Why are people ready to stand days in line to purchase a new iPhone or pay $3 for a cup of coffee at Starbucks? It’s not really about a technology or a taste; it’s about a lifestyle.
How did Apple and Starbucks become in vogue? Probably the answer lies in the exceptional experience they provide to their customers. What is this exceptional experience? And how can you benefit from providing an exceptional experience? Let’s find out.
What will you find in this article ?
1. What is customer experience?
Customer experience (CX) is all about how the customer feels when using your product or service.
“At the end of the day people won’t remember what you said or did, they will remember how you made them feel.” ‒ Maya Angelou, American poet, memoirist, and civil rights activist
CX encompasses every interaction between a customer and a company throughout the business relationship ‒ from awareness to advocacy – whether customers are just scrolling a website, reading an ad, communicating with a seller in a shop, making a purchase, or leaving a complaint.
The customer experience hinges on the balance between your actions and your customers’ expectations. A great experience is one that exceeds the customer’s expectations, and conversely a poor experience is one that doesn’t meet them. As Forrester says, a great experience can be described as:
- Useful ‒ it addresses the customer’s needs and delivers value
- Usable ‒ it provides value in a way that is easy for the customer to access
- Enjoyable ‒ it’s pleasant, engages customers, and encourages them to stay loyal
Generally, CX includes three big parts: brand touchpoints, the customer journey, and an ecosystem. Let’s take a look at each of them.
1.1. Brand touchpoints
A brand touchpoint is a person, place, thing, or situation that facilitate contact between a customer and a business or its products or services – both physically and virtually. For Nike, brand touchpoints include its sneakers, running app, stores, Twitter and Facebook pages, and slogan (“Just do it!”).
1.2. Customer journey
The customer journey is the story of the customer’s experience ‒ from initial contact to post purchase. Usually, the customer journey consists of five stages:
- Loyalty expansion
- Nancy decides she wants almond candies.
- Nancy searches for a candy shop.
- Nancy finds Candy Heaven and compares its candy to that offered by other online stores.
- Nancy decides to buy candy from Candy Heaven, enters her credit card data, and pays.
- Nancy receives the candies, tastes them, and likes them.
- Nancy writes to customer support to ask about possible discounts on candies.
- Nancy buys more candy.
- Nancy tells her relatives and friends about Candy Heaven.
- Nancy visits the CandyHeaven blog and reads an interesting article about how fine chocolates may prolong life and shares this article on social media.
Your task as an entrepreneur is to delight Nancy at each of these stages to retain her and make her an advocate of your brand. A delighted Nancy brings more Nancys to your business.
By ecosystem, we mean a complex system of people, products, interfaces, services, technologies, and spaces that provide new possibilities for customer journeys and experiences. Ecosystems are customer-driven, as customers are the ones who decide what resources and activities they need.
Now that you know what the customer experience is, it’s time to explore its benefits.
2. Why should you focus on delivering a great customer experience?
According to Kolsky’s research, 84 percent of companies are already leveraging the CX model.
What’s more, a delightful CX has become the number one priority for many companies: 76 percent of customer management executives and leaders note that CX is of the highest importance.
Why is CX so important for your business? Because a great customer experience improves client satisfaction, which produces a bunch of benefits.
2.1. Increased revenue
It’s a customer-centered era. Customers set the rules and they’re no longer satisfied with mere promises – they demand good experiences. Indeed, 55 percent of customers are ready to pay more for a guaranteed enjoyable experience (see Kolsky’s research cited above).
So it’s no surprise that CX leaders achieve 14 percent more revenue growth than CX laggards.
For instance, one of the CX leaders, Google, has increased its revenue by over $200 billion since 2006.
2.2. Lower service costs
By listening to your customers, you can easily identify gaps and delays in your service, avoid repeat interactions and speed up digital migration. This gives you an opportunity to save from 15 to 2o percent on your service costs according to McKinsey & Company.
2.3. Decreased customer churn
A bad experience is one of the major incentives for a customer to leave your brand. Why stay with a brand if you’re disappointed with the service you get? In fact, 67 percent of customers name poor experiences as a reason for churn.
Furthermore, you can’t only rely on existing feedback and blindly believe that everything is good with your product: a mere 1 person out of 26 actually lodges a complaint; others just leave. Your true enemy is indifference.
This is why providing a good customer experience is crucial to your company’s viability. DUFL, a startup that’s trying to ease business travel, reduced customer churn and achieved 99.9 percent retention by focusing on a customized experience and exceptional support for their customers.
“Delivering an amazing customer experience is our mantra.” – Bill Rinehart, CEO and founder of DUFL
PJ, a chain of retail coffeehouses, started to lose clients due to Starbucks’ growing popularity. However, PJ overcame this problem once the company realized that their customers wanted unique experiences tailored to them and in response provided unique decor to every store.
2.4. Enhanced customer loyalty
As much as 74 percent of senior executives say that satisfying CX is the number one contributor to a customer’s loyalty.
With a personalized customer experience, you can better engage your customers, win their trust, and develop rapport. Overall, a satisfying CX helps to strengthen customer loyalty and establish a long-lasting relationship.
Using this strategy, Apple has collected an army of dedicated followers, 92 percent of whom never look back and are ready to buy new products that Apple releases.With a personalized customer experience, you can better engage your customers, win their trust, and develop rapport. Overall, a satisfying CX helps to strengthen customer loyalty and establish a long-lasting relationship.
Using this strategy, Apple has collected an army of dedicated followers, 92 percent of whom never look back and are ready to buy new products that Apple releases.
[Image source: Statista]Another market leader, Netflix, owes its 75 million subscribers to its customized experience. Netflix’s recommendation engine connects customers with movies and TV shows they’ll love.
2.5. Customer referrals
Even today, 88 percent of users still make choices based on recommendations from their friends or neighbors. Here’s where great CX acts like a magic wand.
Obviously, satisfied clients will talk about your brand to their family, friends, and coworkers, or leave favorable feedback on your page or write a lovely post on their social media accounts about your product they’ve fallen in love with. Indeed, 72 percent of customers will share a positive experience with six or more people.
The more referrals you get, the more potential clients you attract. Knowing this, Zappos invests in a customer experience that users want to tell friends and colleagues about. This has helped the company collect 24+ million customer accounts.
“Too many companies think of their call centers as an expense to minimize. We believe that it’s a huge untapped opportunity for most companies, not only because it can result in word-of-mouth marketing, but because of its potential to increase the lifetime value of the customer.” – Tony Hsieh, Zappos CEO
The benefits of a great customer experience are obvious. So it’s time to reconsider your marketing strategy and think of the CX you provide. Are you delivering a genuinely satisfying experience? Make your business customer-first instead of revenue-first and you’ll never regret it.
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