Posted: 18 Jan 2019 Contributor: Matthew J Fritschle
How Customer Experience Is a Powerful Differentiator
Pick a company, any company, and you’ll come across the same fact: customers are their lifeblood. No matter their industry or size, every company depends on customers to run, and in many cases, the size of their customer base has a direct influence on whether they survive another year, or even another month. In other words, customers are a company’s most important asset.
Along this line of thinking, as the most important asset a company has, their priority should be to tailor a strategy—a customer experience strategy—that ensures their customers always have positive experiences. Keep in mind that good customer service is different than good customer experience. For instance, take a look at the following customer experience example that highlight the difference:
- You want to book a flight from LA to Taiwan for your honeymoon, so you call an airline and speak with a representative to make a reservation. You mention why you’re planning the trip, the representative congratulates you and is very friendly and helpful throughout the rest of the call. That’s good customer service. Fast forward to the day of your flight, and you get called to the front desk as you wait to board the plane. Lo and behold, the attendants congratulate you on your recent nuptials and reveal that your tickets have been upgraded and that you’re allowed to board early. That’s a good customer experience.
As you can see from the examples above, customer experience encompasses the entire experience a user or buyer undergoes with a brand. It includes every touchpoint from beginning to end, and colors the perception of how they will be treated in future interactions. This, in turn, will affect their loyalty and how they behave toward them, i.e. whether they become repeat customers. To put it simply, if they have a good customer experience with a brand, they will like them and continue to give them their business, and may even recommend them to others.
With that in mind, let’s get to the crux of the matter: five points why customer experience is a powerful differentiator between you and your competitors, and why you need to start thinking of innovative ideas to improve customer experience.
1. Customer Expectations Have Changed
To know how to improve customer experience and why it’s a powerful differentiator, you have to understand that customer expectations have changed profoundly throughout the years; what was expected back then is not the same as what is expected today. That is to say, with the proliferation of technology and devices, old ways of engaging are failing, customers are expecting more today and are not as willing to let things slide.
As a matter of fact, Jeff Bezos, Amazon’s CEO, made this point in a letter to shareholders last year and explained that digital customers can be fickle and hard to satisfy. For example, research from Cloud IQ indicates that speed and ease are the two factors of the eCommerce experience that are valued the most by shoppers. Additionally, 47% of online shoppers in the US, UK and Australia deemed speed “critical” to a great online experience, with another 47% saying it’s “important.”
When you put things together, you reach the conclusion that it’s getting increasingly difficult to keep up with changing trends, which is necessary to deliver great customer experiences.
Read More About: 5 Proven Tips to Use Machine Learning to Improve Business Efficiency
2. Technological Advancements Are Leading the Change
As we saw in the point above, technological advancements are changing the way consumers believe brands should treat them. Case in point, the emergence of the smartphone and the increased demand for speed. In a similar fashion, other advancements like those made by AI are also changing what consumers expect from brands in terms of their experiences. For example, including a chatbot in digital marketing has led many to expect a friendly chat bubble to pop up as soon as they land on a website, and shopping with Amazon has led many more to expect personalized recommendations wherever they shop.
3. Customers Will Remember the Experience They Have Much Longer Than the Price They Paid
Unlike the past, when consumers based their loyalty on the prices they paid for products, what is pushing them today toward one brand or away another is the experiences they encounter. After all, even though they can get a product or service anywhere, what’s creating the key differentiator is their experience with either. That is to say that consumers aren’t satisfied with a transactional relationship anymore; they want a positive experience with the brands they choose to interact with, and the brands they choose to give their loyalty to.
Read More About: From Typing to Talking: How Voice Is Becoming the New Keyboard
4. An Experience with a Brand Can Make or Break a Purchasing Decision
Not only do 73% of buyers say customer experience is an important factor in purchasing decisions, but 65% of people in the US also feel that a positive experience with a brand is more influential than great advertising. To know why an experience with a brand can make or break a current (or future) purchasing decision, you have to think of the entire experience you usually encounter when buying a product of service. For example, think back on the example we covered in the beginning in which you flew from LA to Taiwan for your honeymoon. In that example, the service you paid for was the flight, but the experience was the entire process, from when you talked to the representative to when you arrived in Taiwan.
Now consider an opposite scenario with a competitor airline; one in which you encountered a rude representative and many unpleasantries on your flight. Would you choose to go to the first or the latter? If you’re like most, you’ll choose the one that delivered a good customer experience.
5. Customers Will Pay More for a Great Experience
Consider the fact that 86% of buyers are willing to pay more for a great customer experience. Similarly, consider that, on average, customers are willing to pay a price premium of up to 13% for luxury and indulgence services, simply by receiving a great customer experience:
- 16% premium for coffee
- 14% premium for a hotel stay
- 12% premium for dinner
- 10% premium for an airline ticket
As you can see, customers are willing to pay more for great experiences; if you not only satisfy their expectations, but also go above and beyond, they will reward you with more money — simple as that.
So, what makes a great customer experience? For one, understanding that customer expectations have changed, and that technological advancements are leading that change. Likewise, realizing that customers will remember the experience they have with a brand much longer than the price they paid through that interaction, which leads to the conclusion that an experience with a brand can make or break a purchasing decision, and that customers will even pay more for a great experience.
Knowing that, it’s up to you to come up with awesome ideas to improve customer experience.