In our first post of the series, we spoke about what customer experience means, and how it is defined by businesses across the board, irrespective of the industry they belong to. But, if you, like many have wondered why the sudden emphasis on customer experience, then I urge you to read on. After all companies both big and small have been doing business for centuries right? So why the sudden need to woo the customer – to delight him or in some cases even ‘wow’ him? There are a few valid reasons to do this today – chief among them being ‘To drive customer loyalty.’ We live in times of “blink and you miss it” information driven world. Today every minute there is millions of terabytes of data being searched, shared and exchanged.
In such a setting, a loyal customer can reap in rich dividends for any business and create that much needed multiplier effect in a highly competitive market. In fact a Harvard Business School report showcased that on an average, increasing customer retention rates by 5% increases profits by 25%-95%. There is no doubt clinching a loyal customer has evolved to become a key competitive benchmark. It can be the difference between success and failure for any business.
And here’s why:
Social power: The steady rise of social media, online services, location-based services and connected devices has led to a tectonic shift in the way businesses function. While earlier businesses thrived in the age of manufacturing and distribution and even morphed to a large extent with the advent of the information age, today, they are squarely placed in the age of “customer experience”. Each post, tweet and like on the multiple social platforms are indicators of a customer’s experience with their brand and will likely influence their future buying decisions.
Information is wealth: Access to the internet has made gathering information easier than ever for customers and businesses alike. It has made services accessible and competitive landscapes flatter. However, as we traverse through the new age of customer experience, customers are not only users of information, but they are the ones also driving it. Therefore it is necessary for brands to have customers who are loyal and can act as powerful ambassadors for them, lending more credibility and faith.
Power of one: The balance of power has shifted. Today, brands that engage with their customer and have to be more intuitive, have to be mobile first and have to focus heavily on their digital presence. Consider this, a recent Deloitte study on changing customer behaviour sites that 84 percent of digital shoppers reach for devices before or during store visits. Even in the B2B scenario, customers rely heavily on word of mouth and referral value that a brand has. One bad customer review on social networks or online forums is all it takes to severely damage the reputation of a large brand.
Cost comfort: It has been well researched that a loyal customer is not only likely to be a repeat customer but more often than not is likely to spend more as time goes on, paying a premium to interact with your brand, fulfilling every marketer’s dream. And guess what its far cheaper to retain a customer than it is to acquire one!
As management guru Peter Drucker said: “The single most important thing to remember about any enterprise, is that there are no results inside its walls. The result of a business is a satisfied customer. “And their experience with your brand is the final word. So show your customers the love if you want to win over their ‘precious’ loyalty!
Blogger: Tanmay Parmekar