With organizations large and small launching initiatives to improve the customer experience, you might wonder, “Why does it matter?” We could offer theories, but let’s start with hard data.
- 81 percent of companies view customer experience as a competitive differentiator (Dimension Data).
- Companies that lead in customer experience outperform competitors by nearly 80 percent (Forrester).
- Just 38 percent of organizations scored a rating of “good” or “excellent” for customer experience in 2018 (Temkin Group).
- About half of customers will abandon a brand and seek out a competitor after one bad experience. That number jumps to 80 percent after multiple bad experiences (Zendesk).
What Is Customer Experience?
Customer experience is the perception of your brand based on all customer interactions at various touchpoints across the customer journey. This is different from customer service, which is comprised of one interaction or a series of interactions centered on resolving a customer issue. Rather than focusing on the success or failure of a single interaction, customer experience optimizes the entire journey – discovery, website visits, social media engagement, phone calls, purchases, customer service, repeat purchases, etc.
Why Is Customer Experience Important?
Just as customers will leave a brand after a bad experience, loyalty and affinity grow with every positive experience. Not only do you reduce customer churn, but you also inspire customers to become advocates for your brand. In fact, an Oracle study found that three-quarters of senior executives believe customer experience determines whether someone will become a loyal advocate for the brand.
Loyalty, affinity and positive word of mouth lead to increased sales and profitability. According to research from American Express, 86 percent of customers will pay more for a better customer experience.
How to Develop a Customer Experience Strategy
Exceptional customer experiences don’t just happen on their own. You need a strategy.
The first and most obvious step is to make sure you understand your customers. What problems can you solve for them? What are their interests and preferences? What influences their purchase decisions? Create detailed buyer personas and cater to your specific target market.
Once you have a deeper understanding of your customer, identify and map all interactions in an all-encompassing customer journey. What motivates and influences customers at each stage? What obstacles prevent them from moving from one stage to the next? How can you build a stronger relationship during each interaction?
As you develop processes that support your customer experience strategy, create consistency across all areas and interactions. Customers see your organization as a single entity, not many different departments, individuals and technological platforms. All people, processes and technology must be fully integrated and working together seamlessly to make your customer experience strategy successful.
Gartner estimates that more than half of organizations will redirect their investments towards customer experience improvements in the future. That means more than half of your competitors will increase their focus on customer experience. Will you?