Business professionals were surveyed by a research report and asked what the top business priority is for the next 5 years – and the answer came out on top. Can you guess what the top priority for a business is? M If you guessed ‘customer experience’ (or CX), you guessed right.
It’s no surprise that customer experience is so high.
Research by American Express found that 86% of customers are willing to pay more for a better experience.
Companies that successfully implement a customer experience strategy achieve higher customer satisfaction rates, reduced customer churn, and increased revenues. Surprisingly, less than half of all organizations will be investing in the customer experience next year.
What is customer experience?
The customer experience (also known as CX) is defined by the interactions and experiences your customer has with your business throughout the entire customer journey, from first contact to becoming a happy and loyal customer.
CX is an integral part of Customer Relationship Management (CRM) and the reason why it’s important is that a customer who has a positive experience with a business is more likely to become a repeat and loyal customer.
In fact, a global CX study by Oracle found that 74% of senior executives believe that customer experience impacts the willingness of a customer to be a loyal advocate. If you want your customers to stay loyal, you have to invest in their experience! Happy customers remain loyal.
It makes sense, right?
The happier you are with a brand, the longer you stay with them. So, if you treat your customers poorly or ignore their customer service emails, then they are more likely to stop doing business with you. This is why companies that deliver a superior customer experience outperform their competitors – and this means they’ll be spending more with your business (and less in theirs!).
For example, here are a few statistics that caught our eye:
- Customer experience is set to be the number one brand differentiator in recent years
- 1 in 3 customers will leave a brand they love after just one bad experience,
- Customers are willing to pay a price premium of up to 13% (and as high as 18%) for luxury and indulgence services, simply by receiving a great customer experience,
- 49% of buyers have made impulse purchases after receiving a more personalized customer experience.
- Customers who rate companies with a high customer experience score (i.e. 10/10) spend 140% more and remain loyal for up to 6 years.
So, it’s extremely important that you focus on the experience you deliver to your customers.
In most cases, a customer’s first point of contact with a company is usually by interacting with an employee (either by visiting a store or by speaking on the phone). This gives your business an opportunity to deliver great customer service. However, customer service is only one aspect of the entire customer experience. For example, if you book a vacation on the phone and the person you are speaking with is friendly and helpful, that’s good customer service. Yet, if your tickets arrive early and the hotel upgrades your room, then that’s a great customer experience!
Like most things in today’s marketplace, customer experience has changed – it’s more than person-to-person service, and thanks to technology, companies can connect with their customers in new and exciting ways.
For example, using CRM software, you can view customer purchase history and to predict future needs even before the customer knows they need it. Having the ability to predict a future need will let you be proactive and attentive and, it means you can do things like;
- Provide related products based on purchase history
- Create and deliver targeted email marketing campaigns
- Understand the 360-degree view of the customer
Customer service is still as important as ever, but it’s no longer the sole focus of the customer experience. Now, the customer experience brings new ways to strengthen customer relationships through technological breakthroughs.
The challenge here is that even though it’s a high priority, most companies are failing to deliver a good customer experience.
Customer expectations are rising, faster than the speed that companies can improve their customer experience. Customers expect every interaction, end-to-end, to be the best experience they have with any company – not just yours!
Impact of bad customer experiences
If a great customer experience is focused on ensuring all interactions and touchpoints with your business is easy, enjoyable, and seamless, then the exact opposite is true when it comes to a bad customer experience.
More than $62 billion is lost each year to bad customer service. Meanwhile, another study found that 91% of unhappy customers leave a brand without complaining. It doesn’t get any better. Only 10% of consumers say brands meet expectations for a good experience.
Some of the most common causes of bad customer experiences involve:
- Difficult purchasing processes
- Negative experiences with customer support
- Compromising a customer’s personal security
- Waiting too long on hold
- Ignoring customer feedback
So, the question remains, how can your organization create a great customer experience strategy?
7 ways to improve the customer experience
Let’s take a look at seven ways to create a great customer experience strategy to help you improve customer satisfaction, reduce churn and increase revenues – including examples.
- Create a clear customer experience vision
The first step in your customer experience strategy is to have a clear customer-focused vision that you can communicate with your organization. The easiest way to define this vision is to create a set of statements that act as guiding principles.
Once these principles are in place, they will drive the behavior of your organization. Every member of your team should know these principles by heart and they should be embedded into all areas of training and development.
Often companies lack the required foresight and skills to develop a customer experience vision. In such a case, our company Ace Research with a hands-on experience profile can create a practical, target-oriented, and sustainable CX vision.
- Understand who your customers are
The next step in building upon these customer experience principles is to bring to life the different types of customers who deal with your customer support teams. If your organization is going to really understand customer needs and wants, then they need to be able to connect and empathize with the situations that your customers face.
Ace Research also possesses vast experience in customer profiling. With numerous projects successfully completed, our team of experts acquired sufficient knowledge to develop responsive and outcome-based profiles of existing and prospective customers.
- Create an emotional connection with your customers
You’ve heard the phrase “it’s not what you say; it’s how you say it”?
Well, the best customer experiences are achieved when a member of your team creates an emotional connection with a customer.
When a customer was late in returning a pair of shoes due to her mother passing away. When Zappos found out what happened, they took care of the return shipping and had a courier pick up the shoes without cost. But, Zappos didn’t stop there. The next day, the customer arrived home to a bouquet of flowers with a note from the Zappos Customer Success team who sent their condolences.
Research by the Journal of Consumer Research has found that more than 50% of an experience is based on an emotion as emotions shape the attitudes that drive decisions.
Customers become loyal because they are emotionally attached and they remember how they feel when they use a product or service. A business that optimizes for an emotional connection outperforms competitors by 85% in sales growth.
How you handle your customers and make them feel, at every step of their journey, has a huge impact on if and when they buy, how long they stay, if they go – and if they turn into raving fans.”
A positive experience for customers means a lot, as studies prove time and again:
- 64% of consumers are more likely to recommend a brand to others if it offers simpler experiences and communications.
- 71% of people recommend a product or service because they received a “great experience”.
- 65% of all consumers find a positive experience with a brand to be more influential than great advertising
- Capture customer feedback in real-time
How can you tell if you are delivering a WOW customer experience?
You need to ask – And ideally, you do this by capturing feedback in real-time. Use live chat tools to have real-time conversations and when done, send a follow-up email to every customer using post-interaction surveys and similar customer experience tools.
- Use a quality framework for the development of your team
By following the steps above, you now know what customers think about the quality of your service compared to the customer experience principles you have defined. The next step is to identify the training needs for each individual member of your customer support team.
Many organizations assess the quality of phone and email communication, however, a quality framework takes this assessment one step further by scheduling and tracking your team’s development through coaching, eLearning, and group training.
- Act upon regular employee feedback
Most organizations have an annual survey process where they capture the overall feedback of your team; how engaged they are and the business’s ability to deliver an exceptional service.
- Measure the ROI from delivering a great customer experience
And finally, how do you know if all this investment in your teams, process, and technology are working and paying off?
The answer is in the business results. Measuring customer experience is one of the biggest challenges faced by organizations, which is why many companies use the “Net Promoter Score” or NPS, which collects valuable information by asking a single straightforward question:
“How likely are you to recommend us?”
NPS, which was created by Rob Markey and Fred Reichheld at Bain and Company, is a highly suitable benchmark for a customer experience metric because a lot of companies use it as the standard customer experience measurement.
And the fact that it’s simple to implement and measure makes the NPS a favorite with company boards and executive committees.
We’ve used NPS at Ace Research for several years now.
- It shows our customers that we care. We use the feedback to open up a dialogue and build relationships with our customers.
- NPS helps us understand common issues among our customer base so we can quickly solve them.
- We invite customers who participate in NPS to collaborate with us on projects, such as webinars, our ambassador program and to act as referrals for new customers.
The real value in NPS lies in having conversations with customers.
