Customer experience (CX) has been a hot topic for a number of years now, with global brands like Airbnb and Apple setting the standard (and expectations) for what customer experience should look like.
As a result, CX – or ‘how customers perceive their interactions with your company’, as Forrester defines it – has become a primary focus for businesses.
But, what exactly are the benefits of CX? Here are some interesting and inspiring statistics detailing why it is so important.
Find out more with Econsultancy reports:
Customers desire (and demand) better experiences
Due to the rise of seamless, on-demand services delivered by the likes of Deliveroo and Uber – consumers have become used to interacting with brands in a certain way.
Gladly’s ‘Customer Expectations 2019′ report found that consistency is key to a good CX, with 62% of consumers in a survey saying it’s very important to not have to repeat previous interactions. In fact, this is valued higher than being able to use their preferred channel.
Similarly, research from Salesforce tells us that 75% of people now expect a consistent experience wherever they engage with brands – be it through social media, mobile, or even in person. Immediacy is also in demand, with 64% of consumers expecting companies to interact with them without delay.
Younger generations are said to have the highest expectations of all. Forrester’s ‘Raising the Bar’ report, in association with American Express, suggests that Generation Z expects brands to deliver tech-savvy experiences that are instantaneous, highly personalised, secure and entertaining. And while Generation Y might also share these expectations, Gen Z are more likely to abandon brands when they aren’t satisfied.
The benefits of CX
So, it’s clear that CX is now an expectation for consumers – but what are the benefits for brands?
According to the Temkin Group (now part of Qualtrics), a moderate increase in customer experience generates an average revenue increase of $823 million over three years for a company with $1 billion in annual revenues.
In a July 2019 article, McKinsey leaders proposed that businesses often have to rethink their business model in order to go through a true customer-centric transformation (and for it to be sustainable). But if this fundamental shift in mindset occurs – along with IT and operational improvements – McKinsey suggests that businesses can generate a “20 to 30% uplift in customer satisfaction, a 10 to 20% improvement in employee satisfaction, and economic gains ranging from 20 to 50% of the cost base addressed in the various journeys.” This is based on McKinsey’s ‘A, B, C – The building blocks of a customer experience transformation’ model.
Similarly, Qualtrics’ ‘ROI of CX’ report from 2018 states that the correlation between CX and repurchasing is very high (Pearson correlation = 0.82). It also found that there is a 21-point difference in Net Promoter Score between consumers who’ve had a very good experience with a company and those who’ve had a very poor experience.
In turn, customers display loyalty. In a study of 10,000 US consumers, Tempkin Group found that 86% of those who received a great customer experience were likely to repurchase from the same company. This is compared to just 13% of those who received a poor CX.
Tempkin also found a similar correlation between CX and trust, as well as consumers’ willingness to recommend a brand.
Mobile matters
While CX is important across all channels, consumers’ attentions are increasingly turning to mobile.
This channels is particularly important to Generation Z. According to PwC’s 2018 CX report, 63% of Gen Z (compared to 54% of the general population) think mobile experiences matter. Nearly 70% of consumers overall value easy mobile experiences.
Econsultancy’s CX Best Practice guide backs up the demand for mobile strategy, with research showing that 50% of executives now recognise that mobile has a key role to play in defining CX. Once again, however, more needs to be done to meet consumer expectations, with only 6% of organisations currently regarding themselves as ‘very advanced’ in mobile CX.
Uptake and investment
Despite recognising the importance of CX, it appears some brands are still lacking a coherent strategy or failing to succeed.
Econsultancy’s Digital Trends 2019 report highlights how only one in ten organisations see themselves as ‘very advanced’ in respect of customer experience – just a two-percentage-point increase since 2015. 52% of companies still categorise themselves as either being ‘not very advanced’, and 44% see themselves as ‘immature’
As CX is now an expectation for consumers, PwC’s report suggests that a bad customer experience can have disastrous results for brands. When asked the question: “at what point would you stop interacting with a company that you love shopping or using?” – 59% of US customers said they will walk away after several bad experiences, while 17% said just one bad experience.
Globally, 32% of all customers would stop doing business with a brand they loved after one bad experience.
As well as impacting an individual’s future interactions with a brand, a negative customer experience could also impact others. According to Hubspot’s ‘State of customer service in 2019’ report – based on a survey of over 1,000 customer service agents and leaders in the US, UK, Canada, and Australia – “customers have a bigger, stronger voice than ever”.
Its survey found that 89% of customer service professionals agree that customers are more likely to share positive or negative experiences now than in the past. Furthermore, 88% agree that customers have higher expectations than in the past, and 76% agree that customers are smarter and more informed now than they were previously.
Companies are yet to reach CX maturity
Only 6% of companies have reached the two highest levels of CX maturity, while 79% remain in the lowest two stages. This is according to ‘The State of Customer Experience Management 2019’ report by Qualitrics XM Institute, which stems from a survey of 212 large companies with at least $500 million in annual revenues.
When it comes to the reasons why, 59% of respondents identify other competing priorities as a significant obstacle to their CX efforts.
More positively, the report found that most companies have centralised CX leadership; 65% of respondents report having a senior executive in charge of CX across products and channels, and 69% have a centralised CX group. More than two-thirds of the companies surveyed have had these corporate elements in place for 12 months or more.
A positive CX relies on human interactions
PwC also explores what makes or breaks a good CX. It concludes that – despite the prevalence of automation – the majority of US consumers still prefer human interaction. PwC’s study found that 64% of US consumers and 59% of all consumers feel that companies have lost touch with the human element of customer experience. Overall, 71% of Americans would rather interact with a human than a chatbot or some other automated process.
InMoment’s 2019 CX Trends report mirrors this need for human interaction. In a survey of 1,000 US consumers and 300 brands, it found that 42% of consumers cited ‘better service from staff’ as the most important thing brands can do to improve their experiences.
Self-service and digital ecommerce interactions are increasing
Despite the demand for human interactions, Gartner suggests that organisations are steadily moving away from face-to-face or voice-based interactions.
In fact, it predicts that by 2022, two-thirds of all customer experience projects will make use of IT, up from 50% in 2017. It states: “those not using technology tend to be projects related to recruiting, training, governing and managing customer-facing employees.”
CX becoming a priority within US healthcare
Finally, there are certain industries (such as technology and retail), where customer data is an integral part of business strategy. In others, such as the US healthcare industry, strides still need to be made. Fortunately, PwC’s ‘New Health Economy’ report suggests that US health leaders are making building a better customer experience for patients a top priority.
In fact, 49% of provider executives say customer experience is a top strategic priority over the next five years. Even more promising is the fact that 81% of payer executives say their company is investing in technology to improve member experience.
The report also suggests that digital technologies to enable convenience and cost-effectiveness will see greater investment. 91% of pharmaceutical and life sciences executives surveyed said that patients will increasingly manage their health at home over the next 10 years (through pharma patient engagement services such as drug adherence programs and health management apps).
