A customer's overall experience with a brand -- positive or negative -- is a major contributor to both long-term loyalty and sales.
In many ways, the experience a customer has with a business is even more important than overall perceived value of the product or service they're paying for. Customer experience (CX) is technically separate from the actual investment of the product or service, but customers usually bundle both together when forming an overall opinion on their purchase.
Here are six ways that exceptional customer experience translates to increased sales:
1. Customer retention is more profitable than generating new customers
Most businesses understand that it's better to keep an existing customer as opposed to finding a new one. Multiple studies, including a recent one from Bain & Company, show that a 5% increase in customer retention produces more than a 25% increase in profit. The reason for this increase is simple; existing customers tend to spend considerably more when they are happy with their entire investment experience.
Building relationships with new customers takes considerable time for loyalty emotions to build. That's why so many CX management technologies available today -- including CRM systems, productivity and omnichannel tools -- focus on customer retention. These tools provide the fastest route to increased profits.
2. Customer feedback enables businesses to make necessary changes
CX platforms are designed to gather as much information about a customer's experience along every step of the customer journey, and it's important to gather that information early and often.
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Businesses can gather data into a digital CX platform in several ways, including surveys, website and app feedback, phone/chat conversations, social media or API hooks into other customer-facing technologies. Once organizations collect this data, they must analyze it to deliver accurate and actionable items to improve overall customer experience. This process enables businesses to identify problems and rectify them, ensuring customer retention and repeat sales.
3. Happy and empowered employees make happier customers
Customer interactions with employees contribute greatly to an overall positive customer experience and the likelihood of increased sales. Yet, it's often forgotten that the retention of well-trained and satisfied employees has a great deal to do with how they can positively or negatively interact with customers.
If businesses give front-line employees the knowledge and power to use and see recommended action items derived from CX management platforms -- such as those from Appcues, Medallia, SAP Fiori or Qualtrics -- to create a positive and meaningful experience for the customer, that customer will likely create a reciprocating positive experience for the employee. This cascading effect helps to maintain the best employees who will be more willing to go above and beyond.
4. Free word-of-mouth advertising
While there are plenty of avenues that provide feedback about a product or service, savvy customers have grown leery of online reviews. The reason for this is that they can be easily manipulated, as there are many fake, anonymous reviews on the web.
That said, if a positive or negative review of a product or service comes from a friend or family member, 90% of people will believe it, according to a HubSpot marketing survey, showing that it's important to keep customers happy enough that they'll want to tell others about it, which can in turn drive sales. Today, many customers choose to share those positive reviews on their personal accounts, using social media platforms such as Facebook, LinkedIn and Twitter.
5. Rectify mistakes as soon as they're identified
Even with the best organizations, tools and intentions, customers will have a bad experience somewhere along the line. The key is to identify and rectify mistakes throughout the customer experience lifecycle using available CX technologies. Long-standing and loyal customers will be more likely to forgive a mistake or two every now and then as long as the business quickly resolves issues. CX management platforms give customers ample opportunities to express any concerns through customer feedback options the platform provides, so businesses can immediately address them.
6. Better understand the competition's strengths and weaknesses
Much of the customer data a CX platform collects contains nuggets of information regarding how customers compare one product or service to a competitor's. Collection and analysis of this data can help businesses understand how the competition is faring. In turn, businesses can make quick adjustments to their own organization to either mimic positive competitor attributes or to avoid negative ones. These small yet critical details can be the deciding factor when a customer is choosing where to spend their money.