Little is known about who coined the phrase, “the customer is always right,” but a number of sources attribute these words of wisdom to Harry Gordon Selfridge, the founder of ubiquitous British brand, Selfridges, and Marshall Field, the founder of Chicago’s Marshall Field and Company. Both of these business men, who went on to build multi-billion dollar empires, based their business models on serving the needs of the customer. It was an adage that rose to prominence during the 1950s, but centuries later, it still holds true.
With the advent of social media, the rapid advancement of digital technology and the mushrooming of business opportunities that has been catalysed by the Fourth Industrial Revolution, more power has been placed in the hands of the customer than ever before. In previous years, where a number of large corporates held monopolies in a broad range of sectors, the small business and start-up boom of the “noughties” has exponentially expanded the range of choice that consumers have.
Just consider for a moment, how many variations of tomato sauce you’ll find in grocery stores across the UK. Heinz tomato sauce was a UK favourite for years before the introduction of own-branded tomato sauce variants by several UK supermarkets, in addition to around 20 other variants from emerging brands. The “tomato sauce case study” represents a microcosm of the bigger picture that is customer choice in the contemporary world.
With so much choice, brands face fierce competition for the attention of their target audiences. And for retailers, it has become ever more important to nurture an aspect of differentiation – something that sets them apart from other competitors in the market and positions their unique value proposition foremost in the minds of consumers.
One of the most effective ways of achieving this objective is to focus on providing an excellent customer experience (CX). This involves aspects such as how the customer interacts with your brand’s representatives, how customers feel about your product or service and whether it meets their needs.
For businesses across the board, investing in customer experience can reap a number of benefits, which include the following:
Many businesses focus almost exclusively on converting leads into sales or acquiring new customers. While this is of course a priority in a business’s formative years, as that venture grows, customer retention becomes increasingly important. The rate at which your business is able to retain customers and build a loyal customer base will play a pivotal role in whether your venture will survive in the long term.
Customer retention is not only beneficial to a business’s bottom-line in a direct way, but it also has an important indirect impact. Findings by several sources provide some compelling insights that illustrate this point. According to SmallBizGenius, Over 60% of a company’s business comes from repeat customers. Furthermore, as Invesp suggests, the probability of selling to an existing customer is 60%-70%, compared to the probability of selling to a new customer, which is only 5%. In addition, retaining a customer can be up to 25 times cheaper than customer acquisition.
Some of the most successful customer retention strategies include loyalty programmes, customer feedback systems, customer reward programmes and customer education. Business owners who can find innovative ways to weave these types of strategies into their customer experience will go a long way in encouraging repeat sales and ultimately, building a community around their product or service. This will in turn have long-standing and far-reaching benefits for profitability and brand reputation.
One of the most important metrics that marketers use to assess the success of businesses is sentiment analysis. Using advanced algorithms, a number of online tools can measure how customers feel about a particular brand, product or service by measuring digital interactions on platforms such as review sites and social media as well as brand mentions in the media.
According to Oracle, 34% of customers will never buy from a brand after just one bad experience. And as Adobe found, 1 in 3 customers will pay more for a better experience. A number of additional sources support the argument that there is therefore a powerful business case to be made for investing in positive customer experiences.
Taking a CX-centric approach to business ultimately helps businesses understand their customers better. In doing so, companies can adapt and iterate in ways that serve the needs of their audience better as their business grows. A large component of what investing in CX means, involves collecting and analysing customer data by means of surveys, questionnaires and digital data collection points garnered from marketing tools like social media and email marketing.
Ultimately, data takes the guesswork out of marketing and avoids business owners from applying the “spray-and-pray” method of marketing that involves spending money on advertising across a number of different platforms and simply hoping for the best.
With data, business owners can gain access to information about their customers’ spending habits, their behaviour around shopping and their attitudes towards certain brands and businesses. This data can be used to inform which marketing channels will be most effective, how messaging should be crafted, how marketing budget should be spent and most importantly, the return on these investments.
In the long run, this will ensure that businesses apply a more targeted approach to marketing and optimise their budget by wasting less money on ineffective strategies and tactics. And in an age where customers have come to accept a larger degree of personalisation than ever before, using data to inform your decisions as a business, can be a key enabler of long-term growth.
Have you found that customer experience has become more important to your bottom-line as a business? Connect with us on social media and share your opinions and insights.
Customer Experience Edtech Limited is registered in
England & Wales. Registered Number 13111219
MM UK
