Still need convincing about the merits of refining your customer experience (CX) strategy? Or need some help persuading those around you that implementing a strong CX strategy will provide significant returns on investment? A compilation of the latest industry research, this handy guide will tell you everything you need to know to become a customer experience leader and unlock the secrets to business growth your rivals would prefer you didn't know.
Not long ago the products and services an organisation offered, and the price they sold them at, were the most important factors for customers in deciding which organisation to interact with.
However, as markets have become more commoditised and customers are increasingly perceiving less difference between organisations, organisations are looking towards offering outstanding customer experiences as a way to stand apart from their competitors.
How your customers perceive you drives their behaviours; whether they are loyal to you, whether they recommend you to others, or whether they decide to look elsewhere. In this article, we identify the key customer experience statistics market leaders are already using to grow their businesses.
Customer experience is the new battlefield
According to 2017 Dimension Data Global Customer Experience Benchmarking Report, organisations now value CX as the most important strategic performance measurement and 81% now recognise CX as a competitive differentiator.
This can bring with it substantial financial reward. McKinsey suggest that companies offering exceptional customer experiences can exceed the gross margins of their competitors by 26%, while also having the additional benefits of making their employees happier and simplifying their end-to-end operations.
Research conducted by IBM also found that the top 20% CX leaders in the utilities and energy sectors exhibited;
- 51% greater customer retention rates
- 44% greater YoY change in annual company revenue
- 23% greater YoY change in average company provide margins
Despite the clear benefits of improved CX, only 7% of brands are exceeding customer expectations and 25% of brands are failing to meet them. The costs of this failure can be high. In the US, the estimated cost of customers switching due to poor service is a staggering $1.6 trillion.
Organisations are responding and the development of new channels is in part a response to growing consumer expectations. CX is also driving growth in contact centres, with 88% of contact centre executives citing customer experience and expectations as the main reason for expansion.
Customer expectations are growing
The likes of Amazon and Apple have transformed customer expectations across sectors. Customers have become accustomed to instant support with 75% of digital customers expecting a service within 5 minutes of making contact online.
According to Accenture, 73% of customers expect customer service across all channels to be easier and more convenient, and 61% expect it to be faster.
Organisations can’t afford to fail to meet customer expectations. McKinsey estimate that 25% of customers defect after one bad experience alone. This has long-term implications since 60% of the time, a customer who leaves an organisation will never go back.
How staff interact with customers plays a significant role in the customer journey. The January 2016 UK Consumer Satisfaction Index found customers ranked the ‘competence of staff’ and ‘staff doing what they say they will do’ as their highest priorities, above ‘product reliability’. Indeed in a Deloitte survey 62% of complaints were about staff attitudes and competences, compared to just 34% about the quality of reliability of goods and services.
Customers also expect organisations to tailor their services to them. Research by IBM has found that 54% of customers would consider ending their relationship with a provider if they are not given personalised content and offers. McKinsey support this finding, with 61% of customers also reporting they are more likely to buy from companies delivering custom content.
Customer behaviour is changing
The inception of digital self-serve channels has changed the way customers interact with organisations. 70% are now happy to carry out simple day-to-day tasks like checking a bank balance or paying a bill online.
However, when issues become more complex, a different trend emerges. 73% of customers will chose a human over a digital capability when seeking advice or looking to resolve a service issue or complaint. It is perhaps for this reason that the role of the contact centre is evolving to serve more complex journeys, with 85% of contact centre executives reporting an increase in the complexity of agent-customer interactions.
Omni is the new Multi
Customers don’t just use one channel for their customer journeys. In fact, Deloitte have found that more than 60% of customers interact through multiple channels and irrespective of time, place, device or medium, they expect consistency. However, 40% of brands agree that their customer experience is inconsistent across different channels.
99% of brands believe integrating cross-channel experiences is valuable, but only 45% are doing it. Siloes often prevent customer centricity permeating throughout an organisation. In fact, 55% of organisations operate with siloes in place.
Organisations that can integrate different channels to create a seamless journey will reap the benefits. On average, companies with an omni-channel programme see 25% greater annual growth in revenue. In banking, customers that use multiple-channels as part of a singular journey purchase 1.4 times the products than digital only customers and because these products also tend to be of higher value, this can have a significant impact on a companies margins.
Implementing omni-channel functionality is particularly important in the case of a customer service problem. 75% of customers expect to pick right up where they left off, without having to re-enter information or re-inform a customer service rep, when reporting an issue. This applies across channels and customers want to be able to migrate from one channel to another without losing the progress they have already made, and become frustrated if they have to start again.
Customer frustration will lead to churn
Organisations need to make sure it is their customers, rather than internal processes or legacy systems, that dictate customer journeys. 83% of consumers complain that it is ‘frustrating’ or ‘extremely frustrating’ dealing with organisations who not make it easy to do business with them.
Customers want to spend minimal time interacting with an organisation. However, it’s not just about the speed in which you can finish an interaction, but rather it’s the time in which you can help a customer achieve their purpose. Offering first time resolutions is particularly important in today’s market and one survey has found that customer satisfaction falls by 15% each time a customer has a make a repeat call regarding the same issue. Nevertheless, it is estimated that between 25-30% of calls stem from problems that were not solved first time.
There is room for improvement in traditional channels. Despite 1/3 of customers citing telephony as their preferred channel for customer service, 48% of customers find it the most frustrating. There is room to bring technology into the contact centre environment to improve customer-agent interactions, for example voice biometrics can reduce the time spent verifying a customer’s identity by between 30-45 seconds.
Not all customers want to be digital
Although digital transformation is dominating the discussion surrounding CX, it might be surprising to hear that only 13% of customers are pure digital customers and only 36% of customers believe digital channels are better than non-digital forms of interaction.
It is important that organisations do not abandon traditional channels. On average, 23% of customers will fail a digital journey and try to rectify their problem through a more traditional channel.
Traditional customers may be the most valuable
Customers were 57% more likely to do nothing after a positive digital experience versus an in-person visit. Digitally sophisticated customers are also more likely to switch to providers providing a better experience or lower price than traditional customers and so the lifetime value of traditional customers may still be greater, even though the cost of serving them may be higher.
As customer experience moves to be a key point of differentiation, it is vital that organisations mould their CX strategy around what works for customers. Organisations that successfully achieve this will see the benefits on their bottom line, boost loyalty and reduce churn.
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