buying experience throughout the journey
- Increased revenue from existing customers
Measuring customer retention and customer satisfaction are considered the most effective CX metrics for about two-thirds (65%) of marketing professionals. Customer lifetime value is also an effective metric. The most innovative, future-looking companies are investing in truly understanding customers via customer data platforms and real-time decision engines.
- Increased customer recommendations
Here is a thumb rule that most of us can relate to as consumers (because we have all done it): when we like something, we tell people about it. When we don’t like it, we tell even more people about it.
This fact is the basis for Net Promoter Score (NPS) measurement, which is a customer survey asking people on their likelihood of recommending brands based on their experience.
KPIs for ROI in CX :
- Revenue Growth
- Customer Retention
- Cross-selling and Upselling
- Expense control
- Map Customer Journeys
- How much does an unhappy customer cost?
Many companies do not have the CX or loyalty data on hand to make a case for themselves right off the bat. In that case, showing the opportunity for financial return with 3rd-party statistics like the ones below can help stakeholders see the potential of a CX program:
- Increasing customer retention rates by 5% increase in profits anywhere from 25% to 95%.
- 86% of consumers are willing to pay more for better customer experience.
- It costs 6 times more to attract a new customer than it does to keep an old one.
- The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%
The stats that reference a CX metric (e.g. NPS) present a unique case for a CX program in itself — how do you know if your customers are loyal without a CX program in place that measures sentiment?
The only way to understand and quantify how customers feel about your business is to ask.
Survey2Connect is a global award-winning customer experience management (CXM) solution that offers 3 core suites designed to help businesses seamlessly improve customer experience, employee experience, and market research. Survey2Connect is an agile CX solution that constantly learns and improves with every experience to give its clients best-in-class experiences through the successful deployment and delivery of 5,703 surveys, 68,804 tickets, 1,743,203 responses, and 756 dashboards.