Today, customer experience is not just the combination of all the interactions that a customer has with a brand throughout the years, but also a balancing act where their present needs must be satisfied while also anticipating expectations of tomorrow. Each moment is an opportunity to create competitive advantage, contributing to a superior experience throughout the customer journey. it is not always clear where to make the best investments in order to improve, nor is it always clear how to measure the success of a company’s CX work.
FOCUS ON RETURNING CUSTOMERS
While many companies focus on customer acquisition, when thinking about customer experience, the reality is that results are not that satisfying when compared to what can be achieved by focusing on customer retention. Studies show that almost eighty percent of future profits of a company will likely come from twenty percent of their repeat customers.
Benefits of improved CX
When we talk about improving customer experience in order to increase revenue and brand awareness, here are four main benefits that a company can have:
- Extended customer life: Creating lasting business value through improved, long-term customer relationships. Attracting a new customer is much more expensive that retaining a new one, between five to twenty-five times more. If your customer base is satisfied by the experience they will return over and over again, and this will benefit the net profit of an organization throughout the years. Being able to retain customers is not something easy to do, given the wide competition that can attract them and the fact that just one bad interaction can lead to a loss. Being able to increase the retention rate by just five percent can lead to increased profitability, between 25 and 95 percent. They also have higher average order value compared to the so-called first-time buyers.
- Wider customer networks: building a bigger base by inspiring loyal customers to become brand advocates. This means that they bring a lot more than just their own lifetime spend. According to Nielsen, 92% of customers trust recommendations from friends compared to 33% trusting online ads. A report on Forbes shows that 40% of happy customers will share their experience on social networks but if the experience was not good sixty-seven percent affirmed that they would actively try to convince their inner circle from buying from that company, also forty-two percent would share that experience with followers on social media.
- Improved crisis management: trust is a core element when it comes to customer experience. When customers believe in the business that they have a relationship with, they are more likely to communicate any issue directly to the source. This allows a company to manage its’ brand reputation without any public outrage. A bad reputation can cause more damages than just lost business. It can lead companies to losing investments and facing difficulties when attracting talent. Being able to preserve the trust of customers through an efficient and honest process during a crisis is essential.
- Effective resource use and reduced personnel costs: Companies are automating certain activities such as queue management or the first point of physical service. This change enables a better use of human resources, as they do not have to deal with answering questions or directing users, which can be easily done by BOTs. Instead, they can devote their skills to performing their other roles not covered by technology. This improves productivity and results in reduced personnel costs.
For companies to have a long-term and rewarding relationship with their existing customers, and for them to become advocates, a customer experience of good quality is necessary and must cover the entire customer journey. This way they will also be able to reduce costs related to the acquisition of new clients, given that they are already comfortable with your brand and more likely to prefer your offers over the ones of your competitor.
In conclusion practical ways to improve your CX and retain your customers?
- Deliver an extraordinary customer service. Nowadays, as brands try to improve customer experience, consumers expectations are continuing to rise. They want to be recognized through the most convenient channels of communication and if there is a need to change channel, they require not to repeat any information to the following agent. This means companies have to provide an omnichannel customer service.
- Nurture loyal customers. Create a loyalty program because rewarding them with personalized benefits such as coupons, early access to sales or new products are all ways to exceed expectations. This way you will show that you have them in mind and they will become your strongest brand advocates.
- Conversational AI. This solution allows to use artificial agents, who can understand language, interpret intentions, and answer the same way a human would, but faster, on numerous conversations at the same time. Everything can be handled in a more accurate way and for a lower cost. It can be applied to any channel and language, with access to the company’s CRM, customer histories etc.
- Effective email marketing. It is important to share with your customers that you are grateful for them so “thank you emails” are an extraordinary way to build stronger and healthier long-term relationships. But also use personalized emails to inform your audience of the latest updates, partnerships and news with engaging content.