Last year, in the middle of the pandemic, my Airpods broke. I was reluctant to go downtown to an Apple store to get them fixed, but with work being fully remote I had little choice, so I put on my mask and braved the outside world.
Much to my surprise and delight, my experience at my local Apple store was exceptional! The store itself was extremely clean, the employees were socially-distanced but friendly, and best of all, the associate replaced my headphones immediately, at no cost to me. I found myself comparing every interaction I had with other brands to this last best experience, but nobody measured up.
It’s clear from my experience (and from the data, which we’ll get into later) that successful leaders understand how investing in customer experience helps their businesses differentiate and compete in an increasingly crowded marketplace.
In addition to investing in designing the experience, great leaders are also able to cascade their vision throughout their entire organization so that every employee, no matter their role, contributes to crafting exceptional experiences. In the Apple case, it’s clear that associates were empowered to exhibit brand values and deliver a strong experience to me.
Delivering exceptional CX is paramount for succeeding as a business. There are a few hard-and-fast reasons why customer experience matters so much and has such a strong impact on business performance.
REASON #1: Our Current Economy Revolves Around Customer Experience
Economies change based on what the core commodity is. In the early currency system, for example, we had an agriculture economy, where customers paid purveyors for food and other simple goods. As the system progressed, it shifted into a goods-based economy, with the core commodity being pre-mixed and -packaged items.
Until recently, we were in a service economy, where consumers paid for others to perform services and provide them with high-end goods that fit their specific needs. But today’s economy is all about experience.
While consumers drove previous economies en masse through supply and demand, now individuals are in the driver’s seat. Brands don’t make the decisions anymore. Instead, consumers choose exactly how and exactly when to engage with you.
The customer experience economy is governed by consumers: they share their experience, good or bad, with their networks and your organization. We’re hyper-social creatures. If a bad story goes viral, it can lead to a crisis for your business, and the opposite is also true. Thus, serving the customer first is more important than ever.
REASON #2: Customer Experience is the #1 Differentiator for Today’s Brands
For years, brands differentiated based on concrete metrics like product quality and pricing models, but in 2020, customer experience surpassed them to become the key brand differentiator.
Most organizations have been paying attention to this shift. A 2018 Gartner study found that 81% of companies expected to be competing mostly or completely on the basis of customer experience by 2020. Those 81% of companies had it right, and let’s hope the other 19% have caught up by now.
CX transformation happens at the nexus of design and orchestration.Read more
REASON #3: The Experience You Deliver Defines Your Brand
In today’s market, branding transcends logos or color palettes. A brand is a promise, not just of product, price, style, or availability. It’s a promise to deliver a memorable, exceptional experience.
Think about the brands that are dominating the national market, and those you prefer in your own life. Chick-fil-A, Zappos, Southwest Airlines, The Ritz Carlton, Microsoft, Casper: all of these companies sell wildly different products and services, but what they have in common is that they deliver stellar customer experiences that set them apart from their competition.
REASON #4: The Returns on Customer Experience Investments are Significant
The stakes have never been higher to invest in differentiated customer experiences. Watermark Consulting's 2019 comparison of companies graded by Forrester on customer experience showed a clear link between an organization’s customer experience success and their revenue performance.
Watermark assessed over a decade’s worth of returns, comparing the leaders and laggards to the S&P 500. Their findings were remarkable where the laggards were staggering 120 points below the leaders, and companies with a clear emphasis on experiences outperformed the market by 45%.
Despite the demonstrated ROI in differentiated customer experience, there’s a maturity gap when it comes to actually delivering. Most enterprise companies today say customer experience is a core pillar of their company, but we find that only about 20% have an executable plan to get them into the leaders category.
REASON #5: The Business Value of Investing in Customer Experience is Undeniable
Multiple market studies have shown that a focus on delivering exceptional customer experiences can have a notable impact on a business’s success. Here are just a few statistics around the business value differentiated customer experiences can drive:
- Improve brand perception – Microsoft found that 77% of consumers view brands more favorably if they seek out and apply customer feedback.
- Drive customer loyalty – according to pwc, 73% of consumers say a good experience is key in influencing their brand loyalties.
- Increase revenue – Forrester discovered that brands with superior customer experience bring in 5.7 times more revenue than laggards.
- Boost employee engagement – a study by McKinsey found that companies who focus on customer experience improvements see employee engagement increase by an average of 20%.
It’s clear from the numbers that customer experience matters more than ever before. Between capturing your market and differentiating yourself from your competition, a focus on customer experience will have a direct impact on your bottom line.
If you’d like to close the gap between your desire to transform your customer experience and actually taking action to do so, Avtex can help! Our holistic approach can help you design and implement a customer experience transformation that will take your business to new heights.