Customer experience can no longer be considered just a buzzword or a marketing activity. The customer’s today are highly connected, have high expectations and are prone to switch loyalties. Providing them with the experience they expect will be a major differentiator in modern businesses.
The phrase Customer Experience (CX) has been tossed around so much over the last few years. You literally would have to be living in a cave to not hear about it.
However, there is very little information on the quantitative aspect of this discussion. What is the business impact of a good or a bad customer experience? What factors have a clear impact on customer experience?
Temkin Group’s 2017 research on Customer Experience data is quite insightful. There is also an infographic (reproduced at the end) that highlights the key takeaways.
Investing in a new strategy will always require an assessment of ROI. If as an organisation, you are trying to figure out how to recover your investment in customer experience strategies, here is a quick summary of the report which will explain just that.
The Bad, The Worst and The Ugly
If your business delivers a bad customer experience, your customer can reduce their spending with you. Or they can walk away from you. You should feel lucky if they do just that.
The worst thing that can happen to your business is your customer telling others how bad their experience was. According to the research, after a bad experience, 50% of customers tell their friends about it.
That’s massive. Imagine the exponential impact one bad experience can have on your business. Not only the business goes away, but you also risk your future business with them.
On the contrary,
A good customer experience means more sales. Obvious, isn’t it. The report finds that non-customer who has a good experience is 3.5x times more likely to buy from you than someone who has a bad experience. A report by Mckinsey says that, on an aggregate, organisations providing positive customer experiences can see an uptick in revenue by 10-15%.
Now, the numbers can vary based on a lot of factors. However, while you intuitively knew that positive customer experience is directly correlated to higher revenues, there is a bank of data to validate that now.
But Everyone is Investing in CX. How do I differentiate myself?
That’s a completely valid question. 55% of companies want to be in the top three of their industries using CX programs.
Now, if everyone does the same thing, then how can you stand out. The answer, to some extent, lies in the report as well.
While everyone intends to implement CX programs, there are two specific things that can be done by you
- Taking action: One of the first steps in understanding customers is doing surveys. It is probably the easiest thing to do. However, what is lacking is taking action on those inputs. As many as 63% of the organisations report not taking any concrete action from those surveys.
- Prioritising: If you are able to incorporate CX behaviour in the culture of your organisation, you will be better than 68% of the large organisations who are not able to do that.
So, to conclude, if done correctly customer experience is a great tool to gain a competitive advantage. The trick is to do it correctly and consistently.