If you were to ask yourself “What’s the key to winning over a customer”, what would you say? In year’s past, answers like “price”, “product” and “speed of service” would have been at the top of the list. And while those answers are certainly still important in making a sale, studies show that by 2020 one key factor will trump them all as the key differentiator in winning over customers: the customer experience (CX).

CX is the interaction between a company and a customer over the duration of their business relationship. From the moment a customer has visited your website or entered your store, the customer experience has begun. CX includes everything from getting an answer from customer support, to returning a product, to the effort it takes to accomplish a task on a website.

Just four years ago, Gartner reported that only 39% of companies expected to compete on the basis of customer experience. That number has taken a massive jump up to 89%. But why is CX going to be the number one key to business success in the very near future? There are a few key reasons to make CX improvement a priority.

Competitive Edge

Compare Company A with Company B. Why pick one over the other? Having differentiators are essential in the success of any business. In a study by Accenture, only 23% of companies delivered a great customer experience. So despite the importance of CX, the statistics show that most are still lacking in this area. When there are razor thin margins between your price and a competitor’s price, a superior CX can be the differentiator.

Knowing and understanding the frustrations of your customer and creating processes to help ease those frustrations (thus improving CX) can help your company stand out. In a society where customers are still constantly frustrated by long wait times to reach a customer service representative, addressing these pain points and streamlining the customer experience can give you a one up on the competition. The ‘how’ of selling something (over the ‘what’ of what your selling) is more important than ever.

People Will Pay For Quality CX

Related to the competitive edge, research shows that people who experience high quality customer service are also willing to pay more for quality products and service. An American Express survey found that customers are willing to pay 12% more for a product that is accompanied with a strong customer experience.

This points to an incredibly basic but often overlooked fact: make it easy for customers to do business with you. The days of going for the ‘bargain brand’ of a product or service is becoming a thing of the past in favor of convenience and ease of use to get to the desired end.

Having Your Customers ‘Work’ For You

A common myth is that customers that are happy with your CX will simply carry on living their lives and keep their experience to themselves; however, American Express found that on average, happy customers tell nine people about a positive customer experience. This is free advertising for your company.  In addition, don’t be afraid to ask customers to provide feedback. A simple online review can help to build a library of positive feedback.

Word of mouth is still the cheapest and most effective form of marketing, and loyal customers are more willing to help promote your product or service. This is the reason why retaining customers is more important (and cheaper) than trying to acquire new ones. In fact, studies show that it’s 6-7 times more expensive to acquire a new customer as opposed to retain an existing customer.

This information points to a greater need to spend resources on keeping the existing customer base happy and build loyalty as opposed to constantly seeking new customers. However, as stated earlier, those happy customers you retain could just be the key to acquiring new customers at a much discounted rate. As Tony Hseih, CEO of Zappos says, “We take most of the money that we could have spent on paid advertising and instead put it back into the customer experience. Then we let the customers be our marketing.

In Conclusion

Overall, there’s a plethora of statistics about the importance of the customer experience, but they all lead to the same conclusion: if you want to compete in today’s economy, your CX has to be top notch. In order to make sure it is, companies should actively listen to their customers and understand their pain points throughout the customer experience.

Quite simply, it’s no longer a question of whether or not the customer experience is the most important aspect in closing a sale, but rather a question of whether or not your company will make it a priority.

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