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
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.