In today's world, the success and failure of a brand or business depends on its customer experience (CX). Customer experience plays an important role in every aspect of a business. But what exactly is customer experience?
Let's first understand it in a layman’s way. Suppose companies X and Y both offer the exact product at the exact value. However, company X caters to all customer needs, whereas company Y doesn't. Given the choice, which option would you prefer? The response is evident!
Let’s see what Forbes has to say….
According to Forbes Advisor, “Customer experience describes the overall interactions a customer has had with a brand right from the point of awareness to purchase to loyalty or churn. It addresses the user’s entire buyer journey and how well they were able to “connect” with a brand.”
In other words, Customer experience is nothing but the overall impression that you and your brand leave on customers throughout their entire journey — starting from pre-purchase (via marketing or awareness), continuing through the actual purchase (online or offline), and extending to the post-purchase interactions (queries, customer service, solutions, etc.).
It also means whether a customer is able to emotionally connect with your product or not. Remember, every purchase being made has an emotional response from its buyers, whether good, bad, or neutral!
What do the statistics reveal?
According to a survey by Hubspot, 68% of people are willing to pay more for a product or service from a company that has a sound record of customer experience. Meanwhile, 92% of them will switch to another company after 3 (or fewer) bad customer experiences.
Now that you know the stats let’s see why customer experience is so important.
Why Is Customer Experience So Important?
Unlike the earlier times, consumer expectations are continuously evolving today. This is because they have the Internet to educate them and stay well-informed. Moreover, they have many options to choose from, and hence, their preferences can shift rapidly. Here comes the importance of customer experience. Your product will simply not sell if you provide a bad customer experience, as customers are less likely to engage with a brand that doesn't meet their expectations.
Below are the 5 key points why customer experience is so important. So, let’s dive in!
1. Increased ROI
Customer experience is extremely important to increase Return On Investment (ROI). A positive customer experience, for example, will make customers buy more often from you, upgrade to better and high-priced services or products, and remain loyal for a longer period, thus helping to generate more revenue.
Furthermore, a satisfied customer is likely to offer valuable insights and feedback. This, in turn, aids in product improvement, attracts more referrals, and ultimately contributes to increased earnings.
According to Forbes, brands that excel in customer experience bring in 5.7 times more revenue compared to competitors who fall behind in providing a positive customer experience. Yes, it is true!
2. Brand Loyalty
Will a customer remain loyal to your brand if you provide a poor customer experience? No, Right! Nowadays, customers have plenty of choices, and they love remaining loyal to brands that consistently provide a better customer experience. When consumers encounter a favorable experience with a brand, their confidence in the brand grows, making them more inclined to make additional purchases.
Loyal customers go beyond making repeat purchases; they also become advocates for the brand, sharing positive word-of-mouth and influencing the buying decisions of others. Additionally, they tend to be more forgiving of occasional brand missteps, recognizing that mistakes can occur and that a single negative experience does not define the overall brand.
3. Customer Satisfaction
Customer satisfaction is nothing but the extent to which your customers are content with your products or services. Customers stay loyal to your brand for a longer period if they are happy with your product.
To achieve customer satisfaction, you can focus on creating positive customer experiences, which may include offering advanced customer support and delivering high-quality products. These initiatives ensure customer satisfaction in engagement with your brand.
4. Customer Retention
Customer experience also plays a crucial role in customer retention which is also known as churn rate. Simply put, customer retention means a brand’s capability to maintain pre-existing customers and draw money from them.
A positive customer experience not only increases a customer’s loyalty to your brand but also improves the rate of customer retention. Retaining old customers is way more beneficial than gaining new customers. As per the statistics, gaining new consumers proves to be 5x more costly than satisfying and retaining existing customers.
5. Feedback and Improvement
Customer experience not only gathers valuable feedback but also provides insights that contribute to brand improvement. Understanding what works well and what doesn't, along with knowing customers' opinions, creates opportunities for refining products and services.
Furthermore, this procedure is essential in trust building. When customers observe that their opinions matter and lead to positive changes, it fosters trust in the brand. This faith in the brand is a key element in establishing long-lasting bonds with customers.
We live in times when we cannot afford to ignore customer experience. Establishing a personal touch and emotional connection with your customers through your products is necessary. Customer experience is the general impression a customer forms about your product or brand. It can be both positive and negative.
While a positive customer experience is beneficial for a business, negative customer feedback can harm it. Brands generate more revenue by providing a positive customer experience. Moreover, it helps in customer retention and satisfaction and generates valuable feedback and insights from them. It further assists in building customer trustworthiness and commitment to your brand.
Thus, in today’s highly driven world, brands are required to provide better customer experiences to sustain in the industry and distinguish themselves from their competitors. So, it’s crucial to actively engage and elevate customer interactions for sustained success in the market.