We questioned 1,920 business people to find out what their top business priority for the next five years is, and the same response came out on top once again. Can you predict what a company’s main priority is?
You guessed correctly if you said “customer experience” (or CX).
According to a study conducted by American Express, 86% of customers are willing to pay extra for a better experience.
While the Temkin Group recently published a research that revealed that companies earning $1 billion per year may expect to earn an additional $700 million in three years if they invest in customer experience. That’s a revenue gain of 70% in just 36 months!
Simply said, businesses that successfully deploy a customer experience strategy see improved customer happiness, lower churn, and increased revenue.
Isn’t this a win-win situation?
Surprisingly, less than half of all businesses will spend on customer experience in the coming year. In fact, according to our own study, only 44% of companies plan to raise their CX spending.
Are you ready to boost your investment while also improving the client experience? Let’s get this party started.
What is Customer Experience (CX)?
The contacts and experiences your consumer has with your business along the whole customer journey, from initial contact to becoming a happy and loyal customer, are defined by customer experience (also known as CX).
Customer Experience (CX) is an important component of Client Relationship Management (CRM) since a customer who has a great experience with a company is more likely to become a repeat and loyal customer.
According to a global CX research conducted by Oracle, 74 percent of top executives believe that customer experience influences a customer’s inclination to be a loyal advocate. You must invest in your consumers’ experience if you want them to remain loyal.
Simply stated, loyal consumers are those who are happy. Doesn’t it make sense?
The longer you stick with a brand, the happier you are with it. Customers are more likely to discontinue doing business with you if you treat them badly or neglect their customer support communications. This is why firms who provide an exceptional customer experience beat their competition, which means they’ll spend more money with your company (and less with theirs!).
Here are a few numbers that drew our attention:
- In 2020, customer experience is expected to be the most important brand differentiator (and beyond)
- Customers are prepared to pay a price premium of up to 13% (and as high as 18%) for luxury and indulgence services merely because they have a fantastic customer experience, and 49% of purchasers have made impulse purchases after receiving a more personalised customer experience.
- Customers that give a company a high customer experience rating (i.e. 10/10) spend 140 percent more and stay loyal for up to six years.
Is Customer Experience = Customer Service?
The answer is NO. Why? Let’s figure out.
In most cases, interacting with an employee is a customer’s first point of contact with a company (either by visiting a store or by speaking on the phone). This allows your company to provide excellent customer service. Customer service, on the other hand, is merely one facet of the overall customer experience.
Good customer service, for example, is when you call to plan a trip and the person you speak with is nice and helpful. However, if your tickets arrive early and your hotel room is upgraded, that’s a fantastic customer experience! That is the distinction between the two!
- Provide related products based on previous purchases.
- Create and send email marketing campaigns with a specific audience in mind.
- Recognize the customer’s perspective from all angles.
Customer service is still crucial, but it isn’t the only focus of the customer experience any longer. Through technological advancements, the customer experience now delivers new ways to build client interactions.
What is the Importance of Customer Experience?
Companies are focusing on how to gain new business and, perhaps more crucially, how to keep existing clients because a business cannot exist without its customers.
According to a Bloomberg Businessweek survey, “delivering a fantastic customer experience” has risen to the top of the priority list. According to a recent Customer Management IQ survey, 75% of customer experience management executives and leaders ranked customer experience as a “5” on a scale of one to five (5 being of the highest importance).
The problem is that, despite the fact that it is a top priority, most businesses fail to provide a positive customer experience.
When Bain & Company asked companies to rank their customer service quality, 80% said they were providing a superior experience. In comparison, only 8% of customers say they are getting a good customer service experience.
So, how many companies actually provide an exceptional client experience?
Surprisingly, there aren’t many.In truth, only around half of all businesses provide a satisfactory (or great) client experience. Customer expectations are increasing at a quicker rate than firms’ ability to improve their customer experience. Customers demand every engagement with any firm – not just yours – to be the best experience they’ve ever had.
Impact of Bad Customer Experience
If a great customer experience focuses on making all interactions and touchpoints with your company simple, engaging, and smooth, then a bad customer experience is the polar opposite. Each year, inadequate customer service costs more than $62 billion. Meanwhile, according to another study, 91% of dissatisfied customers quit a brand without complaining.
It’s not going to get any better. Only 10% of customers believe brands meet their expectations for a positive experience.The following are some of the most common causes of poor customer service:
- Procurement procedures that are difficult to understand
- Negative customer service experiences
- Putting a customer’s personal safety at risk
- Waiting on hold for too long
- Ignoring input from customers
The Bottomline
It is evident that customer experience is an integral part to drive the success of your business. This is where market research will play a key role in giving your business the proper direction and boosting revenue by generating happy customers. It’s critical to consider the complete client journey while building an excellent customer experience. According to McKinsey research, customer journeys are much more strongly connected with business outcomes than touchpoints.
This necessitates a thorough grasp of customers’ end-to-end experiences and how interactions are received at each stage. This is where Maction can help you nail the target and achieve your long term business goals through powerful market research.
