The Ultimate Guide to Revolutionize Your Customer Experience

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SubbaKrishna Rao

March 2, 2020

Customer Experience is not just one event, but the combination of interactions that provide value each time, says Monique, Customer Experience Manager @SureTraxxCMS

The most frequent question that haunts even the savviest executive must be What do my customers want?

Customer-centric organizations have started to realize that ‘how they deliver’ is as important as ‘what they deliver.’ Companies are learning more about the customers, and are integrating the learning into delivering better customer experiences.

Econsultancy and Adobe performed their Annual Digital Trends report. As per this report, companies that were interviewed have ranked Customer experience (CX) as the single most exciting opportunity that they see in 2020. Customer experience stood on top beating content marketing, video marketing, and social media marketing!!

Further into this post, we discuss in detail about:

What is Customer Experience?

Why is Customer Experience Important?

10 Reasons Why Customer Experience Is Important to Your Business

Great Customer Experience Examples

5 Ways to Create a Customer Experience Strategy

Artificial Intelligence (AI) to Measure Customer Experience

- Understand customer experience data
- Actionable CX metrics

Now let's start by understanding what is customer experience.

What is Customer Experience?

Customer Experience Definition

Forbes defines customer experience as the “cumulative impact of multiple touch points” during a customer’s interaction with an organization.

Customer experience is an outcome of an interaction between a customer and an organization across the customer life cycle. It is the total of all their buying “experiences.” It covers all aspects of their relationship, including the shopping and buying process, as well as ongoing interactions. Customer experience can be a result of navigating your company website, interaction with customer service executives, and even the way customers receive your product/service.

Why Customer Experience is Important?

Customer experience is important for customer retention, building customer loyalty, developing competitive advantage, and a host of other benefits.

Most of businesses toss away what happens to a person once they become a customer. This is because business feels that now they are “done” with that person. The fact is that a current customer can be your most valuable asset if you know how to treat them right.

Data indicates that 73% of companies with above-average customer experience perform better financially as compared to their competitors.

Here are 10 Reasons Why Customer Experience Is Important to Your Business

1. Great Customer Experience Builds Great Reputation

77% of customers have shared positive brand experiences with others.

Imagine when a customer experiences exceptional service, the customer will be happy with your brand. Therefore, the customer will go about sharing a happy experience with friends and family.

90% of people are more likely to trust and buy from a brand recommended by a friend. People trust when it comes from known people, and are more likely to buy.

No wonder, word-of-mouth is the most valuable source of marketing. You can convert your customers into your best and, in fact, the cheapest form of word-of-mouth advertising – but this is only when you deliver an exceptional customer experience

2. Customer Experience Improves Customer Retention

Do you know why customer service is important in customer retention? That’s because 75% of people would return to a company with excellent service.

Acquiring a new customer can cost five times more than retaining an existing customer. 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%.

Exceptional customer service creates customer happiness. On the other hand, great customer service prevents customers from shifting to competitors. A brand’s unique product or service can help to reel them in, but customer service keeps them.

3. Exceptional Customer Experience Boosts Revenues

Bain & Co reports that “Companies with superior Customer experience grew revenue 5 times faster on average than their competitors with inferior customer experience.”

Customer service holds the golden key to a successful business. In addition to a great product or service that will increase sales, your customer service also plays a crucial role.

Jon V. Ferrara is an American entrepreneur, and the founder of Nimble LLC, says, “Improve customer service, increase sales.”

Better customer service = improved bottom line.

In fact, a survey of subscription-based businesses showed the importance of customer service. It came out very explicitly that clients who had a poor customer experience with a business showed only a 43% chance of renewing their subscription. Nevertheless, members who were happy with their experience were likely to remain members for the next 6 years! This indeed is great proof that great customer experience brings great sales!

4. Excellent Customer Experience Drives Customer Lifetime Value (CLV)

The simplest CLV definition is – Profit a company can make of one customer over time. The longer a brand can keep a customer, the greater is the CLV. To grow the CLV, your customers should shop more frequently. Your customers should spend more money on your business.

But what is the trick to making customers buy more and spend more?

Highly engaged customers buy 90% more frequently, spend 60% more per transaction, and have 3 times the annual value compared to other customers. Customers who had the best past experiences spent 140% more compared to those who had the poorest past experience.

Delightful customer experience makes your customers happier and thereby results in more purchases.

5. Customer Experience Develops Competitive Advantage

High quality of customer service is a key method by which a business can differentiate itself from other businesses. A customer decides to keep coming back to you or to move to your competitor based on customer experience.

According to research, – “57% of customers have switched to a competitor to get a better experience.”

Hence great customer experience is key to your business success. To remain competitive, now and in the future, businesses need to start laying down a foundation for providing an exceptional customer experience.

Based on a research report, 67% of churn in customers is preventable. When the problems of the customer are solved during their first interaction, they become happy. Besides, if you provide excellent customer service, you will retain your customers. Furthermore, you will acquire your competitors’ customers, as well.

6. Customer Experience Establishes Greater Brand Awareness

In today’s business environment, one cannot succeed just by creating good products and services. Great customer experience is the need of the hour.

“A brand is no longer what we tell the consumer it is — it is what consumers tell each other it is.”- Scott David Cook, Director of eBay and Procter & Gamble.

If people don’t know your existence, they can’t purchase your product or service. Brand awareness births as soon as a consumer remembers your brand from previous interaction with the brand. It could be seeing your logo or company name or hearing from some current customers. With great customer experience, you build brand awareness.

No wonder even the research statistics show that 73% of consumers love a brand because of helpful customer service.

7. Great Customer Experience Brings About Reduction in Marketing Costs

Whether you like it or not, let’s face it. Irrespective of whether you’re a well-established company or just a startup, marketing expenses can be pretty high.

On average, most businesses spend around 7-8% of gross revenue on marketing and as high as 20% in a competitive niche.

The best way to appeal to your customers is by knowing them better. Understanding what they want and connecting with them on an emotional level can lead to offering great customer service. Great customer experience triggers sharing experiences. Nielsen reports that 92% of consumers believe suggestions from friends and family more than advertising.

“75% of people don’t believe adverts, yet 90% trust suggestions from family and friends.”

Furthermore, with this deep understanding of your customers, you can focus on your marketing efforts by designing effective marketing campaigns. This reduces your overall marketing expenses.

8. Customer Experience Builds Brand Loyalty

Customer loyalty occurs when a customer comes back to purchase your product irrespective of the situational factors around your brand. Psychological studies proved that brand loyalty is intrinsic to the behavior of the human mind. Brand loyalty stays with the customers due to the great customer experience that accumulates using various products.

A study reveals that 52% of consumers continue to use a brand even after finding a cheaper deal elsewhere. Such is the strength of great customer experience.

Consumers are demanding more with every interaction with your product. Brand loyalty needs to be built by offering the next level of customer experience. With the help of these, customers will keep coming back, thereby creating strong brand loyalty.

9. Customer Experience Creates a Point of Differentiation

Excellent customer experience is identified as a major differentiation in a highly competitive marketplace.

A Walker study found that by the end of 2020, customer experience will overtake price and product as the key brand differentiation.

Customer experience is racing ahead and has fast become a top priority for almost all businesses in 2020.

Two companies are offering a similar product. How will customers choose one of them? When friends and family have recommended one of the two, it can swing their opinion. The decision is most likely backed by a good customer experience. Companies that offer an outstanding customer experience create an environment where there are plenty of customer advocates. This will lead to customer satisfaction going full circle. Customers do not just promote your brand, but they run back for repurchase. Great customer experience helps you to keep a pulse on your current customers, as well as acts as a point of differentiation for new buyers.

10. Customer Experience Adds Value to Your Products and Services

A product or service with great quality is only half of attracting customers to your business. So, how can you ensure that they will choose to do business with you over the hundreds of other offers with similar or with lesser prices?

You can make a great deal of difference to products and services by adding many levels of customer service based upon the amount willing to spend, buying frequency, or influence of the customer.

Most people are indeed happily willing to pay more for the same product or service only when it comes to a great customer experience. Good customer service can justify a higher price tag on your product or service.

85% of consumers are ready to pay 25% more for a better customer experience, says a research study

Great Customer Experience Examples

What is a good customer experience?

“The company that can simplify the process of achieving the aspirations that its customers are seeking will disrupt its industry & the market- says Tony Bodoh, Customer Experience Strategist.

Here are 3 great real-life examples of companies that have offered excellent customer experience:

The Ultimate Guide to Revolutionize Your Customer Experience

Clootrack