Why CX is more important than price

Katy White
Client Development Director

Length

9 min read

Date

7 April 2021

The purchasing mindset and considerations shared by consumers and corporate buyers are evolving. Not too long ago, the keys to business success were offering the highest quality products for the most affordable price, but the ease of competitor comparisons has levelled this playing field. Being on par with quality and price nowadays only gets businesses in the game, while the winners excel in service; making customer experience the next competitive battleground for brands to differentiate themselves.

Customer experience (CX), is your customer’s perception of how your business treats them. CX is tied to the level of holistic fulfilment consumers feel across every touchpoint of their journey, from awareness to post-sale. Enhancing customer experience is a win-win strategy; by doing so, organisations can maximise customer satisfaction and improve their bottom line.

“There is little room for error in today’s highly connected world; anything from a clunky website, to slow loading pages, poor follow-up emails to hold queues on a customer service line could constitute a bad experience and drive customers to another brand,” says Kyle Cassidy, Head of UX Design & Insights at DEPT®. “To provide a positive customer experience, reduce friction points across customer journeys. Speed, convenience, knowledgeable help and friendly service are the basic ingredients for great experiences.”

It’s important to get it right the first time as businesses are rarely given the opportunity to rectify issues:

32% of global customers stop interacting with brands they love after one bad experience;
92% would completely abandon a company after two or three negative interactions;
Only 1 out of 26 unhappy customers complain and the remaining 91% simply leave;
13% go on to tell 15 or more people about their negative experience.

It’s clear from these stats that companies should not view the absence of feedback as a sign of satisfaction.

Fill the gap in CX delivery

There is a common disparity between what customers actually want and what companies are delivering. 80% of companies think they provide a superior customer experience, yet only 8% of those companies’ customers think they get a great experience.

The first step to becoming a customer-centric company is understanding what your customers value most and what touchpoints are required to optimise this experience both on and offline. Customer journey mapping is a necessary exercise to fully grasp the extent of your consumer base and better visualise the process they go through.

“Start with a ‘first fix’ strategy focused on interaction. Ensure forms aren’t too complex and the positioning of call-to-action buttons are clear. Check the site navigation and if there are any challenges when using various devices. These common friction points will cost you customers and need to be addressed before introducing new concepts and technology. Adapt your customer experience goals to reflect what really matters to your customers,” advises Cassidy.

Positive experiences are tangible

When customers feel appreciated, they’re willing to pay up to 16% more for products and services. While there is potential for every industry to charge a premium price for providing a positive customer experience, luxury and indulgence purchases have the most opportunities. CX also influences on-the-spot purchasing with 49% of buyers admitting to making impulse purchases after receiving a more personalised experience.

Additional value tied to CX is in creating consumer trust and sustaining loyalty. Customer retention is a high priority for businesses since it costs so much more to win new customers. In fact, attracting new customers is 6-7 times more expensive than retaining a current one. According to Gartner research, CX drives over two-thirds of customer loyalty, more than ‘brand’ and ‘price’ combined. “If you’re an Apple user and due for a computer upgrade, you’ll likely buy another Mac regardless of whether other technology manufacturers are offering additional features at a lower price; you’ve had a great experience and are now loyal to that brand,” says Cassidy.

Building great CX from the inside out

Consumers benchmark their expectations by comparing companies to the level of convenience they experience at Amazon, the personalisation at Netflix, or the terminal and inflight experience they receive from British Airways. These successful players have one thing in common: their business models are built on customer data and all of their activities are tailored to the customers’ needs. Using a CX operating model throughout a business’ structure and functions (governance and power, people and talent, and data and systems), creates connected experiences irrespective of the touchpoint or channel. Businesses that prioritise customer experience have more customer data and insights at their disposal, helping them to make more informed decisions to reflect consumer needs and behaviours as they emerge.

Technology is not the be-all solution for CX, but it is a great enabler for businesses to fulfil customer needs. “A customer experience management (CXM) platform may be the most important investment a brand can make to drive growth in today’s competitive business climate. Housing and organising feedback in a central platform prevents silos within an organisation and allows communication to happen more efficiently,” Cassidy explains. “When CRMs integrate within a brand’s digital estate, it’s able to gather feedback in one place. It can route customer service enquiries, marketing comments or website issues directly to the department in charge, instead of floating around a pool of feedback. Employees can easily sort through and glean actionable insights.” Adding automation further streamlines this process for all.

CX steers your commerce strategy

Over a decade ago, Domino’s Pizza came in last in consumer taste preference surveys, but instead of ignoring the issue or getting beaten down by negative opinions, the company reached out to customers on social media and made innovative changes. Domino’s stock price rose 5000% between 2008 and 2018 and its pizza has made huge improvements in consumer taste tests. Domino’s continues to serve up innovations in customer experience (CX), creating more than 15 ways to order pizza and simplifying ordering down to zero clicks via its app. “Domino’s has evolved into the world’s favourite pizza chain by delivering great experience throughout the entire customer journey. Their secret sauce for success is listening to customers and transforming into a cutting-edge e-commerce company that just happens to sell pizza,” commented Cassidy.

Engaging customers via a successful CX strategy takes the guesswork out of product innovation and ensures a more successful release. Business communication platform Slack has a dedicated customer experience team that not only helps customers become more successful in their own businesses, but takes on feedback to fine-tune the service. During the company’s public debut in 2019, its CEO attributed its growth to this collaborative approach.

Listening to your audience means more than adapting to what they’re saying about your brand and products. Observing wider trends can help inform new product launches and iterations. Adidas acknowledged consumer desire for more sustainable products and began creating shoes from ocean plastic, expanding its brand purpose and gaining a positive reputation.

This evolution of CX is driven by the convergence of branding and commerce. Traditionally, branding used to be the domain of emotions, identity and mass media; while commerce was focused on rationality and transactions. Since technology and data have become so ingrained in CX, branding and commerce now go hand in hand and each touchpoint with the consumer or buyer acts as a chance to both brand and sell. ‘Branded commerce’ is the key to meeting the new needs of customers, developing human experiences and building trust.

Shaping perception in the digital future

Brands are advancing their CX strategies to create more inclusive digital experiences that resonate with the broad needs of consumers, including preferences of the rising generation of digital natives, which include:

Self-serve options provide the level of convenience expected from today’s brands. Customers seek 24/7 access to support and they value companies that provide it; whether that’s through chatbots, interactive voice response (IVR) systems or personalised knowledge bases. While self-serve tools can be incredibly adept at addressing customers’ needs, they can’t function effectively without human intervention, so optimisation efforts should always include training humans to pick up where the automation solution leaves off.
Artificial intelligence is a game-changer in CX. With proper business context, AI can identify the root causes of CX issues and uncover the most predictive, exclusive and frequent journeys that customers take before and after an interaction, or between multiple interactions. AI’s complexity and precision orchestrate personalised consumer experiences across channels through data unification, real-time insights delivery and business context. Its application creates experiences that naturally integrate with consumers’ everyday lives and make them feel as if every product or brand experience was tailored just for them.
Voice technology is radically changing the way customers discover and interact with the virtual world. It’s created opportunities for businesses to make their experiences intuitive, simple, and hassle-free. Virtual assistants, like Alexa and Google Nest, can differentiate between voices and provide more personalised messages and content. Brands that are already getting creative with their voice strategies include: Patron Tequila which helps consumers access custom cocktail recipes; Tide provides advice about removing stains caused by over 200 different substances; and Nestlé has created a skill that provides voice cooking instructions as you cook.

The emphasis is on CX

Business leaders have gained a deeper understanding of the tangible outcomes CX delivers and budgets allocated for improvements are rising as a result. As new strategies get introduced, the pressure is on internal teams to demonstrate value from the investment. Cassidy recommends: “using data to analyse how satisfied customers drive up revenue and lower churn. Highlight areas for improvement and make sure to keep an eye on your customer feedback, be it online or real-life interactions. Identify the aspects your customers like the most and the ones they don’t, then use these insights to focus on your strengths while minimising the impact of your weaknesses. Think about what changes can be made immediately, and which should be considered as part of a longer-term solution, enabling you to prioritise and plan ahead.” Customer experience should always be a work in progress.

Wherever you are in your CX journey, we’re here to help. Contact us to discuss the details.