This story is a version of a post published here.
Customers today value their experience with a company a lot more than the product or service. Helpscout quotes McKinsey in their blog saying: 70% of buying experiences are based on how the customer feels they are being treated. It also ascertains that in 2011, 86% of consumers quit doing business with a company because of a bad customer experience.
Image Source: Customer Guru
Additionally as per research by Harris Interactive, almost 9 out of 10 U.S. consumers say they would pay more to ensure a superior customer experience.
Now that I have dumped a pile of data on you let me put all of that into perspective.
Do customers really pay for the product or the experience?
Let us look at Starbucks. The enormous coffee chain that has a customer retention rate of 75%. Which means that 3 out of every customers would stay a loyal customer to Starbucks for a long time. The main reason for this is an element of Starbucks’ business plan since they started in 1971.
Ever since they opened shop the four main goals of Starbucks has been:
Customer Service and Experience
Partner (employee) Satisfaction
Unlike many other companies that inculcate customer experience management only after they begin receiving revenue-dropping complaints, Starbucks had it as a goal from the beginning. Their primary aim was to change customers’ perspective of coffee shops. In fact, Starbucks has always claimed that it doesn’t sell coffee, it sells experiences. They never wanted their coffee shops to be a place where people can buy coffee, rather the founder wanted it to be a place where customers can experience a good cup of coffee.
Starbucks employees are trained to such an extent that customers love the way they are treated by them. From personalised uplifting messages on cups to friendly chats at the coffee shops, Starbucks has earned its place as #4 for Best Customer Experience in the 2011 Global Customer Experience Management Survey.
Aiming to increase customer retention everyday Starbucks has such loyal customer base that, as per a study conducted by Kissmetrics, their average lifetime value (LTV) of a customer is at $14,099. Now that’s a lot of money if you carefully invest in your most cherished customers. I am sure by now you know the answer to the question I started with – customers not just pay for the experience, they’d be happy to pay a premium for the great experience!
How do you create such an experience that customer love to pay for?
Keep the customer at the heart of everything you do
Mark Hassell, Chief Customer Officer at Virgin Australia Airlines says “the customer is at the heart of everything we do. Investing in the capability of your front line teams through recruitment, training, rewards and recognition is central to taking service to the next level.”
Can you imagine creating your product or service in a little bubble of your own? How would you ever know whether your customers like your product/service or not?
Placing your customer at the heart of your business also means that every employee works towards delivering nothing but exceptional customer experience and potentially getting as many promoters as possible. Not only does this make your employees feel more valued, but your customers also end up loving the experience and attention they receive.
Hassell added “enhancing the customer experience to meet demand, delivering innovation at every touch point and marrying this with unique service elements that go above and beyond will leave a lasting impression and ensure your customers keep coming back.”
Be memorable and be consistent
You cannot win customer ‘loyalty’ if you offer exemplary customer service once and then forget about them. For them to remember your business and stay a promoter to your brand, you need to be consistent in delivering delightful customer service. One that they won’t forget.
It is natural for every brand to treat their new customers with overwhelming love and warmth, only to forget all about them as soon as the next set of new customers show up.
If you think your job is to just gain customers, you cannot be more wrong! Your job is to marry them. Every customer who walks in becomes a vital part of your brand and thereby, the reason for its growth. Like in any marriage, you need to show your concern and shower attention on them regularly, but what is foremost is to remember them.
You remember your customers, they will remember your brand.
Engage your employees in delivering great customer experience
There is a definite nexus between employee engagement and customer experience – the better the former, the more effective the latter. In line with one of Bruce Temkin’s 6 laws of Customer Experience, it is only an engaged employee who can create an engaged customer. An employee who believes that his organisation nurtures and enables him grow will understand that it is his responsibility to make the organisation grow.
The first thing organisations need to understand is that satisfied employees are not the same as engaged employees. As Customer Insight puts it, employee satisfaction is the extent to which employees are happy or content with their jobs and work environment. On the other hand, employee engagement is the extent to which employees feel passionate about their jobs, are committed to the organisation, and put discretionary effort into their work. An engaged employee will have a symbiotic relationship with his organisation, as opposed to a satisfied one which is unidirectional.
In conclusion, creating a service that customers would love to pay for involves a careful blend of customer passionate employees and a customer centric mindset. What else would you recommend we should include in that list? Please share your views in comments below.