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How Customer Experience (CX) Increases Company Profits

By June 9, 2023April 1st, 2024No Comments

The experience that your customer has when interacting with your business is essential to the long term success of your company. If a customer has a positive experience they are more likely to think positively of the overall buying experience and subsequently become a loyal customer. Having a band of loyal customers means increased revenue because these customers will be more likely to choose your product over a competitors’ whenever they’re in the market for a product within your category.

Taking the time to invest in your business’ customer experience also means that these satisfied customers will be more likely to share their experience with their friends and family, therefore spreading their positive experience through word of mouth and potentially increasing your customer base.

However, how can you be sure that investing in customer experience is a worthwhile expense? Well according to Forbes, companies that emphasize customer experience are shown to drive revenue 4% to 8% higher than other industries. If this statistic isn’t convincing, then consider that 84% of companies that focus on creating a positive customer experience report having experienced an increase in revenue. Let’s delve into exactly why customer experience supports company growth and how you can apply certain strategies to foster this positive experience and increase your profits.

Why a Positive Customer Experience Boosts Company Growth

So we understand that a positive customer experience drives sales, but why is this the case and how is it done? Customer experience (also known as CX) affects multiple facets of a business. To prove this, here are a few examples of the ways in which customer experiences boost overall growth.

1

Driving recommendations

When a customer has a positive experience with your business they’re more likely to recommend you to people they know. This word of mouth praise is great because consumers are likely to buy a product when they have a recommendation from someone they trust. This effect can also be seen through customer reviews, which is why many companies clearly advertise the reviews of satisfied customers.
2

Creating brand loyalty

Brand loyalty has always been valuable given that it’s easier to retain customers than it is to gain new ones. However, in a day and age where consumers crave authenticity and a more personal connection to their brands it becomes almost essential. Studies show that 73% of consumers believe that having a positive experience with a brand will determine their loyalty to that brand.
3

Repurchasing power

When a customer has a positive experience with a business they are more likely to continue buying products from this business. This all boils down to common sense. Think about the situation from the buyer’s perspective: if you have a bad experience with a company you are far less likely to support their business and spend your hard earned money on them again. Remember that 61% of small and medium sized businesses (SMBs) claim that over half of their total revenue comes from repeat
4

Higher Sales on new products

Impressing customers with your attention to customer experience affects more than just the product you’re currently trying to sell. Studies show that enthusiastic customers who report a high CX rating are six times more likely to buy new products from brands they love. Keeping these customers hooked can yield great returns for your business in the long run.
5

Empowering staff

Just like how consumers today care more about the ethics, authenticity, and relationship they have with a brand, employees are equally concerned with the purpose of their work. An employee who can confidently say their work is making a difference will be more engaged, more attentive, and more hard working. Educating employees about your customer base and the needs of these customers can give your employees the push they need. Knowing they have the ability to positively affect a customer fosters a sense of purpose and satisfaction in their efforts.

How to Measure Customer Experience

Understanding the value of a positive customer experience is one thing, but without being able to properly assess your business’ current level of customer satisfaction how can you expect to increase your CX rating?

To increase customer satisfaction you must first have a system that allows you to measure the current level of satisfaction, this way you know where you can improve and when you’ll need to improve in the future. Fortunately there are a few ways that you can measure this and apply it to your business.

1

Analyze survey results

Making a point of performing consistent surveys in which you analyze the overall satisfaction of your customers can be a simple way for you to assess how customers would rate their experience. There are many platforms that allow a business to create surveys, including SurveyMonkey, Google Forms, and Survey Planet. Simply choose the tool that works for you and get to work.
2

Ask customers for their input

When we say to ask customers for input, we don’t simply mean conduct a survey and see how satisfied they are. By input we mean going that extra step and asking customers what types of products they would like to see, what issues they have with current products, what they love about current products, etc. This can be done in a variety of ways like through email or a community page. Social media is always a great option for encouraging proactive interaction between business and consumer. For example, Instagram has their stickers feature that can be used on a story. This allows brands to post their questions and consumers to give their answers.
3

Study lost customers

No matter how great your product is there will always be customers that fall off and stop buying from you. Studying the reasons behind why these customers left can provide valuable insight into the failings or limitations of your business, which can be used to improve customer satisfaction.

Being able to successfully measure the current satisfaction level of your customers will be essential to increasing the overall positivity of your customer experience. After assessing where your business lies on this spectrum, the next step is to take these findings and apply them.

How to Create a Positive Customer Experience

Creating a positive customer experience means understanding your customer on as deep a level as is possible. You need to understand the entire journey a customer makes, from deciding they want to buy a certain product to making that final click or swipe and purchasing it. The more you understand your customer, the more effective your solutions will be.

To better understand your customer, consider asking yourself these questions:

  • What is the customer thinking or feeling?
  • What is the customer’s action?
  • How does a customer interact with your business?

After asking these questions or similar ones, you can implement the following strategies in order to create a great customer experience.

1

Prioritize convenience

People today crave immediate satisfaction, meaning that as customers in a marketplace their priority becomes having a convenient, efficient experience. According to a study conducted by Linnworks, it is reported that 76% of buyers believe convenience to be a top priority. Clearly this is a substantial figure however, convenience takes many forms. So what do these customers label convenient? Convenience to shoppers looks like the ability to seamlessly shop between digital devices, easily search for their desired products, simple return policies, and fast deliveries.
2

Improve Engagement

Customers want to feel heard and see their favorite brands putting in the effort to seriously consider their concerns. Businesses that can create an open environment in which their shoppers can regularly engage will have greater success than their competitors. Additionally, companies that provide a two-way street for this interaction and make sure to regularly respond to their customers in a timely fashion are also more successful. In a study done by Microsoft in 2017, it was reported that 74% of millennials claimed that businesses that were more responsive on social media were viewed more favorably.
3

Create an emotional connection

The reason that customers become loyal to a brand is because they have not only a positive experience with a brand, but because they have formed an emotional connection with this brand. If an emotional connection can be established then a customer will prove more likely to be a repeat customer. According to a study done by both Gallup and The Disney Institute, businesses that can attain an emotional connection with shoppers outperform their competitors by 26% in regard to gross margin. However, in regards to overall sales growth these companies outperform their competitors by 85%.
4

Define your customer experience values

Improving customer experience means understanding what shoppers need throughout their shopping journey. After understanding this, it’s important for you to gather your team and begin creating your own set of values. The goal of these values is to have a clear, objective example of what a great customer experience looks like. Having this framework will provide structure to your initiatives and allow you to measure your progress against these values.

A Great Customer Experience Engages Customers and Makes Sales

Forming a successful brand, accumulating and maintaining a consumer base, and growing your brand over time is all founded in the emotions of your customers. Consumers seek connection with their brands, and fortunately there are actionable steps that can be taken to foster this connection. Take these steps and always keep the customer in mind. Before you know it growth will come.

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