Subscribe

Subscribe to Blog



In the age of customized newsfeeds and personalized advertisements, customer expectations are increasingly high. Customers have an overwhelming variety of products and services at their fingertips. They have louder voices and more choices than ever before. Therefore, it’s not surprising that in the past few years companies have begun to focus on the total Customer Experience (CX). Customer experience is more than just the User Experience. User experience (UX) often implies focusing only on the user’s interactions with a product and is a subset of CX. CX is the customer’s entire experience with a brand. It’s how a customer feels during every interaction with a company. During each interaction, a customer can become more or less happy with the company which can make them more or less likely to make a first purchase or to make subsequent purchases.

The entire customer experience can also be called the customer journey. During a customer’s journey with a brand, there are many places that a customer can have a poor or less-than perfect interaction. Poor customer experience can lead to frustrated customers, negative company and product reviews, and customer attrition. It can also lead to decreased rates of initial purchase when customers abandon your brand before making any purchase, or increased costs of customer support when customers contact company representatives when they can’t find the information they are looking for, experience a problem or find something confusing.

Consequences of bad CX:
Initial Purchase Abandonment & Loss of Customer Loyalty or Re-Purchase

A Customer Experience Impact Report commissioned by Oracle found that 89% of consumers switched to a competitor after a bad experience with a company. Now, like never before, customers have options. They are no longer limited by location or lack of service or product choices. Customers can shop all over the world and have access to an extensive variety of products. With alternatives so easily accessible, one poor experience can have a customer abandoning a company.

Negative Online Reviews & Social Media Criticism

Abandonment is not the only negative consequence of poor CX. The same Oracle report also found that “more than a quarter of consumers (26 percent) posted a negative comment on a social media.” With nearly 70% of U.S. adults using some sort of social media (Pew, 2018), the consequences of customers posting poor comments or reviews on Twitter or Facebook are high.

In-Person Word-of-Mouth, In-Person Negative Comments

Poor CX Costs

People like to talk about their experiences with products and services. When a customer has a bad experience with a product, not only are they telling their friends and colleagues about those poor experiences, they are also one less customer spreading positive word-of-mouth reviews. Positive word-of-mouth has been shown to have a significant, positive impact on purchase decisions (Martin, 2017). When potential customers hear positive reviews from friends and family, they are more likely to purchase that product. Negative word-of-mouth, though seemingly less influential than positive word-of-mouth, is not completely without consequence. Lack of positive word-of-mouth does nothing to promote your product.  Organizations will lose out on potential free marketing when fewer customers are enthusiastic about their experiences.

Customer Support Increased Costs

Anytime customers experience pain points in their interaction with an organization the potential for a customer support call exists.  A 2016 study by the Nielsen Norman Group found that the more software bugs, barriers, frustration, confusion, or even “perception of complexity” customers encounter, the higher the probability they will make a call to your customer service center (Flaherty, 2016). In their study, missing or hard-to-find information accounted for 38% of customer calls.  More calls lead to higher customer support costs.  Even if customer have a great experience during the call and after, the result is still increased costs that may have been avoided with greater attention to overall CX.

 

Surprisingly, creating an adequate customer experience does not require the addition of extreme gimmicks or costly promotions. According to a 2016 study by KMPG, meeting customer experience expectations is more important that exceeding them. While negative experiences can cause severe revenue loss, the excessive cost of exceeding customer expectations also results in lost revenue. The cost-benefit tradeoff of exceeding expectations does not always make financial sense when customers can have a satisfying customer experience by meeting their basic needs.

Tracking every customer-company interaction can be challenging. Journey maps are a great tool to track customers’ pain points throughout their interactions with a brand or company. Journey maps allow researchers to map out all the touchpoints that a customer has with a company and their feelings about those interactions. This type of map or mapping process allows companies to identify, focus on and improve touchpoints where interactions result in unsatisfactory CX which may result in brand abandonment.Poor CX and High Cost

CX isn’t just customer service or usability, it’s how customers and potential customers experience every aspect of your product or service, before, during and after purchase. There are high costs to poor CX and companies who employ strategies to measure and improve their customers’ experience will benefit. The cost of improving CX will result not only in the purchase of a single product, but free, word-of-mouth advertising, positive online reviews and customer re-purchase without repeat acquisition costs.

 

References:

http://www.oracle.com/us/products/applications/cust-exp-impact-report-epss-1560493.pdf

https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2016/11/How-much-is-custerom-experience-worth.pdf

https://uxmastery.com/how-to-create-a-customer-journey-map/

https://www.nngroup.com/articles/customer-service-omnichannel-ux/

Martin, W. C. (2017). Positive Versus Negative Word-of-mouth: Effects on Receivers. Academy of Marketing Studies Journal.

More from this author

Patrick K. Donnelly

CEO & Co-founder of Truthlab

Patrick K. Donnelly
Patrick K. Donnelly

Patrick K. Donnelly

CEO & Co-founder of Truthlab

More from this author

Watch Highlight Reels

Find out how Truthlab can shed light on the customer experience with the truth quotient.

Customer Experience Update