Everyone knows that a company’s success depends on customers — and specifically, customers’ experience. However, sustaining customer interest can be difficult. Companies must compete for customer attention in a world where consumers have more options then they have ever had before. In the last ten years, customer experience has become increasingly more important in this new world where customers want to have more of a say in how corporations portray themselves.
The Importance of Perception
Customer experience is all about perception. How customers perceive a company’s products and brand defines their experience. It does not matter what the company thinks of their product offerings if a customer has a miserable experience because that experience determines how they view the company. This, coupled with the fact that people are more prone than ever to rely on referrals and listen to reviews, should make creating an excellent customer experience a priority.
If a company can better their perception in the eyes of the customer, they are more likely to increase sales. However, how important is the connection of perception to customer success? According to McKinsey, 70 percent of the customer experience is based on how the customer feels about how they were treated. And according to Gartner, 89 percent of companies expect to compete mostly on the basis of customer experience, versus 36 percent four years ago.
Companies that can make customers feel like they are important should see their efforts reflected in sales, but to further prepare to make customer experience a priority, companies have to prepare for the future today to stay ahead of the competition.
Customer experience is projected to take over price and product as the key differentiator in 2020.
- 86 percent of customers will pay more for better customer experience.
- Business proactively manages and invests in customer experience to:
- Improve customer retention — 42 percent
- Improve customer satisfaction — 33 percent
- Increase cross-selling and up-selling — 32 percent
- More than 50 percent of organizations will redirect their investments to customer experience innovations, as predicted by Gartner.
Customer experience is a key component in how companies do business. While enterprise companies used to think that the price or quality of a product was the primary issue for sales, they now realize that customers will pay more to have better service. Even if a company has a high-quality product but the customer service is lacking, customers may go elsewhere. Obviously, this will have a considerable impact on revenue, so businesses will have to continue to pay attention to customer perception.
Perception, Success, and Sales
How does customer perception impact sales? Customer success is tied to revenue — but by how much? Brand loyalty, professionalism, and customer reviews determine and result in success. Forrester Research found that companies who made a point to lead efforts on customer experience saw a 17 percent compound average revenue growth rate compared to only 3 percent of growth for those who did not. Temkin Group, a customer service research and consulting firm, found in a study that 86 percent of respondents that felt they received excellent customer experiences were likely to repurchase from the company. On the other hand, the company found that bad experiences caused 22 percent of customers to decrease their spending.
The Challenges of Creating a Successful Customer Experience
Apparently, many companies understand the importance of providing an exemplary customer experience that leads to success. However, if it were easy, everyone would be doing it. There are challenges to making consumers feel that they are the priority.
Is the customer always right? — Employees have to deal with a lot during a workday: deadlines, meetings, and a deluge of emails. Customer service may not always be the first thing on their minds. Leaders have to set the example to create a customer-first culture where workers are encouraged to go the extra mile to satisfy potential buyers. However, if this concept is not a part of the company’s principles, then this shift can be challenging to make.
Understanding the customer — Some companies think the task of getting into the minds of customers is nearly impossible. They have to decipher customer expectations and execute on them. Some companies might think competitors hold the key to what customers are looking for, but the easiest way to collect thoughts on customer expectations is to go directly to the source. Companies have to set up ways to get direct feedback from customers about their perception of the company. Use interactions logged in your customer relationship management (CRM) software or your helpdesk to judge customer sentiment and measure net promoter score.
Finding the right people — Customer experience professionals are still new in the industry. This work goes beyond customer service; it requires employees to routinely walk through how customers experience the products and function of the company. This takes someone with a lot of experience and interest in the field. It can be challenging to find someone with this newer skill set, but hiring customer success and experience professionals can make a difference.
Making every channel customer-first — Companies have to take a customer-first attitude with every channel they use to interact with customers. Emails, phone calls, social media, and in-person interactions all have to operate under the same protocol. It can be challenging to get all the employees who work in these channels on the same page.
Staying consistent — In a large company, it can be hard to keep everyone consistent in how they speak to and deal with customers. Troubling situations can arise at any time, and customers don’t have to follow protocol, so it can be challenging for workers to handle customers in the same way for each contact point. Companies have to work overtime to keep everyone dealing with customers the same way.
Customer Success Best Practices
It is not hard to understand why customer perception has a direct impact on sales. A long string of poor experiences will drive away customers in the long run and significantly increase customer churn. Here are best practices company leaders can use to make sure that does not happen.
- Measure what you hope to change — To truly understand customer expectations, companies need to make a practice of collecting as much data as possible. Customer surveys, response times, referrals, positive (or negative) online reviews, and many other metrics can help companies understand what they need to improve on to turn expectations into success that increases sales.
- Never stop training — Workers can never receive enough professional development about creating a successful customer experience. From training workers on how to properly service customers to working with customer experience managers on how to keep customer retention high, there is always something that employees can learn to use in their efforts to enhance the customer experience.
- Understand the connection between customer success and sales — Do you know how much increased customer success has on your bottom line? If new practices were implemented, was there an increase in sales and by how much? Knowing this can help managers put a real dollar amount on customer experience optimizations.
- Get to know your audience by creating profiles — While you can never get right into the mind of a customer, you can determine a bit about what they are looking for on facts you already know. Are customers from a particular area interacting with your brand in a way others are not? Do you serve a specific age group? These details can help teams put together a profile of who interacts with their brand and the type of expectations they may have.
It is starting to become apparent that customers value a pleasant experience more highly than price. Therefore, companies have to make their expectations a priority to keep them coming back. Their perception can make or break a company’s brand and have a direct impact on sales. Businesses that prepare to create an experience that leads to favorable customer perception will see the effects on their bottom line.