Today’s digitally empowered customers have both high expectations and the ability to interact with brands when — and how — they want. They spend the majority of their money on companies that make them feel valued or catered to. As a result, if a brand wants to be successful, the customer experience has to be at the heart of their marketing strategy.
When customers come to a brand, they’ve already defined their expectations of both the nature of the interaction they want, and what they require in order to be satisfied. This puts tremendous pressure on the brand to understand what those expectations are and to deliver on them.
Numerous studies and surveys detailing the impact of customer experience have been released in the past decade. Findings demonstrate that consistently delivering a positive experience can increase brand loyalty, reduce churn, and give companies an advantage over competition.
Let’s explore further.
Social Media’s Impact on CX
- Today’s internet consumers want their online questions to be addressed promptly; 42% expect a response within one hour. (Ohio University)
- Failure to respond via social channels can lead to a 15% increase in the churn rate. (Gartner)
- When companies engage and respond to customer service requests over social media, those customers spend 20% to 40% more money with the company than other customers do. (Bain & Company)
- Customers who encounter positive social customer care experiences are nearly 3 times more likely to recommend a brand. (NM Incite via HBR)
- Companies with a social care program experience a 7.5% YoY increase in customer retention – those without only see a change of 2.9%. (Aberdeen)
- 60% of organizations still cite marketing (not customer experience) as the main function of social channels. (Genesys Research via the Professional Planning Forum)
The determining factors shaping the interactions consumers have with businesses are multiplying in our exceedingly connected world. Every single engagement makes a lasting impression, either strengthening or weakening the customer’s loyalty toward a brand.
While most businesses recognize the impact of service on customer experience, many have failed to establish an experience management process — meaning employees are left in the dark when communicating with customers. If exceptional social care isn’t the brand standard, a company’s bottom line is bound to suffer.
The true key to success is to define social care guidelines to be put in place and establish expectations for those responsible for interacting with customers. Today’s consumers expect brands to offer engaging and personal experiences that foster relationships and loyalty.
Word of Mouth
- 95% of dissatisfied customers tell others about their bad experience (Dimensional Research)
- 74% of consumers identify word-of-mouth as a key influencer in their purchasing decision. (Ogilvy, Google and TNS)
- 88% of people trust online reviews written by other consumers as much as they trust recommendations from personal contacts. (Bright Local)
- High satisfaction rates result in 2-12 times higher recommendation ratings. (Market Force)
- One happy customer can equal as many as 9 referrals. (American Express)
The 21st century consumer is in-the-know. They are deliberate with their money, spending hours combing multiple sources before making a purchase. Their research is thorough; they compare products, analyze comments and reviews, and survey friends on social media. Once they decide to buy, they evaluate their experience with a brand — weighing whether or not it met or exceeded their expectations.
A good experience with a brand is often shared on social media and review sites. They get likes and comments, and companies may even gain new customers in their wake. Bad reviews can be the stuff of nightmares — going viral in a matter of hours. The truth is, one never knows how much reach a customer might have. A few thousand followers on social media see a complaint, they share it with their followers, who share it with their followers, and the process repeats until a company is facing a full-blown PR crisis. The digital age has put customer experience front and center.
The Future of Customer Experience
- In 2016, 89% of companies expect to compete mostly on the basis of customer experience, versus 36% in 2010. (Gartner)
- By 2017, 50% of consumer product investments will be redirected to customer experience innovations. (Gartner)
- By 2020, customer experience will overtake price and product as the key brand differentiator. (Walker Information)
As illustrated in the previous two sections, the landscape of customer care has changed quite dramatically from what it was a decade ago. Customer behavior is strikingly different, leading the focus on customer experience to become increasingly multi-dimensional. This hyper-focused attention on customer experience shows that organizations are starting to put their customers at the core of what they do. As more brands optimize their processes and business functions around the customer, we’ll see customer experience really shine.
The Bottom Line
- 76% of consumers say they view customer service as the true test of how much a company values them. (Aspect)
- 60% of consumers have higher expectations for customer service now than they did just one year ago. (Parature)
- 74% of consumers have spent more due to good customer service (Ebiquity)
- 67% of consumers cite bad experiences as reason for churn. (Esteban Kolsky)
- $41 billion is lost by U.S. companies alone each year due to poor customer service. (NewVoiceMedia)
- Loyal customers are 5x as likely to repurchase, 5x as likely to forgive, 7x as likely to try a new offering, and 4x as likely to refer. (Temkin Group)
As the importance of the customer experience has grown, so has its impact on companies’ bottom-lines. The customer’s perception of their experience with a brand is the key differentiator between competitors — companies can no longer rely on product and price alone.
Customer experience is the sum of every interaction that a customer has with a brand, both offline and online. It’s the key to winning customers and keeping them for the long-term. It is the single most important factor for business success.
As Gerry McGovern said, “The customer isn’t king anymore; the customer is dictator.”
Which CX statistics speak most to you? Let us know in the comments below!