Why Is Customer Experience Important?
Focus effectively on customer experience (CX) and your business will witness significant performance improvement across the top- and bottom-line. This is the key takeaway from a recent report from CX futurist, author and keynote speaker Blake Morgan – and precisely why customer experience is important for businesses in 2021 and beyond.
Citing numerous studies on the impact of good customer experience, Morgan reveals that experience-led businesses are 60% more profitable and bring in 5-7 times more revenue than companies that don’t focus on CX. In all, 84% of companies that work to improve customer experience report an increase in revenues.
“Clearly, when done right, investing in customer experience brings a strong return on investment,” says Morgan, speaking in terms of revenue growth, profit growth and stock price. “Any program that doesn’t contribute to these three areas, especially during the current economic uncertainty, is on the chopping block,” she adds.
But what is customer experience and why does it matter so much to business performance?
What Is Meant by Customer Experience?
Before we go any further, it’s important to understand precisely what is meant by customer experience. In a recent blog post, CX software vendor Lumoa put the question “What is customer experience?” to 15 CX leaders. Here, to our mind, are the three most illuminating and instructive answers:
“Customer Experience has moved from being focused on customer service to the entire experience a customer has with the company. That means every interaction, large or small, and that includes any and every interaction the customer has with the organisation’s employees, the packaging of products, the experience navigating through a website, advertising/marketing messages via traditional and digital, interactions on social media, etc.” – Shep Hyken, CX expert and bestselling author of The Convenience Revolution
“Customer Experience is very simply explained as everything an organisation does to deliver the ‘end-to-end experience’ to a customer. From advertising; to PR and media; to sponsorship; to websites and apps; to physical interactions (stores and branches); to products; to documentation; to employee behaviour; to communication; to customer service, etc.” – Ian Golding, CCXP, CX Consultant and Trainer
“My favourite definition of CX is ‘Customer experience refers to how customers perceive their interactions with your company.’ It not only includes the ‘whats’ (interactions) but also the ‘hows’ (perceptions, feelings) of customer experiences. For CX to even exist, you have to be customer centric. It just doesn’t work otherwise. It surprises me how many product-centric businesses are out there that even with some small mindset shifts can easily migrate to customer-centricity.” – Sue Duris, CX and Digital Marketing Consultant
Universal to all three of these definitions – plus the remaining twelve in the blog post – is that CX is the culmination of everything a company is and does. CX is product. It’s packaging. It’s sales, marketing, service, advertising, social media, employees, storefronts, websites, newsletters, and everything in between.
More than this, customer experience is the overarching impression a brand leaves with its customers. And this impression ultimately determines how customers think and feel about the brand along every step of the customer journey.
And make no mistake about it – customer experience matters. Everyone has had a bad experience with a business at some point. Whether it’s coming up against a rude sales representative in a store, an online service that makes it practically impossible to cancel an account, long wait times, poorly trained service agents – everyone has a story of what happened. More importantly, they can remember how the experience left a lasting impression of feeling devalued, frustrated, angry, upset, or all of the above.
The bottom line is that bad experiences are bad for business. As the Customer Experience Trends Report 2021 reveals, 80% of customers will switch to a competitor after just one bad experience – a trend that holds true across generations around the globe.
(Image Source: cxnetwork.com)
The good news is that the CX difference works both ways. In fact, in the same report it was found that 75% of customers are willing to spend more to buy from companies that give them a good customer experience.
The reason is that the benefits of customer experience are worth paying for. According to the latest edition of the State of the Connected Customer report from Salesforce, 80% of customers place the same emphasis on flawless engagement as they do on product quality. That figure includes 83% of millennials and 85% of business buyers – underscoring the critical nature of CX for B2C and B2B companies alike.
As the report puts it, “Extraordinary experiences help companies earn more than sales – they build relationships. 53% of customers say they feel an emotional connection to the brands they buy from the most.”
(Image Source: salesforce.com)
What Does Good CX Look Like?
In his answer to the Lumoa question, “What is customer experience?”, Shep Hyek (quoted above) goes on to explain why customer experience is so crucial to organisations of all stripes. “In the coming years, organisations, big and small, will recognise that CX is as important as anything else they offer customers,” he says. “Furthermore, customers are not comparing the companies they do business with to direct competitors anymore. They make comparisons to the best service and CX they have ever received from anyone and any company.”
This, indeed, is precisely why customer experience is the new competitive battleground – and why both customers and companies are prioritising CX right now.
(Image source: cxnetwork.com)
And since customers are no longer just comparing like-for-like competitors – and instead comparing experiences across industry verticals – companies in any one industry can (and should) take inspiration from companies in any other.
With this in mind, let’s take a quick look at some best-in-class customer experience examples.
Let’s start with a company that nearly everyone is familiar with and is renowned for setting the CX bar high – Amazon. The ecommerce behemoth prides itself on good customer experience, and knows the value and benefits of customer service. From its great prices to its practically limitless inventory, ease of completing purchases (in a single click if you’re pressed for time and know what you want), super-fast shipping options, and easy, no-questions-asked returns policy – Amazon strives to find solutions to practically every problem a customer may have. And that, ultimately, is why people keep going back.
As former CEO and Amazon Founder Jeff Bezos puts it, “We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.”
In the finance world, Capital One is one brand that knows the value of a great digital customer experience (DCX). Financial visibility and support are of course hugely important to customers – and so Capital One developed Eno.
Eno is an intelligent virtual assistant that keeps customers in the loop about what’s going on in their account, and sends alerts, notifications, and insights when it detects irregularities. For example, Eno notifies customers about suspicious charges and helps customers solve them. It looks out for free trials customers have subscribed to and sends a reminder before they end so they can cancel them if they wish. It reaches out when it spots a bill that’s higher than usual, and even notifies customers if they appear to have left an unusually large tip at a restaurant. It all adds up to a fantastic customer experience that leaves consumers feeling like they are being looked after by a provider they can trust.
(Image source: capitalone.com)
Finally, let’s take a look at Coca-Cola, which provides a fantastic example of how CX is embedded in everything from branding to packaging, marketing, sales, and social media. The company’s Share a Coke campaign was so simple, yet incredibly effective. Starting in Australia, the company began personalising its packaging by printing popular names on cans and labels, so consumers could, for example, “Share a Coke with Emma [or Chris, Josh, Becky, etc.]”. Customers were then encouraged to take pictures of themselves holding the drinks with friends and post them to social media along with the hashtag #ShareACoke.
(Image source: wrike.com)
The campaign was a resounding success. In Australia, sales to teenagers grew 7%, and overall sales 3%. 76,000 shares were generated on social media, Facebook traffic increased by 870%, and 170,000 tweets were made by 160,000 fans enjoying the personalised Coca-Cola customer experience. As the campaign rolled out globally, #ShareACoke became the world’s number one trending topic, and in the US, sales rose 2.5% after a decade of decline.
How Can We Manage Customer Experience?
No customer experience initiative – be it building a customer-centric ecommerce site, an AI-powered personal assistant, or a personalised marketing campaign – happens without careful planning, the right technology investments, and continuous customer experience analysis, monitoring and optimisation.
What we’re talking about here is customer experience management (CEM or CXM). What is customer experience management? Clint Fontanella, Manager of the HubSpot Service Blog, sums it up succinctly: “Customer experience management oversees customer interactions. It plans how a company will initiate or react to engagement at different points in the customer’s journey. The goal of this effort is to increase satisfaction and drive brand loyalty.”
In other words, customer experience management is the collection of processes a company uses to manage customer interactions across all physical and digital touchpoints to deliver personalised experiences that ultimately increase loyalty, and thereby revenue and profits.
The importance of customer experience management cannot be overemphasised, as it’s good CEM practices that keep customers happy before, during, and after a purchase. As Fontanella explains, this is what helps your sales team close deals, and what prevents customers from churning quickly after buying a product. As a result, 94% of marketers agree that engagement and conversion rates are higher when a business invests in CEM.
Companies achieve customer experience management programmes through a combination of software, analytics, research, and data-management systems. It begins by mapping the customer journey, highlighting all the different interactions customers have with the business throughout their lifecycle, and then identifying the key touchpoints where there is opportunity to influence and improve the customer experience. From here, CEM strategies utilise processes and software solutions to comprehensively manage customers’ cross-channel interactions and transactions with the company, as well as its products and services.
(Image source: b2binternational.com)
When done well, CEM programmes deliver precisely what customers want – consistent, personalised experiences across all interactions they have with the company. Unfortunately, however, companies are still falling significantly short of customer expectations. According to the Salesforce report, only 34% of customers say companies treat them as individuals, and 54% say it generally feels like sales, service, and marketing don’t share information.
(Image source: salesforce.com)
How Can Ashine Consultancy Services Help?
The importance of customer experience is simple – in the experience-driven economy, CX can prove to be the make or break of a company. A good CEM programme leads to a customer experience that is consistent across channels, driving value for both the business and its customers.
At Ashine Consultancy Services (ACS), we help you deliver excellent customer experience quickly and efficiently. We achieve this by automating your business processes using the latest technologies, such as Cloud Automation and Robotic Process Automation (RPA). In addition, we create a digital workforce that frees your team to focus on their core responsibilities.
For more information on how you can start building a world-class customer experience programme in your company, read the customer experience book (PDF) from ACS – Guide to Implementing the Best Customer Experience Strategy. To discuss your CX strategy, get in touch with our team of expert consultants today for a free consultation.