Customer Experience

Remember when “the customer is always right” drove how brands and customers interacted? Then, it was all about customer service, meeting their needs in that particular moment. Well, that was before the internet age. What used to be an effortless interaction that had a beginning, middle, and end, say, in a physical store, is now an open-ended relationship that can happen spontaneously anywhere and anytime—in your product, a brick and mortar store, a mobile app, a web portal, or your contact center. The term for this business-customer ongoing dynamic today is customer experience (CX). But, what is customer experience? CX refers to the ongoing relationship between a customer and your company.

Why Is Customer Experience Important?

Customer experience has been getting so much attention recently that empirical evidence amounts that being customer-centric has very real payoffs.

According to a PwC report, customers are willing to pay a premium of up to 16 percent for a good customer experience. Furthermore, Watermark Consulting reports the companies they identify as the Top 10 Customer Experience Leaders in the U.S. outperform the S&P and have three times higher returns than those they identify as CX laggards.

Customer experience shifts the business perspective from a sole focus on profit to focusing on customer needs, wants, and goals. Making that shift lets you align your investments, products, and services accordingly, ensuring that they solve the correct problems and the ones customers are willing to spend money to get solved.

This, in turn, impacts the following two metrics that are critical for any business wanting to maintain a healthy bottom line.

Improving Customer Retention and Decreasing Churn

Customers are armed with readily available information about their options and have the power to switch providers at the click of a button. This means that having satisfied customers is vital if you want to ensure they keep coming back and buying more from you. A lost customer means a loss of revenue and an increased cost in other areas to compensate for that loss. Research shows it costs five times more to attract a new customer than to retain an existing one.

Decreasing Customer Acquisition Cost

Excellent customer experience also has an impact on how effective your company is in acquiring new customers. A happy customer is more likely to become an advocate and refer you to other customers. And in an age where people no longer trust advertisements and 20–50 percent of all purchasing decisions are based on word-of-mouth (McKinsey), customer advocacy is shown to increase marketing effectiveness by as much as 54 percent and significantly decrease your cost of acquiring new customers.

What Makes a Good Customer Experience?

With more than 80% of companies expecting to compete solely based on CX, ensuring your customers have a great experience is critical if you want to keep your competitive edge. The thing with competing based on CX is that you aren’t just designing an experience that is better than others offering similar products and services; you are also building experiences that are judged (even if only subconsciously) with all the other experiences they have in their daily lives and with companies such as Uber, Amazon, and Airbnb. This “circle of influence” is what ultimately shapes their expectations about what “great” really means.

Make It Effortless

Your customers are impatient, and they expect everything to be easy and “right now.”  In fact, Google data shows that searches for “same day shipping” have grown 150% since 2015. So, a great customer experience is all about effortlessness and speed: how easy you make it for customers to do business with you and how quickly you meet their needs or solve their problems.

A great example of effortless done right is Amazon’s 1-click to buy. Amazon took the checkout process, which is the biggest point of friction for customers, and made it just as easy as selecting the item for purchase. As a result, Amazon has been able to massively increase conversions of existing customers and generate billions of dollars of additional revenue. If your goal is to improve customer experience, identify the biggest points of friction in your customer journeys and reduce the effort customers have to expend there.

Make It Consistent

According to Forrester, 95 percent of customers use three or more channels to connect with a company in a single service interaction. This means their experience is shaped, not by their interaction with a single channel, but rather by what McKinsey calls a cluster of interactions that spans multiple channels. And thus, their satisfaction and propensity to buy again from you will be the result of their overall experience across all of them. That is why consistency is so critical.

According to McKinsey, to ensure consistency, you should focus on three main aspects of customer experience:

1. Customer Journey consistency: Ensuring customers have a good experience that spans all the channels they interact with in their individual journeys.
2. Emotional consistency: Ensuring you elicit consistency-driven emotional connections with customers.
3. Communication consistency: Ensuring communications and key messages convey the same values at every interaction point.

Make It Self-Service

Customers expect to have the power to solve product or service problems on their own—and they want to do it instantly. In fact, 50 percent of customers think it’s important to solve product or service issues themselves and 70 percent expect a company’s website to include a self-service application. So, delivering functionality that helps customers help themselves can have a huge impact on their satisfaction. In an analysis by Gartner, web self-service portals emerge as one of the digital CX projects with the highest impact on customer experience and one that more easily shows a positive ROI.