What impact does customer experience have on your company’s bottom line?
Modern businesses are focusing on customer experience more than ever before.
With online services and other self-service functions gaining popularity, customer experience has become more automated now than ever before. When trying to appeal to a customer base that expects everything to come instantly at the tap of a touchscreen, crafting the ideal customer experience becomes crucial.
But why does the customer experience have such a dramatic impact on your company’s bottom line?
Great customer experience helps reduce churn
Customer experience is one of the single largest contributors to customer retention, which is one of the ultimate goals of a company. Retention is a breeding ground for profitability.
While novices tend to believe that the backbone of a successful business is the acquisition of new clients and customers, it actually costs five to seven times more to bring in a new buyer than it does to keep your existing clientele.
That’s why it is far more important to hold on to existing customers than it is to bring in new ones. When new customers are welcomed into the fold, they should not be a replacement for those who have left.
There is more value in retention because it helps you to build brand loyalty over time. Loyal customers deliver 23% more profit, and returning customers spend a massive 67% more than new customers, allowing you to create a larger and more sustainable level of profit.
Where does customer experience fit in?
Customer experience is the driving force behind retention. If customers enjoy using your products and interacting with the company, they will continue coming back for more.
A good customer experience eliminates one of the largest forces that drive customers away -frustration.
Frustration is the enemy of retention
When people can’t use a product easily or have a difficult time with self-service functions and interactions with the company, frustration will mount in your customers. Frustration leads to abandonment.
One key source of frustration is having to repeat issues between platforms. This is an issue that frustrates 89% of customers and will drive them away from you. Thankfully, this glaring threat to the customer experience can be easily remedied by adapting an omnichannel approach to customer service, backed by an AI platform.
Consistency is incredibly important when trying to hold on to your existing buyers. A whopping 87% of consumers want companies to work harder on consistency throughout their customer experience.
Optimizing the overall experience actually increases satisfaction by more than 20% among customers. It also increases revenue by 15% and lowers customer service related costs by 20%.
Happy customers become brand ambassadors
The ultimate goal that you should have for all of your customers is to create an army of brand ambassadors.
A brand ambassador is someone who continuously advocates for your service, including sending referrals along, praising you on public forums, giving great reviews on official channels, and talking you up to the people in their lives.
Brand ambassadors are important because consumers inherently trust the recommendations of their friends, family, and peers. The concept is known as social proof, and it is fed by good customer experience.
User social proof can be incredibly effective, and the best way to take full advantage of it is through a positive customer experience and getting customer testimonials from satisfied users. These can be either written out or filmed as a video. A flawless customer experience will make the act of asking for these testimonials much easier.
Get ahead of competition
Another common issue among businesses is the constant threat of competition. This is another area where having a seamless customer experience can help you increase your standing.
Companies that choose not to optimize their customer experience are only allowing competitors to gain a huge advantage in their struggle for supremacy.
Unfortunately, failing in this regard early on can help your competitors create a gap between you and them that you will not be able to overcome.
Take the example of Netflix and Blockbuster Video, for instance. When Netflix first arrived on the scene and allowed users to rent movies that would be delivered to their doorstep, industry giant Blockbuster laughed at them and stayed the course.
Once Blockbuster realized that this Netflix model was setting the entire market on fire, they attempted to match them with a similar service. Unfortunately for them, it was too little too late. Netflix’s customer experience and the alternate take on the industry had created an insurmountable gap between the two entities, and now there is only one Blockbuster Video location left in the world and Netflix is worth more than $20 billion.
At the end of the day, users will pay more for a more valuable service, and perceived value comes from a good customer experience.
As time goes on, customer experience has become the deciding factor that leads to customer retention.
By optimizing your customer experience, you could stand to see a tremendous increase in your retention efforts, which in turn leads to more profits and a healthier brand.
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