Importance of Customer Experience in 2024 – Infographic

The importance of customer experience is something that cannot be stated enough. Go back to the last time someone asked you for a recommendation about a place to eat or a store. Which sort of place did you recommend? You probably recommended a place where you had an incredibly good time or a store where the products exceeded your expectations.

This same thought process runs in the mind of everyone else too, including me.

When recommending or giving reviews about a place or service, we remember the ones that provide exceptional service, positive or negative. Whether the memories associated with a place are positive or negative, we spread the word about the experience to all our friends and connections.

Jeff Bezos, the co-founder of Amazon, recognized the importance of customer experience in the digital age and summed it up in this timeless quote, he said,

“If you make customers unhappy in the physical world, they might each tell 6 friends. If you make customers unhappy on the internet, they can each tell 6000 friends.”

Companies have recognized this as well and hence the widespread use of survey makers and other methods of feedback collection.

Read on to learn about the importance of customer experience in retail and tips on how to improve it.

The Importance of Customer Experience

The success or failure of a brand depends on the continued relationship its customers have with it. As a business owner, the biggest challenge that you face is ensuring that customers not only purchase from you but also ensure that they do it repeatedly. Building brand loyalty is the biggest challenge faced by businesses in the digital age.

The digital age has made reaching far-off customers incredibly easy. So, a business is not only competing with physical and digital stores in their own area, but also with stores that are entirely digital or in a different region altogether. The digital age has not only empowered businesses to increase their reach but has also made the customer a Godfather-like figure.

The digital age has now handed so many options to the customers that they can shop from a new store every day and still not go through all available options by the end of the year. The impact of the digital age on the customers’ decision making can be simplified down to:

• More options
• More switching power
• More influence over other customers

For 96% of customers, customer service is important for brand loyalty. In other words, the key to cultivating loyalty among customers is to provide an incredible customer experience. Scott Chow of The Blog Starter says — “use customer feedback and their queries to fuel your content planning. Find their pain points, create blogs to achieve their goals, and solve their problem.” Blogging customer pain points will not only improve the existing customer experience but also help get new customers.

Understanding Customer Experience: The Customers’ Point-of-View

A customer’s understanding of what customer experience involves is ever-evolving and ever-changing. Their definition is not restricted to only what the companies provide, but it is something that changes with time and technology. Customer expectations are always increasing; they don’t stop; they don’t devolve. Customers have higher expectations and are willing to pay extra for the experience they desire.

The digital age has made speed a coveted possession in the modern age. And, it’s not surprising that customers would prefer a quick but ineffective response rather than a slow but effective one. This is the major reason why social media marketing and monitoring is important for forward-thinking companies. Social media provides a platform to interact directly with your customers and give them an immediate response for their queries. Customers want speed before effectiveness.

Brands like Nike and Starbucks promptly respond to issues in social media. Other companies offer voice calls to provide instant and personalized assistance. Knowledge bases are great too. They allow customers to resolve their problems without having to wait for anything to be handed to them.

Apart from speed, brands have been investing in customer delight to improve their customer experience.

A less common but memorable way they do this is through physical efforts such as surprise deliveries. Initiatives like these take more work and resources. But with social media, they can quickly go viral. More importantly, it makes customers feel special and valued.

The age where the customer considered only the price when making purchase decisions is over. Pricing is now secondary to the customer; they value the experience and the relationship with the business too. This can be seen in the loyalty the customers have for luxury brands like Apple, Maybach, and Burberry. Customers are willing to pay extra for better service and overall experience.

In the long run, the expectations customers have from the brands they are loyal to are only bound to increase. Companies cannot stop at only offering what their competitors offer, they need to look within and see what changes they can make to improve themselves.

In the words of Tony Hsieh, CEO of Zappos, “Customer service shouldn’t just be a department, it should be the entire company.”

Poor Customer Service: An Overlook of Evident Fallouts 

The result of poor customer service is pretty self-evident in the digital age. Every instance of bad customer service and experience is now documented over the internet to be viewed endlessly by everyone online. For example, the instance in 2017, where four passengers had to be forcibly removed from a flight to accommodate staff members. A simple Google search query containing the terms “united airlines passenger” takes you directly to that incident. The result of this was a severe online backlash from people all around the world and resulted in many policy changes for all airlines.

Some of these policy changes included:

1. Additional annual training for all employees
2. Increased compensation incentives for customers voluntarily changing boarding plans
3. Creation of an automated system looking for volunteers to change travel plans
4. Significant steps to avoid overbooking on flights

If 2017 doesn’t jog your memory enough, there are instances from 2021 itself that show just how the opinion of one person can affect a brand.

James Charles is a well-known YouTube content creator who shot to fame for being the first male ambassador of CoverGirl. He even has his own apparel & make-up brands and is easily one of the most successful beauty YouTubers around. One such brand that he was promoting was Halo Beauty. A fallout with the creator and owner Tati Westbrook changed the way people viewed his channel and brand.

The primary reason for their fallout was Charles’ endorsement of a brand rivaling Tati Westbrook. There were personal reasons also involved in the eventual fallout but the key takeaway is that it is essential for you to stay consistent with your brand’s core values. You cannot afford to disappoint people associated with your brand. The direct result of this feud was that Charles lost over a million subscribers as a direct result of the video. His was the first channel to lose over a million subscribers in under 24 hours!

Not all customers or people associated with a brand will leave their reviews. Most customers will not even bother leaving their reviews about a brand or service; they will leave without making an issue of it. But they will make sure that they tell their friends or immediate family not to associate with that particular brand.

Bad customer service directly results in:

1. Loss of business
2. Loss of reputation
3. Loss of credibility

How Companies Benefit by Investing in CX  

Companies have long identified the importance of customer experience in this age and have taken significant steps towards optimizing the customer experience. Looking for real-life cases where companies have taken steps towards improving customer experience is easier than searching for a needle in a haystack.
Apple, one of the biggest brands in the world, makes it a point to contact every detractor personally, within 24 hours of them providing their ratings. Every Apple outlet measures its NPS surveys with each customer walking into the store and then review each customer’s rating. As soon as a detractor is identified, an operator gets in touch with them to understand the reasons behind their review.

The result: For every hour spent in calling detractors, Apple earned an additional profit of $1000. Overall this resulted in additional revenue of $25 million in 2011 alone. 

Wendy’s one of the most active brands on Twitter, has increased its popularity greatly with its witty replies to customer posts, and sassy tweets directed at other brands. Their campaign asking a customer to get 18 million retweets in exchange for a year’s worth of chicken nuggets has resulted in the most retweeted tweet of all time.

While they take their food and in-house service quite seriously, they have also made it a point to actively engage with their customers in a natural manner. Campaigns around National Roast Day and other events have made them one of the best Twitter accounts to engage with. And if you’re wondering about the financial aspect of it, well, they increased their profits by $64 million dollars as a direct result of customer engagement.

You might say that Apple and Wendy’s are established brands and probably would have hit those numbers even without. So, let us talk about eyewear brand Warby Parker, a very into the eyewear segment, their CX helped them compete with the biggest brands around.

Did they do anything out of the blue or extraordinary? Not really.

They just offered their customers additional options and choices when it came to selecting their eyewear. They created hashtags that let their customers try out their glasses and share them with their friends before deciding to buy them. They even made it easy to return the glasses if they didn’t fit the customer’s taste. Returns and exchanges have been popular among companies, but Warby Parker made this process engaging and fun. They have competed against the biggest brands in the business and achieved a valuation of over $1 Billion dollars in under a decade.

This is what customer experience management means in the digital age.

Tips to Improve Customer Experience

Use the following tips when you plan your customer experience strategy:

1. Invest in Employee Engagement: Employee engagement is one of the keys to unlocking exceptional customer experience. When your employees are happy with you, their satisfaction is reflected in their interactions with the customers. Get regular employee feedback, conduct regular employee training, and provide other recreational activities to keep the employees engaged and satisfied. Companies leading in CX have a higher rate of engaged employees than their competitors. (Related Read: Importance of Employee Satisfaction Survey)
2. Let the Customers Help Themselves: While customers do appreciate the help in resolving their issues, they would prefer to first look for the solutions themselves. Having help at hand for your customers before they interact with your service professionals is something you should consider. Consider integrating your Live Chat window with a knowledge base so that customers can look for answers themselves before interacting with your operators.
3. Collect Customer Feedback: Your customers are your best advisors. Who else can help you improve your products and services better than the people who pay for them? Make use of survey tools to regularly send feedback forms and satisfaction surveys to your customers. Pick the best survey questions, the proper channel of communication, and the ideal customer profile to maximize your survey responses. (Bonus Read: Advantages And Disadvantages of Surveys)
4. Open communication channels and stay in touch: At its center, customer experience about building good relationships with your customers. While it’s essential to be there for them when they have problems, continuously sharing relevant information through email marketing or social media is a great way to build credibility and connection. Nowadays, customers don’t just appreciate quick responses and direct contact with brands. They expect it. Being present in these channels shows them that you’re reliable, and they can reach out to you whenever they need (or want) to.

When it comes to customer service & experience strategies and how to improve them, follow the advice provided by Elon Musk, founder of Tesla, “It’s important to have a feedback loop where you’re constantly thinking about what you’ve done and how you could be doing it better.”