How was your last experience as a customer? To answer this question, you might start thinking about the last experience you had, where was it, from whom you received it and how much you liked it. But if that experience was an awesome one, your mind would be filled with beautiful memories and you will start describing it without trying much to remember about it.
Similarly, if you had a terrible experience, your mind will take you to the memories of emotions like anger, frustration and so on and you will start cursing the brand or organization with which you had that bad experience.
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Same is with your customers too. If you are able to provide them with a great Customer Experience, they will become literally your marketing agents, and that too free of cost! In fact, companies that excel in the Customer Experience are able to increase their revenues by 4%-8%.
Let's learn what Customer Experience actually means and how important Customer Experience is in terms of impacting the growth of your business.
What is Customer Experience?
In the words of Gartner, Customer Experience is defined as "the customer's perceptions and related feelings caused by the one-off and cumulative effect of interactions with a supplier's employees, systems, channels or products."
Basically, the Customer Experience would be having two crucial elements which you need to focus on. First is your Customer and the other is your product. If you maintain superior quality of your product and are able to satisfy your customers, you will be simply able to deliver the experience that every customer admires.
Importance of Customer Experience
Customer Experience is important in many ways. Let's explore how it helps you to grow your business:
- Helps in increasing sales
- Helps in reducing costs
- Helps in increasing profits
- Helps in increasing Customer Loyalty
- Helps in reducing customer churn
Providing a great Customer Experience fetches you these advantages. Let's know more about them.
1. Helps in increasing sales
A better Customer Experience directly results in a better sales. According to a Walker Study, by the end of 2020, Customer Experience will overtake price and product as the key brand differentiator. This means that Customer Experience breaks the old relation of price and demand where demand declined due to increase in price and demand increased due to decrease in price.
If Customers have a good experience, they are less likely to switch to another brand for their next purchase. People also tend to pay more for a product and service where they are loyal to. This helps ensuring that businesses have good sales from repeat customers.
2. Helps in reducing costs
A good experience delivered to your customers helps you in reduction of costs. Which costs? The cost of acquiring more customers, the cost of retaining churning customers, the cost of marketing your brand. You now that acquiring a new customer is anywhere from 5 to 25 times more expensive than retaining an existing one, depending upon you industry.
Reason being the satisfied customers will become your brand ambassadors and tell their friends and known ones about the awesome experience they had, thereby endorsing your brand in a way. Whereas, a bad Customer Experience leads to more costs in setting up things again for the miffed customers in order to retain them.
3. Helps in increasing profits
As stated earlier, people tend to pay more for a better Customer Experience. No, we are not talking about those few affluent group of people who overspend their money on anything they like. Studies suggest that 86% of people are willing to pay more for a great Customer Experience. This means you can increase your margins and actually earn more just by focusing more on Customer Experience.
So if you really want your business to do well and yield you high profits, follow a customer-centric approach and deliver such an experience that your customers wish to receive even by paying more for it.
4. Helps in increasing Customer Loyalty
You know what is one common thing that most of the successful businesses have? A group of loyal customers. Loyal customers are those who are your happiest and the most satisfied customers. And 65% of a company's business comes from existing customers.
As stated in the beginning also, happy customers become your marketing agents. They not only choose your products and service again but also spread a good word of mouth about them in the market.
Now it is in trend that the most loyal customers make videos of themselves reviewing the product and posting it on YouTube. And one viral video can attract more customers and make a product go a long way. Studies suggest that 75% of loyal customers will recommend a brand to friends and family.
A great Customer Experience generates more Customer Loyalty which eventually leads to more number of loyal customers referring your brand to their known ones ultimately giving you more business.
5. Helps to reduce customer churn
Will you ever want to leave a brand who always provides you an awesome Customer Experience? Never, isn't it! Similarly when you deliver a brilliant experience to your customers, their Life Time value increases and they are less likely to switch to any other brand.
Researches suggest that 93% of customers were more likely to be repeat customers at companies with excellent customer service. After all, everybody wants to be happy and if a Customer Experience is good enough to make them happy, they would like to go through that experience again.
If you want to know more about the experience of your customers and how they are feeling about their experience with your products, services and organization, keep collecting Customer Feedback from them and take the appropriate actions required on it to improve Customer Experience.