Customer experience – what’s it really worth?

Improving the customer experience can have huge impact on revenue, customer retention and creating customer loyalty. Industry research firms have taken a close look at the statistical relationship between how consumers rate customer experience and their willingness to buy more, switch to a competitor or recommend the company to a friend or colleague. So, the better job your organization does at proving a great (effortless) customer experience, the more your customers are going to buy from you.
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How customer experience can increase revenue and improve customer retention

One of my favorite subjects to read, write and talk about is customer loyalty. It’s one of the most coveted attributes for a business, yet it is so often misunderstood. As we’ve talked about before, many organizations strive to “delight” their customers. However, the problem is that does not automatically translate to customer loyalty.

The truth? Delighted customers are not inherently loyal. As it turns out, customer loyalty comes down to providing an effortless customer experience. In other words, when an organization is trying to drive customer loyalty, the customer experience should be the biggest focus. So what is customer experience and, by default, customer loyalty worth?

Industry research firms have taken a close look at the statistical relationship between how consumers rate customer experience and their willingness to buy more, switch to a competitor or recommend the company to a friend or colleague. So, the better job your organization does at proving a great (effortless) customer experience, the more your customers are going to buy from you – and be less likely to buy from competitors. At the same time, these customers are very likely to become evangelists for your products and services. It seems like common sense, right?

Improving the customer experience can have huge impact on revenue, customer retention and creating customer loyalty. And, we’ve seen this firsthand with the companies we work with to create more engaging, seamless customer experiences. This happens in a few key ways. The first one is through the impact of incremental purchases. Customer experience improvements can greatly benefit organizations that have a large number of subscribers or customers. An effortless customer experience makes it easier for a customer to select an upgrade on a flight, consolidate loans with one financial services provider or switch to a wireless carrier’s family plan, as examples.

This can also happen through reducing churn. It is widely known that it costs more to acquire new customers than to retain existing ones. A great customer experience reduces churn, which drives higher revenues and reduces costs.

The third way customer experience can impact revenue is through the power of evangelists. I think we’ve all heard the adage, “Your customers are your best sales people,” or at least some variation of it. Surprisingly, or perhaps not to some of you, this often contributes the least revenue impact. Maybe that motto is a bit overplayed? Or perhaps this further proves that existing customers are an untapped resource that organizations should focus on first?

Businesses across every industry can see a dramatic revenue impact by simply focusing on the customer experience. Of course the challenge is to balance costs with the ability to deliver exceptional service. The good news is that businesses no longer have to choose between lower costs or better service.

Technology that leverages intelligent self-service solutions like conversational IVR and virtual assistants has evolved to keep pace with rising consumer expectations. These solutions are not only cost-effective, but can deliver more intelligent, anticipatory and personalized service that simply isn’t possible without them.

My advice for 2015? Don’t think of customer service as a cost center. Instead, invest in technology, tools and business practices that focus on delivering an effortless customer experience.

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Konstantin Khitrik

About Konstantin Khitrik

This was a contributed post by Konstantin Khitrik. To see more content like this, visit the Customer experience section of our blog.