The Opportunity Cost of Delivering an Average Customer Experience

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People naturally tend to initiate conversations about experiences that are either exceptionally good or really let them down. Unhappy customers tell between 9 and 15 people on average about their poor customer experience–and 13% of unhappy customers will complain to more than 20 people.

But excellent customer experience is pricey, and trying to reach excellence can be a long road. So, what is the best way forward for your company’s CX strategy?

Your company has two options: either invest in exceptional customer service, or invest in the bare minimum to retain customers. The choice to deliver exceptional customer service is obviously the better path to take, but the reasoning behind each option is worth understanding.

Companies that deliver an excellent customer experience retain customers more effectively. Individual customers also spend more with a company when they feel like they’re satisfied.

Is It Enough To Do The Minimum?

It’s not that companies strive to do the bare minimum, sometimes it may be the best choice financially–or so it may seem.

It’s appropriate to invest the minimum in customer experience when your company doesn’t have enough room in the budget to implement a customer experience improvement program.

If you can’t reach excellence that will inspire your customers to bring new business or spend more money, retaining the customers you already have is the only choice.

This is typically the rationale for maintaining only a minimum standard of quality for customer experience.

What’s the upside to doing more? According to an article in the Harvard Business Review, delivering stellar customer experience ultimately generates 33% more revenues than poor customer experience does.

Loyal customers are extremely profitable–one report estimates that US companies could gain $62 billion dollars per year if they delivered a better customer experience.

Doing the minimum for your customers is a holding pattern at best and can result in poor customer experiences.    

While you don’t want customers to complain to friends about their experience, you certainly don’t want to lose out on the benefits loyal and satisfied customers bring to your business.

Going beyond customer expectations is a surefire way of building loyalty. Once customers realize that you’re working hard to impress them, they’ll reward your company in kind.

That’s why building excellent customer experience in your company is the best option.

Excellence Is Best

Excellent customer service is the route to loyal customers and repeat business.

Even if it means committing money upfront, McKinsey’s research shows that effective customer experience improvement programs pay for themselves rapidly.

The driving force behind the high ROI of customer experience improvement programs is easy to explain by looking at successful companies with great customer experience; 75% of Zappos’ sales come from repeat customers.

Happy customers keep coming back and spend more when they do.

The Road To Excellent CX

The path to excellent customer experience may be long, but it’s well worth it!

Customer experience improvement programs need time to work before you see revenue increase and business impact.

In fact, according to a Forrester report, customer experience improvement programs improve revenue in three different modalities depending on the industry.

The three modalities are:

  1. Linear: Improvements in CX lead directly to increased revenues immediately
  2. Logistic: Improvements in CX lead to increased revenues until a certain amount of revenue
  3. Exponential: Improvements in CX lead to very small increases in revenue until a certain point at which revenue skyrockets

For example, if your company is in the retail banking business, improvements in customer experience need to accumulate for a long time before you’ll see increased revenue. But when it does, the impact is significant. Customers of retail banks require a long period of trust building before they’re willing to fully commit.

In short, your company needs to view customer experience as a long-term strategy.

Improving customer experience can be simple to start.

To get started with delivering excellent customer experience, your company can:

  • Personalize service for each customer by instructing your support team to use the customer’s name and be sensitive to their needs and let them know they are being listened to
  • Under promise and over-deliver so that exceeding expectations is the norm
  • Train your support team to be consistent with each other so customers don’t get conflicting information
  • Rectify serious customer issues immediately and follow-up to repair the damaged customer relationship

Once your customer experience has incorporated the basics, your company can move on to more complex solutions like customer rewards programs and building a dialogue with customers even if they don’t need customer service. Building a dialogue with customers forges strong and long-term relationships.

If you’re not sure how to start improving your customer experience, there are a number of customer service metrics you may want to look into.

Invest in customer experience excellence today, so your business can reap the benefits for the long term!