Good Customer Experience Leads to Profitability

Posted on by Dana VanDen Heuvel

Customer Service 300x212 Good Customer Experience Leads to Profitability  Advanced business concepts and technologies like social media and CRM have helped many organizations to deputize and empower their front line employees to have the potential for delivering an exceptional customer experience, yet as anyone reading this article can attest to, the good customer experiences across even a single organization are represented by the William Gibson quote: “The future is already here – it’s just not very evenly distributed.”  Good experiences exist, but your organization to excel, the customer experience needs to be exceptional and evenly distributed.

Customers buy more and choose good customer service experiences over low prices.

Of course, everyone likes a good deal, but in study after study, consumers value the customer experience and customer service over low prices over the long term. We often read that consumers ‘love to hate’ certain large retailers. They’ll shop there, but only sometimes and only for certain items where customer service doesn’t matter, while seeking out better customer service for other, more critical purchases. You rarely hear anyone bragging about the cheapest plumber, cleaning person, haircut or any other category where service and experience matters.

Good customer experiences drive positive word of mouth and customer loyalty.

The old saw that says that satisfied customers tell three friends and dissatisfied customers tell 20 is no longer true. Both customers can, will and do tell hundreds through a multitude of social networks every day.  With six in ten consumers indicating that they follow at least one brand via a social network like Facebook or Twitter, it’s easy to see how telling 20 can turn into telling 200 faster than the flash of a mobile phone camera.

Companies with good customer experiences are more profitable.

When you compare customer experience leader companies vs. customer experience laggard companies against Forrester Research’s 2007 Customer Experience Index study, from 2007 through 2009, through the best and worst of times, the customer experience Leader portfolio generated cumulative total returns that were 41% better than the S&P 500 Index and 145% better than the customer experience Laggard portfolio. Those are some astonishing numbers and present a solid case for improving your overall customer experience.

We started this article by discussing technology advancements as a vehicle for improving the customer experience and there’s no doubt that technological advancements play a significant role in improving the customer experience, but they’re far from the end of the story.

Companies that successfully bring great, end-to-end customer experiences to the marketplace do so from a recipe that includes a supportive culture, operational excellence, attention to detail and simple and straightforward human conversation. They equip their staff to be genuinely helpful and only then do they deploy technology such as social media and CRM to support the initiative.

While this is not an overnight success story, the sum of these parts pays off in the end, even if the precise impact of individual components may seem unclear until the entire puzzle is complete.

 

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