Customer experience has always been important in business, and the advent of the Internet dramatically increased its importance.
The more competition there is in an industry, the more important customer experience is. When consumers have many choices, customer experience makes the difference in who they ultimately buy from. With this in mind, it’s no wonder that a new study from Forrester Research shows a direct correlation between great customer experience and revenue growth.
Why Some Companies Are Dying Out
For a good example of the importance of customer experience, take a look at the cable industry. Previously it was difficult for new companies to break into the market, but digital transformation driven by the Internet has changed that, making it much easier for competitors to set up. Traditional cable companies are struggling. They are steadily losing business to streaming video services like Netflix.
At the same time cable companies also rank very low when it comes to customer experience.
In the past, this wasn’t a big deal for these monopolistic companies. Customers really didn’t have much of a choice. However, the Internet – and streaming video, specifically – changed the game. Customers will no longer put up with a poor experience. They’ll simply cancel their service and go somewhere else for video entertainment.
Customer Experience Leads Directly to Customer Loyalty
So cable companies need to focus on customer experience if they want to drive loyalty. And it is the same in pretty much all industries – competition is increasing wherever you look.
Loyal customers are brand advocates for your business. They do your marketing for you. They refer their friends and family to you, and they stick with you when other companies might offer a better deal. Customer loyalty is one of the best revenue drivers for any business, online or off.
The best way to improve customer loyalty? Improve the customer experience. That means:
- Engaging customers
- Listening and responding to customers
- Knowing your customers
Don’t Believe the Stock Market
How do you measure the impact of customer experience? When it comes to business success, many people look at whether your company stock price goes up. However, the stock market is influenced by many outside factors. It’s not a great indicator of the success or failure of your company’s customer experience strategy.
Instead, look at your revenue growth rate. As you focus on improving the customer experience, revenue growth should increase. If it’s not increasing, it’s time to reconsider your customer experience strategy.
Revenue is easy enough to measure. But how do you measure customer experience? Start by gathering customer feedback. In fact, gathering those customer insights will not only help you understand how your customer experience strategy is working, it will also lead to better customer engagement, higher loyalty rates and deeper market insight.