What makes customer experience so important?
According to the Customers 2020 report from Walker, the customer experience is forecast to surpass price and product as the key brand differentiator by the year 2020, and 75 percent of people already expect a consistent experience wherever they engage with brands.
While most CXOs have noticed that customers have come to expect a great customer experience, not many are ahead of the curve. “Executives have been slow to put their customers first. Even though communication behavior has changed so much over the past 10 years, most marketing departments are still set up the same way they have been over the past 50 years. Sure, we’ve added social media and digital teams, but those haven’t been truly integrated into the organization,” says Joe Pulizzi, one of the leaders behind the content marketing movement.
Unless companies start taking the customer experience seriously, they can expect their revenue to decrease significantly because totally satisfied customers contribute 2.6 times as much revenue as somewhat satisfied customers, and 14 times as much revenue as somewhat dissatisfied customers.
What’s more, customers with strong brand attachments are known to deliver 23 percent more profit and revenue than average customers, and returning customers spend approximately 67 percent more than new customers.
When a company creates a good customer experience, it produces far more brand advocates, people who talk favorably about a brand or product and pass on positive word-of-mouth (WOM) messages to other people, than companies that fail to make their customers fall in love with them. Considering that 74 percent of consumers identify word-of-mouth as a key influencer in their purchasing decisions the revenue opportunity that a good customer experience creates is simply too attractive to ignore.
In summary, a good customer experience can:
- Create loyal customers and reinforce brand preference.
- Reduce customer churn since satisfied customers are less likely to leave.
- Produce brand advocates for a company and thus increase word of mouth referrals.
- Boost revenue with positive word of mouth and greater customer satisfaction.