The phrase ‘customer is king’ could not be more accurate in this scenario. It is true, that all the power resides in the hands of the customers. These customers are the ones that select your brand over your competitors and bring success to your business. Therefore customer experience is essential in retaining customers and attracting new ones. According to Bain & Company, businesses that shine at customer experience can grow revenues of up to 4%-8% above their market. Bain & Company also notes that companies that prioritize customer experience earn the loyalty of customers, turning them into promoters with an LTV 6 to 14 times that of detractors.
Products and services prove no longer to be competitive differentiators for companies and businesses. Sure having a great product is great but that is not enough anymore. The attention has drifted and shifted towards the overall experience brands attempt to curate and deliver for their customers across their customer journey. Brands often find it challenging to improve customer experiences in spite of the current trends as customers expect effortless, timely and personalized experiences across any and all touchpoints and channels.
Why should CX be a priority for businesses, you ask?
Superoffice.com conducted a survey that involved asking 1,920 business professionals what their top business priority is for the next five years and 45.9% of them responded by saying ‘customer experience’ or CX. It shouldn’t be surprising that CX got so highly voted. Research by Microsoft proves that 61% of consumers have stopped interacting or doing business with a particular company or brand due to substandard customer experience.
Reduced customer churn, higher returns, and greater customer satisfaction are signs that reflect in companies that have managed to implement successful customer experience strategies. Furthermore American Express discovered that 86% of customers are willing to pay more for superior experiences.
Significance of CX
CX or Customer Experience is an essential component of Customer Relationship Management and is defined by the encounters, experiences and interactions that a customer has with your brand from the first moment of contact, throughout his/her journey as a customer. One of the primary reasons why customer experience is so integral is attributed to the fact that a customer with positive experiences is more likely to become a faithful customer. In a nutshell: Exceptional customer experiences equal happy customers which further equates to repetitive purchases along with loyalty towards the brand.
The pressure to deliver excellent customer experiences is now more than ever. With the rise of digital communication, customers expect faster responses and personalised and transparent interactions accompanied by the ability to reach the brand at all hours through their preferred channels of communication. According to the UKICS or UK Institute of Customer Service, great customer service not only positively impacts the CX or customer experience but also directly correlates with the bottom line of the brand.
According to a recent survey conducted by Customer Management IQ, 75% of CX leaders and decision-makers rated customer experience a maximum of 5 on a range of 1-5; highlighting the importance of CX in working, moving business model. Simply put, customer experience strengthens customer relationships through breakthrough digital interactions. The challenge is that although it is considered a high priority, most companies fail to deliver exceptional customer experiences.
Businesses cannot exist without their customers which is why companies are focusing on new ways to win existing customers and retain them for as long as possible. The primary component of a ‘customer-first strategy is customer experience management as it clearly demonstrates an investment in the demands, needs and expectations of the customer. With customers prioritising experience above all else while choosing their preferred brands; it becomes a duty for organisations to amp up their CX game. After all, when it ultimately comes down to closing the customer gap, the crucial difference lies in the expectations that customers have and how companies cater to fulfil these expectations and meet them.
Here are a few CX-related statistics that caught our attention:
- According to Forbes, 83% of executives feel that unimproved customer experience presents with it risks in revenue and market shares.
- According to Gartner, 86% of professionals engaged in CX expect to compete based on customer experience alone.
- According to Forbes, 74% of customers are somewhat likely to make purchases based solely on customer experiences.
- According to BCG, 40% of customers are likely to spend more than they had anticipated especially when their CX is highly personalized to suit their needs.
- According to PwC, 32% of customers stop doing business with a brand they love after a single negative experience.
- According to Wunderman Thompson, 42% of customers responded saying that a seamless experience across all channels and devices is a top priority and a leading expectation.
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