26 Jun

The hidden costs of poor Customer Experience

IVC team | Business Development

Do you remember the last time you had an unpleasant customer experience with a service or product?
I do.
When it happened to me, I felt disappointed, betrayed and angry because – after charging me for the service – no one paid attention to my problem and the customer service was always unreachable.

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It occurred to me that the only manner I had to vent my frustrations with the company was to post on my social networks to inform my friends and colleagues of what had happened.

This marked the beginning of viral marketing actions among my connections, which forced the company to come back to me and help me solve my problem in a 3.0 unconventional way.

What’s Customer Experience?

Customer Experience (CX) is defined as customers’ perceptions – both conscious and subconscious – of their relationship with your brand, resulting from all their interactions with it during their customer life cycle.

How important is CX?

More than you can imagine. Companies who successfully implement a CX strategy achieve higher customer satisfaction rates, reduce customer churn, increase revenues and employee satisfaction.

- In this curious case, you can see how Nordstrom's (the great American luxury brand) takes its Customer Experience seriously.

Furthermore, research done by American Express found out that 60% of customers are willing to pay more for a better experience.

And what if you don’t deliver a great CX?

Bad customer service is more expensive than you think.    

Companies’ online reputations are quickly becoming a significant factor in generating new business as more and more customers begin to check online posts of others’ opinions about their experience before making any buying decision.

If you have an unhappy or upset customer, it’s your responsibility to find out why they felt this way and use that information to improve your service.

Several investigations show that bad customer service interactions are more likely to be shared than good ones.

On social media, sharing a story where you’ve been wronged or cheated often leads to a surge of support from all your friends and followers.

Stories with happy endings also get their fair share on the media, but they lack the same impact and end up being forgotten faster.

"It seems like Customer Experience is more important than
the product itself!"

Negative word of mouth can seriously damage the reputation of a business as it can spread like wildfire. In addition to this, a bad image of the company increases sensitivity to price and can sabotage any second chance.

Marketing researchers also discovered that it takes 12 positive experiences to repair the damage caused by a single unresolved negative one: people are unlikely to forget a bad customer experience.

- Do not miss the way Zappos (a Las vegas online shoes and clothing store) increased its customer loyalty and improved its online sales by solving this problem running against time.

The 2016 Digital Marketing Trends Report asked companies to indicate the most exciting opportunity for their organization in 2016 – and for the third year in a row Customer Experience is on top.

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The concept itself may sound idealistic but it has become a critical differentiator in today’s hyper-competitive and hyper-connected global marketplace. There’s tangible business value in managing CX effectively.

 

Fix a poor CX with CEM

Customer Experience Management (CEM) strategies can directly improve companies' bottom lines by increasing customer acquisition, retention, growth and win-back.

  • Map the environment and care for customers. Know them, listen to them, respect them, gain their confidence and make them repeat the experience. It costs much more time to acquire a new customer than retain an existing one.

  • Set the strategy and think long term. Consolidating data into a single view of the customer across interactions, channels, products and time will help facilitate future services and communications.

  • Create excellent brand experiences across touch-points and channels.Personalize all interactions and ask for feedback: it will help you improve your product/service and this will turn into higher revenues.

  • Make Customers happy descarga.jpg
Remember that sometimes it's the little things that matter.

At Disney, even theme-park cleaners - who do not have extensive customer contact - get three days of training in "interpersonal skills" to ensure that any visitor asking a question receives a correct and friendly answer.

Starbucks is another good example: the company aims to differentiate by offering highly personalized services – they always ask for your name to deliver your order personally!

And TD Bank made this campaign giving very special moments to its customers to say them "thank you". Thank to this, they reached a huge online presence, #hashtags and a strong positioning into the market.

 

 

In conclusion, power has shifted from businesses to consumers as every business relies on repeating customers and sales and on the positive feedback provided by existing clients.

The market is full of great products. To compete with another company when you both have outstanding products, it’s not about product or price advantage anymore as they can be easily duplicated. Definitely, it’s all about the CX you deliver; a strong CX culture cannot be copied!

Put it simply: happy customers remain loyal and recommend you to others.

It makes sense, right?


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