Customer experience has become a critical differentiating factor for brands across all industries today. Fuelled by the rapid evolution of technology, customers are now more powerful than ever before, and markets are becoming increasingly competitive as digital disruption takes hold.
Brands in the U.K. are currently losing nearly £15 billion annually due to poor customer service and business leaders recognise that competing on price, product or service alone is simply no longer enough. Instead they must focus on truly strengthening and cementing customer relationships and delivering customer experience excellence.
In this post we ask the question “What is customer experience?” and “What are the benefits of delivering excellent customer experience?”
What is customer experience?
Forrester offers a simple definition for customer experience as “How customers perceive their interactions with your company.”
The most important part of this definition is customer perception. Customer experience is not about what you do as a company or a brand but about how a customer perceives your brand based on all of their interactions with it over time.
Each time a customer visits your website, contacts your service team, or sees an online ad for your brand, it will affect their perception and impact the customer experience.
The emotions associated with each interaction will shape the customer experience over time.
If we consider a few different experiences such as a rollercoaster ride or an online mobile tablet purchase, each of these will be different for the individual depending on the context of the experience and the emotions felt as a result of that experience.
A rollercoaster ride may be a thrilling and enjoyable experience for one person while it could be a most terrifying experience for someone else who has an extreme fear of heights.
A person’s emotion is altered based on how the interactions make them feel. People remember the emotions attached to an experience rather than the experience itself. The context of each customer interaction is also an important element in shaping customer experience and will impact how each experience is perceived.
An online purchase of a mobile tablet may be enhanced for a customer if a brand can recall the customer’s previous online search activity and combine it with customer data to present the most suitable tablets for her individual needs.
The importance of context in the customer experience
By understanding the context of a customer interaction marketers are in a much better position to deliver a personalised and relevant customer experience that evokes positive emotions.
Marketers that can harness an understanding of customer context and combine it with the ability to dynamically respond in real time will be in a much stronger position to deliver customer experience excellence. Marketers must be able to anticipate and deliver contextually relevant content, commerce and offers to their customers – even before they know they want it.
The future is all about building the systems and technology that let us deliver the right experience to the right person at the right time. Achieving customer experience excellence has never been more important for increasing customer loyalty, advocacy and engagement.
What are the business benefits of excellent customer experience?
There is little doubt that the brands that have achieved the highest levels of customer experience excellence are reaping the rewards of their investment. Aberdeen Groups’ 2013 next generation customer experience management study revealed that 83% of B2B and 85% of B2C brands invest in customer experience management programs to grow company revenue and improve the financial health of their business.
The business benefits of excellent customer service
• Increased customer loyalty
• Higher customer retention
• Reduced churn
• Higher lifetime customer value
• Greater brand equity
• Reduced costs of service
Aberdeen Group’s research also revealed that the world’s top performing businesses enjoy an average of $316 million in incremental annual revenue as a result of their customer experience management initiatives, compared to their lower performing counterparts. The study was based on companies with an average annual revenue of $1.08 billion, but across the board, organisations of all sizes can expect the business benefits of customer experience excellence to include increased customer loyalty and retention, reduced churn, higher lifetime customer value, greater brand equity and reduced costs of service.
Interested in learning more about customer experience and how your business can achieve the benefits of customer experience excellence?
Check out the digital experience hub to help you master digital customer experience and drive your ROI upwards.