Customer Experience (CX) is now widely discussed and duly name-checked in any web marketing context – but all too often this is as far as it gets. There is no follow through or readiness to invest in improvements.
However, as this 2014 study by Watermark Consulting vividly demonstrates, the top 10 leaders in Forrester Research’s annual Customer Experience Index Rankings not only outperformed the market over the last 7 years, generating a total return that was 26 points higher than the S&P 500 Index, but also enjoyed
- Higher revenues – due to better retention, less price sensitivity, greater wallet share and positive word-of-mouth.
- Lower expenses – due to reduced acquisition costs, fewer complaints, and the less intense service requirements of happy, loyal customers.
By contrast, the CX laggards (the bottom 10 in the Index) not only posted a negative stock return of -2.5% during a period (2007-13) when the broader market rose, but also suffered in terms of lower revenues and higher operating costs.
How to create exceptional customer experience
The Watermark report offers some valuable insights from the leaders of the top performing companies as to how to create a compelling and memorable customer experience:
- Aim for more than customer satisfaction – shape interactions that cultivate loyalty, not just satisfaction
- Nail the basics, then deliver pleasant surprises
- Understand that great experiences are intentional and emotional
- Use cognitive science to manage both the reality and the perception of the customer experience
- Recognize the link between the customer & employee experience – Happy, engaged employees help create happy, loyal customers
Why it matters
The opportunities offered by delivering exceptional customer experience are significant, as the Watermark report suggests:
The competitive opportunity implied by this study is compelling, because the reality today is that many sources of competitive differentiation can be fleeting. Product innovations can be mimicked, technology advances can be copied, and cost leadership is difficult to achieve let alone sustain.
But a great customer experience, and the internal ecosystem supporting it, can deliver tremendous strategic and economic value to a business, in a way that’s difficult for competitors to replicate.
The above offers a quick digest of Watermark’s short but powerful report. You can download the full report from this page.