Good customer experiences are more profitable
Customer experience is playing a significant role in determining where consumers choose to shop and how much they are willing to spend, according to the fifth annual Customer Experience Report from Harris Interactive and RightNow Technologies.
The survey's results showed that an exceptional customer experience creates more loyal customers and that it also has the power to impact a company's top and bottom lines. The report concludes that, by focusing on delivering exceptional customer experiences, businesses have the opportunity to grow their customer base, improve brand loyalty, and increase overall revenues.
Nearly all of the consumers surveyed (85%) said they would be willing to pay more over the standard price of a good or service to ensure a superior customer experience. Of those consumers that said they would pay more for an excellent customer experience:
- 55% would pay 10% or more;
- 27% would pay 15% or more;
- 10% would pay 25% or more.
As a result, it appears that delivering a more positive customer experience can help to increase revenue. For example, in 2009, Cyber Monday alone generated some US$887 million in revenue for US e-retailers. Based on the results of this study, the industry could have generated an additional US$87 million in revenue in only one day, simply by providing better customer experiences.
The results also suggest that a great customer service experience significantly impacts purchasing decisions. For example:
- Nearly all consumers (82%) said they have stopped doing business with an organisation as a result of negative experience and most (75%) do not return;
- 55% of consumers said they became customers of a company based on its reputation for great customer service, and 40% of consumers have switched to a competitive brand simply because of its reputation for exceptional service.
But consumers do not only voice their customer experience preferences with their wallets. They also influence their peers. According to the report, customer advocacy (word of mouth) should also be a key focus because:
- Customer service is still the number one reason consumers recommend an organisation, more than products or price;
- Word of mouth is the number one influence on consumers' purchasing decisions (76%), followed by customer reviews and online feedback at 49%;
- 79% of consumers that have had a negative experience with an organisation told others about it, and 97% chose to share their experience via word of mouth;
- 85% wanted to warn others about the pitfalls of doing business with that company and 66% wanted to discourage others from buying from that company.
Finally, the report revealed the top factors that make most consumers stop doing business with a company, including:
- Rude staff (73%);
- Issues that weren't resolved quickly (55%);
- Unknowledgeable staff (51%).
Companies can therefore improve their overall customer experience by providing more friendly, knowledgeable support, and by resolving issues in a more timely manner.