Any CEO of a sales-driven business will tell you that a positive customer experience plays a significant role in a business’ success. With social media and other technology so prevalent, companies are not only finding it easier, but also more challenging to attract and retain customers.
The challenge that many companies face is how to stand out in a crowd, while also sticking to their core values. Future performance often relies on past results, and multiple studies have shown that the greatest business improvements are made when customer needs are placed at the forefront. The CEOs of top companies have revealed through survey data that improving the customer experience and finding ways to focus on customers are among their chief priorities.
According to research compiled by the Aberdeen Group, the return on investment (ROI) for emphasizing customers is phenomenal. The data indicated that high-performing companies that stress the importance of a positive customer experience witness year-to-year revenue increases of over 35 percent compared to only 7 percent for companies that do not have a detailed customer experience plan. With numbers such as these, it’s easy to see why the customer experience is so important. Here, we discuss why it’s imperative to get and keep customers and how measurable improvements can be made.
How Important Is Customer Retention?
Some companies place a great deal of emphasis on how to attract new customers, and while this is good, enough cannot be said about customer retention. One of the most widely accepted indicators of overall company growth is the Net Promoter Score (NPS), which is basically a one-question survey designed to gauge customer loyalty. The survey asks whether the customer would recommend the company to a friend or family member. The customer then answers on a scale ranging from 1 to 10, with lower scores indicating a lower level of satisfaction and higher scores equating to higher satisfaction with the company.
Another reason why customer retention is so important is cost. Statistics indicate that it costs approximately five times more to acquire a new customer than it does to keep an existing customer. In a business environment where money is so important, any way to reduce costs is seen as a positive and will definitely serve as a way to improve a company’s NPS score.
Successful CEOs are usually open to discussing the importance of a superior customer experience, and they can be seen in interviews and in the press promoting a customer-centric philosophy. Former Sprint CEO Dan Hesse once said that nothing drives profitability like a great customer experience. He also noted that even if companies cannot afford to invest in other aspects of their business, they should use whatever resources they can to focus on improving their connection with customers. Hesse suggests looking at what successful companies are doing and finding ways to improve or offer better alternatives for customers.
Using Customer Feedback to Your Advantage
In keeping with the NPS score, which is based on feedback, there are a variety of other ways to gather customer opinions, which can be used to help companies develop better customer experience strategies. For customer-facing businesses, feedback can be gathered in person by using signage or a feedback device located at the point-of-sale. This enables the business to obtain honest opinions right away while the experience is fresh in their minds. Using this method, the business owner also has the opportunity to discuss or correct any issues on the spot. Even after a customer leaves an establishment, using collected feedback gives the business owner the opportunity to follow up with surveys, coupons, and a variety of other means to stay connected to customers.
Another major advantage of upfront customer feedback is that it gives business owners the opportunity to really get to know their customers. In-depth customer experience analysis will reveal what the customer responds to, what they expect from customer-employee interactions, as well customer journey mapping. Additionally, this in-depth customer analysis allows business owners to connect customers to other products and services that they are likely to be interested in and will serve as valuable training for sales staff, who will have insight on what customers really want.
Improving the Customer Experience
As companies seek to expand, a concerted effort will need to be made to improve the customer experience and strengthen customer loyalty. This can be accomplished with technology-driven data analysis, the effective use of social media, as well as artificial intelligence (AI) in order to further personalize the customer experience.
Nearly every business across all industries has a customer base that they are tasked with serving, so companies cannot afford to ignore how vital the customer experience is to their overall success. While attracting and retaining customers is challenging, it is doable, provided that strategies are thought out and customers are able to see the value in what a company has to offer. By remaining focused on what customers truly want and responding to feedback, companies can improve their financial standing and keep their customers around for the long haul.