Tuesday, December 31, 2013

A Remarkable Customer Experience Trumps...

Image courtesy of Ben (Falcifer)
I originally wrote today's post for 360Connext on November 8, 2013. 

What does a consistently great customer experience trump?

You've read a lot of posts about "this trumps that" and "that trumps this." I'm guilty; I wrote one. But let's talk about the customer experience. What does it trump?

 Believe it or not, a lot of things! Like...

  • Expensive marketing initiatives
  • Super Bowl-sized ad campaigns
  • Rebranding efforts
  • Competitive pressures
  • Sales efforts
  • Price
Advertising is the tax you pay for being unremarkable. -Robert Stephens

Why does all this matter?

Being a brand with a consistently great customer experience means your company can focus on current customers, on keeping them - and not on acquiring new customers. Why? Assuming a current customer loves the brand, has had nothing but great experiences, and is a true fan - an advocate - he will work for you. You don't need to spend massive budgets on advertising and marketing; the experience speaks for itself. And you'll benefit from some other cost efficiencies, too. Let me explain the economics of loyalty.

Your most loyal customers, i.e., your advocates, your raving fans:
  • Are less price sensitive
  • Will pay a premium for a better experience
  • Stay longer, spend more, churn less
  • Expand their purchases/relationships to other/new products or services you offer
  • May overlook product shortcomings
  • Are more likely to forgive occasional/infrequent service shortcomings (just make it right, though!)
  • Cost less (e.g., marketing, advertising, promotions)
  • Have fewer complaints
  • Provide feedback and want to help you improve and succeed
  • Become technical support for you by helping other customers (answer questions, solve problems)
  • Will evangelize the brand for you
That all sounds pretty good, right? Don't believe it, do you? Here are some hard numbers from Temkin Group's latest The Economics of Net Promoter report:
  • Promoters are almost six times as likely to forgive: 64% of promoters are likely to forgive compared with 11% of detractors.
  • Promoters are more than five times as likely to repurchase: 81% of promoters are likely to repurchase compared with 16% of detractors.
  • Promoters are more than twice as likely as detractors to actually recommend: 64% of promoters have recommended the company compared with 24% of detractors.
And from Temkin Group's ROI of Customer Experience report:

Customer experience leaders have more than a 16 percentage point advantage over customer experience laggards in consumers’ willingness to buy more, their reluctance to switch business away, and their likelihood to recommend. A modest increase in customer experience can result in a gain over three years of up to $382 million for US companies and up to £263 million for UK firms, depending on the industry
.

This infographic from Desk tells us that 9 out of 10 customers will pay more for a better customer experience.

There are a ton of other studies and stats out there to show that the proof is in the pudding. If you're not focusing on delivering a great customer experience, you're missing out. And you're wasting time and money. Customer experience trumps all that.

O, and there's one more thing that a great customer experience trumps: the market! Customer experience leaders have outperformed the market for the last six years.

What can you do? Get started! Focus on the customer. Focus on delivering a great customer experience. Provide a memorable experience - create fans - and trump all that other stuff.

Everything starts with the customer. -Louis XIV

Having just given a royal nod to the customer, there is this, a bonus question: What trumps a great customer experience? Only one thing. Can you guess?

Not sure? Read this post for the answer: This Trumps Customer Experience.


6 comments:

  1. Hi Annette,
    Whilst I agree with you and what you have written in this post, I think we also need to reframe the discussion to engage decision-makers in firms and what they care about (greater profitability, lower costs, better results, higher efficiency etc). I know that you have done that but, perhaps, we need to rearrange the order of our reasons about why delivering a great customer experience is essential and, in doing so, it may help us illicit more support from company boards.

    What do you think?

    Adrian

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    1. There you go, talking about business outcomes again. :-) Yes, I think if we put the reasons into those terms, it certainly helps.

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  2. Adrian makes an interesting point.

    But if the senior members of an organisation are hell bent on short sighted self interest then I do wonder how far you can really go.

    Maybe we should worry more about helping people who do understand than worrying about those that don't.

    You can lead a horse to water but you can't make it drink

    James

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    Replies
    1. Unfortunately, there are too many horses that can't be forced to drink.

      If they don't get it, we can certainly continue to try to get the message across (in their terms, their language), but it is definitely more rewarding to work with those who get it, appreciate it, and live it.

      I'm not giving up. I had some very stubborn horses when I was a young girl, growing up on a farm. :-)

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  3. I agree that providing a great customer experience is a foundational building block and without it the other part of running a successful business will tumble. That said once you have that priority clearly set it doesn't mean you don't need to put time and effort into other parts of your business. So in a nutshell its about priorities. As a small business owner, we rely heavily on positive word of mouth referrals and have it very clear in our minds, our number one priority is always to ensure the client has a great experience when they work with us.

    thanks
    Lynn

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    Replies
    1. Thanks, Lynn. At the heart of everything we do as a business is the customer, whether it directly or indirectly impacts the experience.

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