How long does it take for a customer who contacts you through social media or your contact centre, or calls your company to be connected to a human agent?
If it takes more than 20 seconds, the customer experience (CX) you provide is worse than 80% of companies out there. Poor customer experience could result in over half of your customers leaving your brand after as little as two bad experiences. We have gathered some statistics that show the importance of CX in 2021. We start by defining CX, and then looking at the numbers that show why you should always improve customer experience and take it seriously.
What is CX?
CX is an aggregation of the quality of your products and services, your customer care, branding, dependability, availability, your website, advertising, user manuals, and ease of use. In other words, CX denotes all the aspects of your company’s offering. Conducting customer surveys is one way to measure the impact of your CX efforts and determine whether you are meeting customers’ expectations. CX is generally a misunderstood concept because many companies believe that if they create quality products that customers need, they provide great CX. This is not always the case. For example, your company can have the greatest brains that create the most reliable products, but if you fail to make it easy for customers to buy and use your products, your customer experience is lacking.
Getting CX right means your ability to look at everything your company does and ask yourself how it contributes to the way customers perceive your brand. This means that you need to care about messaging at all customer touchpoints throughout the customer journey: when advertising the product, the sales or e-commerce process, and providing support or sending a follow up to the customer after the sale. If this process is smooth for the customer, you can say that you offer a great customer experience.
How Important is CX?
Suppose half of the customers interacting with your brand are willing to switch after two negative experiences. In that case, we can say that CX is vital for your business growth and sustainability. In other words, when customers stay because the experience they are getting is positive, CX promotes loyalty.
Loyal customers will keep coming back to support your business, provide positive word of mouth, give it the revenue it needs to grow, and provide a return on investment for investors. 84% of companies that make an effort to improve their customer experience strategy say that they have boosted their revenue.
What are the Most Important CX Elements for Consumers?
According to the multinational professional services firm PwC, approximately 80% of consumers in the United States prioritize speed, convenience, hospitality, and knowledgeable assistance as the key factors that make up excellent customer support.
People outside of the U.S. seem to prioritize speed even more than Americans do. PwC’s Global Consumer Insight Survey found that more than 40% of respondents were willing to pay more money for same-day deliveries.
What are the Consequences of Poor CX?
Just as great CX has excellent benefits, poor CX also has its ramifications. A survey of 10,000 U.S. consumers revealed that customers spent less on a company after having a bad experience. This can translate to such companies suffering a 3% loss of revenue on average because of bad CX.
Even processes as seemingly mundane as ease of purchase can affect CX. For example, 74% of consumers will ditch a brand if they find the purchasing process to be too complicated. In the United States, $1.6 trillion is lost each year by companies whose customers switch brands due to bad CX.
How Does CX Affect Sales?
Strong correlations have been drawn between delivering excellent CX and increased sales. This is why it is often said that successful organizations do not just focus on closing deals; they put much effort into improving customer loyalty. When customers are happy with their experience, they will keep coming back for more. For instance, 87% of customers, who believe that they had a great experience with a company, say they are likely to purchase from that same company.
Are Customers Willing to Pay for Better CX?
Gone are the days when having the cheapest product would keep customers coming back. What is important today is understanding what will make the customer feel that they had the most incredible experience with your products.
Suppose customers believe that they will receive a good customer experience. In that case, they are willing to pay as much as 17% more for a product. For example, 52% of customers say they will pay more for an experience they believe is speedy and efficient.
How Important are Employees to CX?
Employees play an essential role in CX. This is a view supported by the reality that 46% of consumers say that they “will abandon a brand if the employees are not knowledgeable.” Such a view indicates that companies that want to improve CX need to ensure that the employee experience sufficiently equips employees to provide customers with the experience that the customers want.
The importance of human interaction is shown by a 2017 PwC survey, which found that 44% of consumers do in-store shopping daily/weekly, which is an increase from 36% in 2014. Worldwide, an average of 75% of customers, say they want more human interaction in the future, even as technology continues to improve.
How Does Customer Segmentation Affect CX?
Customer segmentation refers to using customer data to divide customers into different groups or segments. This data is usually obtained from customer feedback, analytics data and other CX tools. With this data, your organization can create customer personas (the imaginary model of an ideal customer).
Creating customer personas helps a brand segment its customers so that they can be placed into more homogeneous groups. This helps the brand to more effectively design the CX for each group, making it possible to deliver a personalized experience, create a positive customer experience, improve customer retention, and reduce customer churn.
Customer personas have been proven to yield marketing benefits. This view is supported by 80% of marketers who believe that using personas is likely to increase conversion rates.
What Do Customers Think About Companies’ CX Strategies?
From the numbers, customers do not seem very pleased companies’ efforts to provide a superior customer experience. For instance, in the United States, only 38% of consumers say that companies’ customer care representatives often understand their needs. Outside of the U.S., 46% of customers indicate that they are happy with companies’ CX strategies.
How Seriously do Businesses Take CX?
Most businesses understand the importance of great CX. For instance, 89% of companies surveyed by the IT service management company, Gartner, “believe that customer experience will be their primary basis for competition” in the future. To restate, these companies believe that an excellent customer experience could not only be a competitive advantage but provide their primary differentiator. Companies are also committing more resources to CX. Another survey conducted by Gartner in 2019 showed that among the respondents, only 10% of companies did not have a Chief Experience Officer (CXO) or Chief Customer Officer (CCO). This is down from 39% two years ago.
How Well are Companies Doing in CX?
Companies have made strides towards improving their CX by designating new roles tailored to creating the best customer experience, as indicated above. But how well are they doing? It looks like getting CX right is an uphill battle for many companies. To show how difficult it is to get CX right, only 8% of customers in a Bain & Company survey reported having a great customer experience. This was in stark contrast to the 80% of companies in the same survey who believed the CX they provided was excellent.
Who Should Lead The CX Strategy In An Organization?
Even though we often believe that the critical players in delivering excellent CX are the customer-facing employees who work in marketing, sales, and customer service, CX should be led by the company’s top executives. Also, every employee in the company needs to understand their role in contributing to a customer-centric experience. Behind every successful CX strategy is an executive who understands the importance of creating value for customers. This is why 60% of companies that have a CEO who takes customer experience seriously, tend to have a stronger bottom line than their competitors.
How Important Are CX Management Tools?
Improving CX without the right tools is almost impossible. For example, 69% of consumers say that they want an individualized customer experience; however, only 40% of brands can offer this type of experience. One of the reasons why so many companies cannot offer a better customer experience is that they do not understand the crucial role of CX management tools. Without the right CX management tools, there is no way for companies to know what customers need.
Tools that involve mobile messaging and machine learning capabilities, like Chatbots, are helping companies gather the data they need to provide great CX and improve brand loyalty. This is becoming important in this age, where 72% of customer interactions will involve these emerging technologies.
Customer relationship management (CRM) tools, such as Salesforce, help companies to organize their customer data in a way that allows them segment their customers, improve automation, and identify where in the lifecycle each customer exists.
However, these technologies have their limits, and need to be bolstered by human effort.
How do you Measure CX?
For your brand to determine how effective its CX initiatives are, it’s vital that you can measure your CX management. Tools like the Net Promoter Score (NPS) Calculator can help measure how your customers perceive your services, their brand loyalty, and their likelihood of recommending your brand to others.
However, your methods of measuring your CX efforts’ effectiveness mustn’t end up frustrating your customers by making challenging demands. For example, if you use customer satisfaction surveys, make it easy for customers to fill them in. These surveys should not take beyond 3 to 5 minutes to complete and should have 15 to 20 questions max.
Is There a Return on Investment on CX?
If the importance of CX is to be justified, there has to be evidence that there is a return on investment for those that embrace it. According to Watermark Consulting, a company focused on assisting firms in creating great CX, ‘CX Leaders’ receive three times in returns what ‘CX Laggards’ do. Retailcustomerexperience.com, a web resource that helps “retailers differentiate on experience, rather than on price,” puts this figure at 5.7 times.
Research from the software as a service (SAAS) company, Dimension Data, shows that 84% of companies, that actively prioritize CX, gain an increase in revenue. This is a view supported by a report from the global professional services network, Deloitte and Touche, which claims that companies that align themselves with customers’ needs are 60% more profitable than companies that do not.
How Do Businesses Intend to Boost CX in the Future?
Businesses are beginning to rely heavily on AI and machine learning for their CX needs. For example, a report by Gartner says that in 2019, “25% of all customer interactions were automated through AI and machine learning. With 90% of companies now planning to deploy AI within three years, this number is expected to grow to 40% by 2023.”
Artificial Intelligence, Virtual Customer Assistants and Chatbots, Omnichannel Customer Engagement, Real-time Event-Driven Application Architecture, and the Internet of Things are the top 5 trends in CX going into 2021.
Feature courtesy https://thecxlead.com/topics/importance-of-customer-experience/