All competitive businesses are dependent on their customer’s experience to drive their growth and prosperity. I can’t think of any exceptions, past or present. Even businesses that are focused on a basic need – for example healthcare or grocery retailing – use experiential drivers in some way to set themselves apart. Some monopolies are known for neglecting customer experience – but once they are forced into competitive environments they tend to smarten up quickly. Telecommunications companies have made this shift, some better than others.
At the top level, treating your customer well just seems like the right thing to do – for altruistic reasons if for nothing else. The interactions that happen every time a business makes a connection with a customer add up to affect much more than the individual transaction. It has been shown that loyalty, brand perception, spending, likelihood to recommend and overall satisfaction are all affected by CX – but I believe that the bigger story is what attracts people to the field. At the top level, customer experience is really about treating people with respect, consistency, dignity, foresight and style. For me, CX is about these kinds of personal connections. But to make the business case, there needs to be clear ways to measure the financial impact. So the question shifts from “why do we make experiences better for people?” – to “how much is an experience actually worth?”
For a question this big it is important to get a lot of opinions. We have scrubbed recent research and combined it with our own findings to give a top-level view of real-world business impacts from different industries…
CX can deliver more that $1Billion in revenue growth to large businesses. (“Differentiating on Customer Experience” Forrester, 2012 and “Make the Business Case” 2014)
CX has emerged as the single most important aspect in achieving success for companies across all industries – both B2B and B2C. (“Return on Customer” Don Peppers, Martha Rogers 2006)
Lenati’s internal research has shown that the company’s CX initiatives have contributed over $1 Billion dollars in new business for their clients, and have connected with over 100 Million customers worldwide. (Lenati, 2014)
Tesco’s chairman was quoted as saying “customer experience is more important than our products” (Sir Richard Broadbent, The Sunday Times, Nov. 2013)
87% of companies in the process of implementing a CX strategy saw positive business results in the first year. (Temkin Group Research 2013)
86% of customers are willing to pay more for an improved experience, but only 1% feel they are having their expectations met. (“CX: the Chicken or the Egg” Forbes)
Focusing business activity on a holistic customer’s journey (as opposed to individual touchpoints) is 30-40% more strongly correlated with customer satisfaction – and 20-30% more strongly correlated with business outcomes such as revenue, repeat purchase, reduced customer churn and positive word of mouth. (Alex Rawson, Ewan Duncan, and Connor Jones, Harvard Business Review, Sept. 2013)
Research on cross-channel selling shows that the use of mobile devices in retail influences 36% of sales, or approximately 1.1 trillion dollars of revenue. (Deloitte “The New Digital Divide“, 2014)
50% of customers of financial institutions are at risk of switching banks based on customer experience. (CapGemini 2013 “World Retail Banking Report“)
Businesses can lose 20% of revenue from poor customer experiences yet many are stuck in an execution chasm, unable to implement new CX strategies. (Oracle CX survey, 2014)
For more information on Customer Experience, Download THE ART AND SCIENCE OF CUSTOMER EXPERIENCE – Lenati’s comprehensive look at the rapidly-evolving field of CX. It includes deep dive articles on state-of-the-art research methods, design thinking, business case studies, omnichannel strategy, digital marketing and analytics & measurement tools and many more.