Why focus on the customer experience as a business priority? The most successful companies understand that achieving high customer lifetime value is the result of consistently delivering excellent customer service and customer experience (CX).
Superior Customer Experience Leads to More Customers
Companies who have a superior CX have an increased growth in customers (The Economist Intelligence Unit, 2016). And, this goes for revenue too. In fact, 17% is the average price premium that consumers say they’re willing to pay in return for a great customer experience (American Express Customer Service Barometer, December 2017).
Forrester reports that overall CX leaders grow revenue faster (17%) than so-called “laggards” (3%) (Customer Experience Drives Revenue Growth, Forrester, 2016).
They state that “customers who have a better experience with a company say they’re less likely to stop doing business with the company and more likely to recommend it. Both of those factors should drive increased growth in customers and, in turn, increased growth of customer revenue” (Customer Experience Drives Revenue Growth, Forrester, 2016).
Higher spend correlates with a better customer experience
Not only is CX linked to revenue growth, but customers who had a good experience also tend to spend more over time. A study found that those who had the best past customer experiences with companies spend 140% more compared to those who had the poorest past experience. This was clear after controlling for other factors that drive repeat purchases in the transaction-based business, for example, how often the customer needs the type of goods and services that the company sells (Harvard Business Review, The Value of Customer Experience, Quantified, 2014).
The 2 Keys to Improving CX
Leaders in customer-focused businesses tend to master these two things:
1) Identifying and understanding their customer’s journey
2) Defining what is important to their customers
When you understand your customer’s journey from end to end (as opposed to looking at isolated customer touch points), your business can ensure the best impact on customer satisfaction and revenue performance.
Knowing where to focus your efforts invariably comes down to knowing what is important to your customers. Until you conduct real-time customer feedback analysis, your assumptions of customer priorities may prove fruitless.
What aspects of the customer’s journey matter most?
When it comes to defining what is important to your customers, how do you decide which aspects the customer journey are most important, which also generate the most value?
Through big data and advanced analytics, you can understand what customers say about the factors they like about your products and services and also the actual customer behavior that creates economic value. In addition, using tools to understand and examine the voice of the customer (VOC), through online surveys, in-depth interviews, social media listening, and focus groups, will highlight how well you’re in actual fact managing your journeys.
Once you’ve identified the most important journeys and defined their strengths and weaknesses, you can start the process of improving and redesigning the CX.
8 Questions to Start Your Customer Experience Journey
Each business is unique and it will often take an assessment of where you are today and where you’re planning to be and what your specific goals are before you can determine the next best steps. Ask yourself the following questions to determine whether you’re on the right track.
- What’s your main long-term business objective (2/5/10 years)?
- What’s the one thing you’d need to do to make your business run faster and more efficiently?
- What’s the one thing you’d need to do to make your business run more profitably?
- What do you find your customers are most frustrated about?
- What do they love about you?
- What is the one thing your customers need more than anything (quicker or better service, improved product, more user-friendly website)?
- How could you better anticipate those customer needs?
- How good is your customer data — does it actually help you get actionable insights and guide your strategy?
If you’re unsure of the answer to any of these questions, it’s an indication that your customer experience may be affected as well. The best place to start your CX road to success is often to understand what your customers are saying about you, what they’d change, what they like and what you can improve upon. Consider this: “It can take 30+ years to build a brand and just a handful of poor customer experiences to destroy it” (INC, 2016).
If you don’t know your customer needs, it’s high time to start collecting and analyzing your customer feedback. At Thematic, we can help you to do just that.