If there’s one reason we have done better than our peers in the internet space over the last six years, it is because we have focused like a laser on customer experience.
― Jeff Bezos, Amazon CEO
Customer experience, or CX, seems to be the new cornerstone of modern marketing strategies. Today, at least 89% of companies compete mainly in the CX battlefield, while in 2010 only 36% of them prioritized customer satisfaction. What is it exactly that prompts more and more businesses to adopt a customer-centric mindset?
Before analyzing why CX is fundamental to business performance, let’s get a clear picture of what it means. The definitions are many, but at its core, it all boils down to the impression a consumer has after interacting with a company. Customer experience is created at every stage of the customer journey, and everything an organization does has an effect on consumers’ decision to come back. Whether your clients are browsing your website, contacting your customer service, or receiving the product, each interaction contributes to the holistic perception of the experience with your brand.
1. CX Is Behind Brand Switching
Today, it’s easier than ever before to switch from one brand to another. In fact, it’s often a matter of a few minutes between clicking the “Cancel” and “Subscribe” buttons. The reason for staying with a brand or leaving it lies in customer satisfaction. According to Closing the CX Gap: Customer Experience Trends Report 2019, more than 76% of consumers worldwide switch to a competitor after just a single bad experience.
In this so-called “switching economy,” it’s become extremely hard to build loyalty. Yet customers are not swapping brands for no reason—they’re looking for better experiences. Understanding customer needs and expectations and creating personalized positive experiences will inspire brand affinity and improve customer retention rates. “As many industries enter an economy where consumers are becoming comfortable with switching brands, customer experience is now a vital tool in today’s business strategies. Companies need to go beyond merely claiming to put customers in the driving seat and actually put them there,” said Chanice Henry, editor-in-chief of CX Network.
2. Word of Mouth Travels Far
When it comes to referrals, we can’t ignore the power of customer experience multiplied by modern technologies and social media habits. Today, any experience has the potential of becoming a viral story, and, as practice shows, sharing isn’t always caring. A survey by Zendesk found out that customers communicate bad experiences through social media more often than good ones (49% for bad and 38% for good).
Delivering a poor experience is more likely to become public and get people to talk about it. What’s more, other consumers are all ears—they are ready to learn from others’ mistakes. Along with recommendations from friends and branded websites, consumer opinions read online remain one of the most trusted forms of advertising. However, customer experience works both ways—assure customer satisfaction and you will earn referrals and generate a positive social media buzz around your brand.
3. Customer Expectations Are Rising
And successful companies are rising to this challenge. Modern consumers crave instant and convenient experiences and on-demand products. They are used to set a pretty high bar and expect companies to meet and even exceed their expectations.
The need for high performance and seamless customer experience is especially great when it comes to online interactions. Consumers want immediate access to the desired content across a variety of devices. Google research revealed that up to 90% of mobile visits are abandoned if a page takes longer than 5 seconds to load. In short, speed equals revenue. The same research shows that, contrary to logic, most mobile sites are still slow and require image optimization. Another way to avoid delivering frustrating digital experiences is to tap into the power of a content delivery network, which will significantly improve your web performance.
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4. Better CX Adds Extra Value
Modern consumers want their feedback to be heard, their loyalty to be rewarded, and their problems to be resolved quickly and efficiently. We’ve seen that falling short of these expectations can drive clients away. A great experience, on the other hand, may result in quantifiable value.
The ability to deliver a first-class customer experience is both precious and rare. A number of studies demonstrate that most consumers aren’t satisfied with their experiences, even though most organizations believe themselves to be customer-centric. This frustration leads to the willingness to pay extra for a welcoming and efficient experience.
“The ‘Experience Economy’ has ushered in a new B2C mindset, steering brands beyond emphasizing products and services to selling rich consumer experiences,” said David Clarke, global CXO and experience consulting leader at PwC. “Our findings quantify the potential ROI on experience investments, upwards of 16%.”
In a world defined by evolving technologies and consumer expectations, ignoring customer experience is no longer an option. Consumers are getting less patient and less loyal to brands that take them for granted. The products and services they need are often just a click away, and most buyers don’t consider it a hassle to switch between brands anymore.
The shift in consumer mindset has made it difficult to build trust and loyalty. Today, rather than comparing products, branding, or even prices, customers are mostly focusing on their experience. Therefore, in this new battleground for business differentiation, prioritizing customer satisfaction is key.
Apart from guaranteeing repeat purchases, delivering a great experience can help you earn referrals and even elevate your brand reputation. The good, the bad, and the ugly—any experience can end up online and create a ripple effect. Customers can easily access online reviews and comparisons and take advantage of them before making decisions.
Whether your company is already prioritizing customer experience or not, your competitors most likely are. Many successful companies are now designing their strategies around customer experience in order to adapt to the evolving business landscape. Is your organization keeping up?