Two years ago the Harvard Business Review (HBR) published a detailed analysis on how to quantify the value of the customer experience (CX). Their research showed that across different industries and business models it could be demonstrated with hard data time and again that the companies investing in improving their CX created better returns for the business owners.
It’s logical to suggest that improving the customer service will make your business perform better, but it is research that needs to be constantly emphasised because as the customer journey keeps evolving it requires investment to keep up with the CX that customers expect.
The negative results of not investing in a great CX also helps to make a similar argument, although as a defensive strategy against loss rather than with the intention of improving how the business operates. Customer service expert Shep Hyken recently published some powerful statistics (based on US customers) in Forbes magazine that I think are worth sharing as they really demonstrate the downside of not investing in CX.
Asked whether a poor experience with a company had made them switch to a competing brand 49% reported that they had and 67% said they had done this more than once in the past. The main reasons were rude or unhelpful staff, but importantly a major reason was also that they were passed from one agent to another without getting a resolution to their problem.
As Shep points out, the implications here are obvious. Half your business is quite literally at stake if you don’t ensure that the CX is at the very least satisfactory. When drilling down to the younger Millennial consumers the willingness to switch is even higher, with 62% ready to move brand because of a single poor experience.
Shep goes on to offer some tips on improving CX and you can read the Forbes article by clicking this link, but I think it’s worth emphasising just how important these statistics are. No matter how good your products are and how attractive your prices are, if you have competitors in the marketplace and you don’t offer an easy and satisfying experience to customers then they will migrate to your competition. It’s that simple.
Ensuring that you offer a great CX today is not just a “nice to have” strategy that delights a few customers, it is a prerequisite for holding on to the customers you already have. As the HBR research pointed out, you can see an improvement in business by creating a business strategy focused on improving your CX, but you can also also see a dangerous loss of customers if your CX is poor. This is one investment that can be defensive and positive at the same time.
Photo by Julia Taylor licensed under Creative Commons.