Friday, February 17, 2012

Positive Customer Experience is the New Competitive Advantage

With globalization of brands, internet penetration and social media platforms, it is important more than ever to improve the customer experience by delivering superior value propositions to survive and grow. When money is easy to come by and jobs aplenty, customers have larger disposable incomes which translate into more spending on goods and services. So, the tendency to forget and forgive a bad experience at a retailer or a restaurant is natural. However, when the economic conditions turn gloomy and the overall economic climate darkens, customers are less likely to overlook poor service and hence improving customer experience ought to be the central point of the business strategy.
A research report published by the Harris Group has shown that 87% of the customers stopped dealing with businesses because of negative customer experiences. This figure is up from the 68% that was reported a couple of years ago. And for those who believe that during tough economic times, price is the only differentiating factor, the same survey found that more than half of the customers sampled (58%) indicated that they would still rank customer experience higher than other aspects of the value proposition and would be willing to pay more for superior customer experience.

Further, improving customer experience often leads to customer retention and in good times as well as bad times, there is nothing like repeat business.

Another report, by the famous consulting company, Forrester Research, has examined the relationship between customer experience and word of mouth and how they go hand in hand. For instance, customers are more likely to discuss bad experiences with their peers and colleagues than good ones. Next, the Gen Xers have been found to tell their peers about bad experiences more than any other age group. Considering the fact that Gen Xers are the generation that is now rising up the corporate ladder, businesses ought to pay heed to these findings which indicate that customer experience is paramount in furthering the interests of the business.

A couple of points stand out in the preceding discussion a) Getting things right the first time and improving customer experience in the “first touch” lead to repeat business and better word of mouth publicity and b) bad experiences make customers “vote with their feet” and desist from doing business with the company. In both cases, the bottom line is the same: The customer is the King and Customer experience management is the way to score over the competition. When products and services go down the lifecycle towards commoditization, the differentiating factor that seals the sale is how well the customer has been treated and how well his or her needs were taken care of. Implementing an effective CRM solution at all customer touch points can prove to be critical in gaining a competitive advantage.

Whether it is a booming economy or a gloomy economy, retaining customers and generating positive publicity are the goals to which all businesses aspire. And these objectives can only be met if the “customer touch points” are well oiled and the customers are left wanting for more.


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