Fun facts about the importance of Customer Experience
There are so many discussions going on about why customer experience is so important. For me, CX is a combination of 1. the encounter between the company and a customer, physical or digital, 2. the image of the company or brand and 3. the emotions in the above-mentioned situations. These all come together in the customer's minds as the Customer Experience.
Well, science is on our side, CX is important yes! I gather some facts about why it is so important, and more importantly, why Emotional Experience is even more important than plain satisfaction.
Net Promoter Score has its pros and cons, but here are some facts why promoters are important for the business.
Satisfied customers recommending your business are one of the factors impacting business growth. According to London School of Economics a 7% growth in NPS performance correlates approximately with 1% growth in the revenue.
Others suggest that up-sales revenue grows by 3.2% when NPS grows by 10 points.
Promoters will 4-5 times more likely bring
you new customers.
The lifecycle value of a promoter is 25% higher and a promoter buys approximately 20% more than the average customer per order.
Simply, promoter customers are 25% more valuable.
In fact, some investors, most notably, Jason M. Lemkin, have stated that an increasing and/or high NPS score is one of the greatest signs of a good investment.
But even though this all sounds just wonderful, you need to remember, that "statistically speaking, only 20% of those who've identified themselves as promoters will proactively endorse you without engagement."
Emotions are much more than the satisfaction
Why emotions are so important then? To put it simply, emotions affect our experience the most.
74% of customers with positive emotions will advocate for the business, while 63% will be retained. Only 8% of customers with negative emotions will advocate for your company and only 13% of them will retain.
Customer emotions can affect not only whether you lose or keep customers but also if they will buy more or less from you. It can also dictate whether they will spread good or bad word of mouth about your company.
Emotionally connected customers are even more valuable than satisfied ones. 52% more valuable, on average, than those who are just highly satisfied.
Emotions also affect our decisions to buy, will the customers recommend the brand and customers loyalty.
According to Forrester the emotion in customer experience affect our loyalty more than how easy or how effective the service was.
Customer Experience is important, that is a fact. And emotions are the key component of any experience and that is also a fact. Customers will have different emotions in the experience, whether you plan it or not.
So, the question is, why there are still so many companies that truly pay attention to the emotional side of the experience or acknowledges it in a deeper way?
Sources and further reads:
1. Advocacy Drives Growth. London School of Economics 2005.
3. Phillip Schmitt, Bernd Skiera, Christophe Van den Bulte (2011) Referral Programs and Customer Value. Journal of Marketing: January 2011, Vol. 75, No. 1, pp. 46-59.
5. Designing the Soft Side of Customer Experience, MITSLOAN
https://sloanreview.mit.edu/article/designing-the-soft-side-of-customer-service/
6. customerthink.com/how-to-measure-emotion-in-customer-experience
7. Magids, Zorfas and Leemon. The New Science of Customer Emotions (2015) Harvard Business Review https://hbr.org/2015/11/the-new-science-of-customer-emotions
8. Measure Emotions In Customer Experiences To Improve Loyalty. Forrester.
https://go.forrester.com/blogs/16-03-09-measure_emotions_in_customer_experiences_to_improve_loyalty/
9. Forrester (CX Index 2015)
10. Designing the Soft Side of Customer Experience, MITSLOAN
https://sloanreview.mit.edu/article/designing-the-soft-side-of-customer-service/