It’s no secret that providing exceptional customer service is vital for business. Just ask Nordstrom, Starbucks, or Uber, all of whom attribute their financial success to providing a customer experience unlike any other. These companies demonstrate how, in today’s market, terms like “customer-focused”, “customer-centric”, and “customer satisfaction” are more than just empty buzzwords: they are...
It’s no secret that providing exceptional customer service is vital for business. Just ask Nordstrom, Starbucks, or Uber, all of whom attribute their financial success to providing a customer experience unlike any other. These companies demonstrate how, in today’s market, terms like “customer-focused”, “customer-centric”, and “customer satisfaction” are more than just empty buzzwords: they are the reality.
All three of the aforementioned companies show how companies must work harder to provide a higher level of customer care. They show why no business can afford to ignore the direct correlation between customer satisfaction and achieving better business outcomes. A small sampling of research further illustrates the link between customer service and the bottom line.
What the Research Say
Numerous reports indicate that customer-service experience plays a significant role in driving buying decisions. According to the 2011 Customer Experience Impact Report commissioned by RightNow, 86% of consumers will pay more for excellent customer service, and 89% have begun doing business with a competitor following a poor customer service experience.
Similarly, the 2014 American Express Global Customer Service Barometer found that two-thirds of surveyed customers were willing to spend an average of 14% more with a company that provided excellent customer service. However, the survey also makes clear that consumers who were not willing to spend more were not necessarily ambivalent about customer service. They simply felt that they should not have to spend more to get it.
On the other hand, not all companies are keeping up with demand for good service. The RIghtNow report found that 79% of customers who voiced complaints online about poor customer service had their complaints ignored. And, according to the Customers 2020 report by Walker Information, Inc., companies who do not adapt to consumers’ rising expectations may find it increasingly difficult to remain competitive.
In fact, the Walker Report predicts that customer experience will eclipse price and product as the key brand differentiator by the end of this decade. According to the report, many businesses are already taking steps to prepare for this shift. To be relevant in 2020, companies will need to leverage big data across their organization and emphasize proactive and personalized support to grow and retain their customer bases.
Consumer demand for quality service is expected to drive job growth for customer-service representatives in the coming years. According to the U.S. Bureau of Labor Statistics, the occupation employed nearly 2.4 million workers in 2012 and will generate 298,700 new jobs nationally through 2022, ranking eighth among all occupations for total job growth over the decade.
The Bottom Line
Clearly, this is the age of the customer. There is no question that providing exceptional customer value is at the heart of today’s market.
To maintain a healthy bottom line, businesses must be obsessed with customer satisfaction. Optimizing customer experience and building brand loyalty will deliver a higher return on investments, reducing the cost of acquiring new customers and increasing revenue from returning customers. Repeat customers tend to spend as much as 33% more than new customers and refer friends and colleagues which, in turn, provide a business with strong word of mouth and reduce acquisition costs. According to Jill Griffin, author of Customer Loyalty, loyal customers are 60% – 70% more likely to buy from your business rather than a competitor, while the probability of selling to a new customer is only 5% – 20%.
Overwhelmingly, evidence supports that customer experience is critical for achieving competitive bottom line results. Businesses must provide customers with effortless experiences at every stage of the customer journey, making interactions as simple and effective as possible.