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Customer Experience Influence Report - May 2020
Let’s delve into the numerous benefits that can come from delivering excellent customer experience (CX). In order to understand how well you are doing it is also imperative to consider the best metrics for measuring your CX performance.
Great customer experience should be a top priority for any forward-thinking business. Not only does CX drives sales, it also makes a lot of sense to please your customers and encourage them to come back. However, customer experience isn’t just about improving sales metrics – there is a direct correlation between your company’s ability to provide excellent CX and your ability to win and retain loyal customers.
Customer loyalty is at an all time low. Switching brands can be very enticing - it is easier than ever and with more incentives. Connectivity has brought with it huge choice, with a plethora of companies competing against each other. With so many brands vying for customers’ attention, CX has become pivotal in their choice.
Evidence has shown that when selecting a brand, better customer experience can sway a customer choice to a greater extent than price. Customers want to feel positively connected and engaged with a brand, from first contact right through to purchasing and after-sales.
Customer Loyalty vs. Recommendation – UK Sectors (Fig. 1)
From this cross-sector customer satisfaction research it is clear to see that it the sectors which are benefiting from high levels of customer loyalty and recommendations are the ones that are providing compelling CX. As well as improved sales figures, loyalty and recommendation can also produce:
Customer advocacy – Customers dedicated to your brand and who take every opportunity to promote you in person and online
Price insensitivity – Customers who buy from you regardless of price as they’re 100% confident in your brand experience
Direct referrals – New customers onboarded due to referrals from satisfied customers
The customer’s ear – Unlike new customers, loyal customers are already switched on and alert to your marketing campaigns and promotions, encouraging repeat sales and ‘customer stickiness’ (customers who repeatedly come back to your brand)
What we can learn from the industries succeeding in CX
According to our benchmarking research, Online Retail gained the highest customer recommendations and loyalty metrics during the past 24 months.
Amazon increased its market share to 30.1% in 2019. As a brand, one of the ways it continues to succeed is to continuously refine its CX. It strives to deliver at every touchpoint – from innovative stock management technology to super-fast delivery networks. Their customer support is also superior to many, offering free, hassle-free returns. They have also experimented with ways to make themselves more compelling, such as adding a greater variety of services and products.
Traditional retailers, such as John Lewis, M&S and Next are also impacting online retail by successfully combining digital and physical offering to create a simple, succinct CX. A key part of their achievement comes from their commitment to listening to their customers’ preferences and using them to craft genuine cross channel experiences, helping boost loyalty and recommendations.
The major UK supermarkets are facing tough competition from low cost rivals such as Lidl and Aldi. They have looked to improve customer loyalty through the power of CX. As well as offering customers 24-hour delivery slots, they have also used improved technology to make substitutions and refunds as easy and instantiations as possible.
Data analytics is also increasingly used by supermarkets to understand customer behaviour better and to adapt their CX strategy accordingly. One example of this is how delivery drivers interact with customers. This can influence customer satisfaction greatly. By looking at things from the customers’ point of view and better understanding what they want from a handover, supermarkets are able to develop positive and more meaningful connections, which in turn increases loyalty.
Improving customer loyalty by delivering better customer satisfaction
If you want to have a strong understanding of how your customers really feel, it is crucial that you measure their CX in a clear and quantifiable manner.
Evidence from our cross-sector benchmarking analysis shows that customer satisfaction is the most dominant indicator of CX. Excellent customer service interactions are vital – by understanding and meeting your customers’ needs better, customer satisfaction is generated. This satisfaction is a key component in producing customer loyalty.
Exceeding expectations: the key factors that equate to outstanding CX
Our research has also looked at the important attributes of customer satisfaction to get a better understanding of what a customer’s ideal CX could be.
Customer Service, the sharp end of CX, plays a pivotal role in customer satisfaction and our research investigated the attributes customers expect and value most from a Customer Service team:
- Knowledge of the service/product
- Customer focus
- Patience and flexibility
- Language skills
Customer Service Satisfaction vs. Customer Loyalty (Fig. 3)
Here we see the powerful influence customer service satisfaction has on customer loyalty.
In short, higher customer satisfaction equals higher levels of repurchase behaviour.
The only sector disputing this trend is Distribution where the data shows lower levels of satisfaction and higher levels of re-use. This relates to the fact that many core online retailers rely on only a handful of distribution organisations. Removing customer choice about the delivery company they use creates low levels of satisfaction with the distribution company but doesn’t impact the likelihood of them re-using the online retailer.
With customers’ seeking out companies providing stand-out CX, it will be interesting to see if the quality of delivery starts to affect customers’ choice of online retailers? While Online Retail is the highest performing sector, its hyper-competitive, fast-moving landscape means there is no room for CX complacency; every touchpoint needs to be viewed as a chance to impress and differentiate from competitors to get ahead.
How making an effort really does have a great CX pay off
Our insights demonstrate that sectors delivering high satisfaction across service, relationship and product attributes are also likely to deliver frictionless interactions, with sentiments such as ‘quick’, ‘easy’ and ‘efficient’ featuring strongly in customer feedback.
Customer Effort Scores (CES) – how much work a customer needs to put in to reach their desired outcome – are a key indicator of the health of your CX. The chart below (figure 4) shows how customer recommendation levels are influenced by the amount of effort customers perceive they need to put in to get what they want from customer services.
Customer Satisfaction Scores (CSAT) vs. Customer Effort vs. Customer Recommendation (Fig. 4)
Our data suggests that the more effort a customer needs to exert, the more satisfaction declines. By making transactions effortless and touchpoints easy, businesses are rewarded with higher customer satisfaction levels and better recommendation levels.
Our research shows that a lot of customer frustration stems from customers feeling they aren’t being listened to, being talked over, being rushed, or being given an inconsiderate response.
Effective listening is a valuable skill for customer service teams and one that is easily trainable. Restaurants, Hotel and Leisure and Airline sectors often incorporate active listening training helping customer service teams engage customers and resolve issues effectively, in turn raising customer and employee satisfaction.
The best metrics to measure Customer Experience
While short indicator surveys are useful for providing high level ‘snapshots’ of customer satisfaction and customer comments give a ‘point in time’ understanding, our cross-sector analysis and CX research shows that real, transformative insights come from looking at all relevant CX metrics at play.
Taking time to understand the features of Customer Satisfaction, Customer Effort, Loyalty and Recommendation metrics, how they interact with each other and their impact on customers and their buying behaviours, allows you to make targeted, impactive changes to your CX, creating an experience that customers value, come back for and are willing to pay more for.
FREE Benchmark Evaluation Offer
What’s the reality of your CX? Our customised CX research teases out the CX metrics that matter, giving clear understanding of your customer needs and where to focus effort for the best ROI. To test the performance of your CX, we’re offering a free sample of your sector’s customer satisfaction scores, plus other relevant CX benchmarks from our latest data set. To find out more, or any other aspect of our CX research, contact us today using the form below.