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Customer Experience Is the New Black

The Key to Revenue Generation in the 21st Century

Your customers are at risk. A recent White House Office of Consumer Affairs study stated that three out of five consumers are willing to try a new brand or company for a better service experience. Today’s customers are not willing to stay satisfied in the same way as just a few years ago. They are more fluent in search technologies and come to each customer experience more informed with more strongly held expectations for the buying process and outcome.

Most organizations are slow to acknowledge and adapt to the new “black”—and customers are not waiting around for organizations to catch up. Customers are forming their own value expectations independent of the outdated, one-size-fits-all value propositions of lagging organizations. More and more customers are forming expectations that increasingly reflect their desire for a better total customer experience. If organizations are not willing to do something about it, their customers are not only at risk, they are gone.

A Satisfied Customer Is Not a Loyal Customer

A recent study by Lee Research compared organizations’ customer satisfaction scores with direct customer interviews. Only 8% of customers claimed they were strongly satisfied with their experience, and these were customers of organizations that claim 80% of their customers are strongly satisfied!

Wilson Learning’s own research shows that almost 80% of an organization’s customer base falls into a Zone of Indifference.

We have found that customers who fall into the zone:

  •  Are no more likely to buy again than a dissatisfied customer
  •  Tend not to express their dissatisfaction, meaning there is not an opportunity for recovery
  •  Are relatively easy for a competitor to steal away with minimal effort
  •  Are not a positive source of references and referrals

Bottom line, if 80% of customers are neither loyal nor dissatisfied, there is a greater risk of customer defection from the largest segment of your customer population.

. . . 62% of global consumers switched service providers due to poor customer service experiences . . .

— Accenture Global Consumer Pulse Survey

The Advantage of a Deeply Engaged Customer Experience

The good news is that huge opportunities are available when you lead your organization toward a new, more deeply engaged relationship with each customer’s total experience. There exists an opportunity to build powerful loyalty in your existing customer base and to win indifferent customers away from your competitors.

Time and again, research shows the development of a branded customer experience not only provides differentiation against “me too” competitors but also leads to a higher, more personalized level of customer engagement. A branded customer experience leads to sharply increased revenue as loyal customers spend more, more frequently, and at higher margins than indifferent customers. This kind of customer experience provides a powerful source for stronger referrals to help grow and retain new customers. It should be noted that customers who hold a perception of greater total value because of a fully branded customer experience are more tolerant of mistakes and are more patient and confident the organization will recover and repair the mistake.

Reducing your customer defection rate by 5% can increase your profitability by 25–125%.

— Leading on the Edge of Chaos

Trust Is the Primary Source of Customer Loyalty

Wilson Learning’s proprietary research on customer behavior points to one element that is common to all customers with strongly held loyalty: Trust. To restate this concept . . . customers who demonstrate strong customer loyalty trust the brand, the product, or service they are engaged with, and they trust the customer experience. This determination that they trust an organization has both rational and emotional components. Too many times organizations deploy customer experience strategies that fail to address the emotional aspect of trust. They may invest in tangible operational capabilities that improve product or service performance, but neglect to address the crucial emotional components that arise from “how customers feel they are being treated.”

70% of the buying experience is based on how the customer ‘feels they are being treated.’

— McKinsey & Company

As they interact with an organization at every touch-point in the customer experience, each customer forms a complex emotional and logical mix of impressions, reasons, anecdotes, judgments, and opinions. For organizations to develop a branded customer experience, customers must feel a strong emotional connection to the brand that engages them in a long-lasting, trust-based relationship.

Credibility is the customer’s logical assessment of an organization’s capability and reliability for delivering what is needed. Empathy is the emotional connection that enables associates to establish a high level of rapport with customers by understanding the emotional component of their business and/or personal needs.

Throughout the course of the entire customer experience, customers are forming and re-forming their assessment of trust in an organization’s brand. Customer trust is being replenished or depleted at each touch-point in the total customer experience. Wilson Learning’s research shows that customer perceptions of credibility are determined by four concepts.

  • Propriety: Expectations of business customs and the ability and willingness to meet the customer’s behaviors.
  • Competence: The perception you create in the customer’s mind that you have the capability and experience to help solve the business problem.
  • Commonality: The customer’s perception that you both hold things in common—interests, beliefs, and values.
  • Intent: An open declaration of your interest in the customer’s success and well-being.
According to a CEI Survey, 86% of buyers will pay more for a better customer experience, but only 1% of customers feel that vendors consistently meet their expectations.

— Forbes