Why Great CX = $$
Customer experience sometimes falls into that murky category of business terms without a clear definition or with varying ones. As such, it’s often used without sufficient ties to quantifiable metrics. Companies may set out to “improve customer experience,” but not be able to determine whether they actually have, other than with loose or anecdotal accounts of better customer-facing processes.
However, when carefully examined, there’s a direct relationship between customer experience, customer feedback, and financial performance. And, there are models and measures that can be instituted to track how much you’re profiting from these initiatives.
The Business Value of Customer Experience
To begin, let’s look at the effect of customer experience, purely at a business level.
A winning customer experience has positive benefits on both sides of the profit and loss account. Satisfied customers are more likely to buy more, repeatedly, and to recommend you to other potential customers.
Equally, a good customer experience can help on the costs side of the equation. Retention, advocacy, and cross/up-sell reduce your costs of sale. Advocacy is very low cost, if not free marketing, and with the power of social media, it has a broader reach than ever before. The costs of handling complaints falls as customers are satisfied with the experience you deliver. And finally, if you get the experience right, the costs of servicing fall.
The effect of this is demonstrated in research published by Oracle (Global Insights on Succeeding in the Customer Experience Era, Feb 2013). Almost half of customers asked said they would pay more for a superior customer experience and almost three out of four stopped buying from a company after even a single bad experience. More significantly, most of those went straight to a competitor after abandoning the company that provided poor customer experience.
Bad experiences don’t just harm you, they help your competitors — a double whammy.
- 48% — Always / often pay more for a superior experience
- 70% — Stopped buying after ONE bad experience
- 64% — Went straight to a competitor after a bad experience
There is no doubt that the data points to the value of a superior customer experience, but how do you make it happen in your organization? Get a complete set of steps to enhance your ability to profit from customer experience improvements by downloading this Clicktools whitepaper.