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Is Customer Experience (CX) More Important Than Product?

“Being on par in terms of price and quality only gets you in the game. Service wins the game.” — Tony Alessandra, President of Assessment Business Center

“The customer experience is the next competitive battleground.” — Jerry Gregoire, Chief Information Officer at Dell

“Focusing on customer experience management (CXM) may be the single most important investment a brand can make in today’s competitive business climate.” — Shep Hyken, Customer Service and Experience Expert

As the quotes above illustrate, a broad consensus is building among business leaders regarding the preeminence of CX. And the research backs them up:

  • By 2020, CX will surpass both price and product as the key brand differentiator. (Walker)
  • Today, 89 percent of companies compete primarily on the basis of CX — up from just 36 percent in 2010. (Forbes)
  • 88 percent of customers prefer doing business with a company that offers quality customer service over a company that has the latest and most innovative products. (Harris Interactive)

Consequences of Poor CX

Unfortunately, while business leaders understand the growing importance of CX, they often make false assumptions regarding their success in actually providing it. In fact, eTouchPoint reports that, while 80 percent of companies rate themselves as providing superior CX, only a paltry eight percent of their customers agree.

The consequences of providing poor CX — knowingly or not — can be substantial. According to Win the Customer, 89 percent of consumers are willing to switch to a competitor following a bad CX. Moreover, Michaelson & Associates found that 69 percent of customers who do indeed switch to a competitor did so because of poor CX (whether real or perceived).

Worst of all, customer strategist Esteban Kolsky explains that, although 67 percent of customers later cite bad experiences as a reason for churn, only one out of 26 dissatisfied customers actually complain to the company prior to leaving. Where they will complain, however, is to friends and family or via social media, where the results can be devastating. Just consider the crisis faced by United Airlines “in which $1.4 billion in value was wiped out overnight when a passenger’s experience went viral on social media.”

Benefits of Superior CX

Just as there are significant potential consequences for poor CX, there are huge potential benefits available to companies that provide a superior experience. For example, 73 percent of consumers list CX as a key factor when making a purchase (SuperOffice), and a whopping 86 percent are willing to pay a higher price for a product or service in order to receive a better CX (CloudCherry).

The picture looks even brighter when you consider that 72 percent of consumers who have a positive experience will share it with six or more people (SuperOffice) who more than likely will become customers themselves. In fact, according to Stella Connect, 67 percent of people will make a purchase after seeing a recommendation on social media. It’s no wonder, then, that Mercedes Benz USA President and CEO Steve Cannon claims that “customer experience is the new marketing.”

Perhaps most important of all, the benefits that come from providing superior CX can result in a big boost to a business’s bottom line. As reported by SuperOffice, “The Temkin Group found that companies that earn $1 billion annually can expect to earn, on average, an additional $700 million within three years of investing in CX. For SaaS companies in particular, they can expect to increase revenue by $1 billion.” Cha-ching!

How to Create a Winning CX

It’s clear that CX has become just as important — if not more than — product. But “this doesn’t mean that companies should stop concentrating on high-quality products,” cautions QMinder. “Rather, they should pay more attention to this new battleground and start combining high-quality products with equally high-quality customer experiences.” In order to do so, companies must create a culture of connection and provide a truly seamless experience.

Create a Culture of Connection

In a world where companies must compete on the basis of CX, culture can help them stand out from the crowd. “You’ll never have a product or price advantage again. They can be easily duplicated, but a strong customer service culture can’t be copied,” explains Jerry Fritz, Director of Management Institute, University of Wisconsin, Madison.

The key to a successful CX culture is developing a sense of connection. At its most basic level, this connection must exist between customer support and success agents and the company itself, as agent satisfaction is critical to the overall success of a business. In addition, it’s important to create connection between customer-facing teams and other departments across the organization to ensure that the entire company operates with a customer-centric mindset. Today, “CX is everyone’s job,” emphasizes MarTech Advisor. “From design to development, from marketing to sales, from support to finance — it’s vital that everyone understands what their customers do, how they act, what they buy, engage in, and share.”

The final step is to develop a deep and authentic connection between the business and the customer, which is best accomplished by establishing empathy and shared values. “If your company offers shared values, and consumers see a way to enrich their lives through your brand, rather than just a place to buy merchandise, you’re winning,” writes In The Know. A classic example of this philosophy in action is Apple. As co-founder Steve Jobs said in 1985, “One of the things that made Apple great was that in the early days, we built that company from the heart and that people knew that.”

Provide a Seamless Experience

In addition to creating a culture of connection, the best way for companies to differentiate themselves on the basis of CX is to create a truly seamless experience. “The smallest misstep or source of confusion on the customer end is enough to end the experience altogether,” cautions MarTech Advisor.

In 2019, it’s not enough for companies to have a single phone number for support. Instead, they must be available across every communication channel used by their customers, including phone, text messaging, live chat, email, and social media. Here are some key figures to keep in mind when developing an omnichannel strategy:

  • Aberdeen Group claims that companies with the strongest omnichannel customer engagement strategies retain an average of 89 percent of their customers as compared to 33 percent for companies with weak omnichannel strategies.
  • Accenture found that 89 percent of customers get frustrated because they need to repeat their issues to multiple representatives.
  • According to Kampyle, 87 percent of customers think brands need to put more effort into providing a consistent experience.

Just remember that “customers don’t care if you claim you have omnichannel or multichannel capabilities. They only care that they can connect with you, the way they want to connect with you, and when they want to connect with you,” writes Shep Hyken. “They just want to get their questions answered and their problems resolved.”

Competition Is Everywhere

One final aspect for companies to consider when focusing on CX as a differentiator is that they are no longer competing against only those businesses in the same sector or industry. Instead, the CX competition is literally everywhere.

SDL Chief Marketing Officer Paige O’Neill explains, “Customers are now having experiences when dealing with vendors like Amazon or when they go to Disney, and one thing we’ve been discussing with our customers at SDL is the notion that if you’re a financial services institution you’re not just competing with other financial services institutions, but you’re competing with Amazon and their experience.” All of which ensures that CX will only continue to grow more and more important over time.

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