How Companies That Prioritize Customer Experience Reap the Profits

“In a world where products and services are becoming more and more commoditized, customer experience is the only true differentiator.” ― Annette Franz, founder and Chief Experience Officer at CX Journey Inc.

Customer experience is an essential element of your business! Why? Because it helps you stand out from the crowd. And that’s one of the most significant profitable points for you as you will witness increased sales, customer conversions, revenue, and several benefits, that you will get to know in this article.

However, there are certain challenges that companies face when trying to optimize the customer experience.

Demonstrating a tangible ROI or cost savings from improved customer experience.
Creating a customer-centric culture and mindset throughout the organization.
Developing customer experience metrics that are meaningful.
Overcoming organizational silos and departmental barriers.
Establishing a unified customer experience strategy.
Designing processes that prioritize the customer experience.
Implementing customer experience technology.
Defining customer-centric customer journey maps.
Integrating customer feedback into decision-making.
Creating a feedback loop for continuous improvement.

It is often assumed that customer experience and profits are two opposing forces, with the latter sacrificing the former in order to maximize the bottom line. However, recent studies have demonstrated that this does not have to be the case. In fact, there is a growing body of evidence that shows customer experience can actually drive profits, and that the two are not mutually exclusive. This is good news for businesses, as it means that by investing in customer experience, they can drive greater profits.

For example, businesses that offer positive customer experiences can increase customer loyalty, which in turn can lead to increased customer spending. Additionally, businesses that invest in customer experience can increase their customer base and gain new customers. Furthermore, businesses that prioritize customer experience can often create a competitive advantage, giving them an edge over their competition. All of these factors demonstrate that customer experience is not only beneficial to customers, but it can also be a key driver of profits.

How Great Customer Experience Can Lead to Increased Profits

“Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them,” says W. Edwards Deming.

For example, a local coffee shop that offers a friendly atmosphere, quality coffee and snacks, and fast service will draw customers in and build up loyalty. Customers who appreciate this experience will be more likely to return and refer their friends and family to the coffee shop. This can result in more sales and ultimately more profits for the business.

Additionally, those customers who have a great experience with the coffee shop are more likely to leave positive reviews online. This will help the business to attract new customers, as potential customers will see the positive reviews and be more likely to give the coffee shop a chance.

Overall, providing a great customer experience is a powerful tool for increasing profits in any business. By focusing on quality customer service, businesses can build a loyal customer base, attract new customers, and ultimately make more sales.

Here are 11 ways customer experience brings profits to your business and helps you improve the customer journey so that you can gain customer trust effortlessly:-

1) Exponential Revenue Growth

Mckinsey's report reveals that enhancing the customer experience has raised sales revenues by 2 to 7 percent and profitability by 1 to 2 percent. Additionally, the overall shareholder return has increased by 7 to 10 percent.

Today's customers are well aware of the variety of options they have in the market for the same solution they want to solve their problems. So the next thing they crave is best-in-class customer experience. CX assists you in converting your target audience into profitable customers who will continuously invest in your product and services and grow your revenue exponentially.

2) Word-of-Mouth Marketing

“Whatever you do, do it well. Do it so well that when people see you do it, they will want to come back and see you do it again, and they will want to bring others and show them how well you do what you do.” ~ Walt Disney

Delivery of superior customer experience is a boon for your company because your customers become your advertisers. On top of that, consumers prefer recommendations from friends and families more than advertising. So, providing a good CX increases the likelihood that the customer would suggest your offerings to others and bring in more customers through word-of-mouth marketing, increasing your overall profit of the business.

3) Reduction in Customer Acquisition Cost (CAC)

Positive customer experience increases brand loyalty and perception in the industry, which reduces the Customer Acquisition Cost (CAC). Companies like Apple, Amazon, Spotify, and many well-known brands that focus on CX, struggle less to acquire customers, as they are well known for making customers happy through uplifting their experiences. Positioning your brand as a customer-centric company helps you to reduce the acquiring cost of a customer by a significant amount.

Not only with the product but with keeping customer feedback in mind and implementing the changes from time to time, you can cater to customers with the best solutions that will keep a first-time customer satisfied. In these ways, you can build a strong brand reputation that aid you in reducing expenses and use the financial resource for other activities to expand the business capabilities.

4) Saves Organizational Resources

With the delivery of a great customer experience, you will notice that the usage of your organizational resources is more optimized than ever. Whether it's a financial or human asset, CX can lessen your burden of investing the resources to handle your customers. It drives repeat customers to promote your brand, which clearly signifies increased future purchases.

Many organizations leverage better customer experiences to attract customers by fulfilling their needs and requirements at every touchpoint. The automatic inflow of customers reduces resource allocation, saving enough of the organizational assets.

Businesses today are more aware of the profits CX brings for them, and hence most of them put efforts into its implementation for better business results through proper CX governance and framework.

5) Provides a Competitive Advantage

"With a sound, quantitative approach, brands can identify which moments to deprioritize, which to innovate around, and which to simply fix so that they are on par with the competition. This requires both foundational customer experience research as well as the ongoing voice of customers," says Erin Wallace, Global Customer Experience Manager, BASF Agricultural Solutions, in Clootrack's 102 CX Expert report.

Customer experience is the brand differentiator that helps you gain a competitive edge in your niche market. If your competitors' have poor CX strategy, you can find their weaknesses through negative feedback shared by the target customers and work on providing unbeatable CX. It will increase the number of loyal customers and bring greater profits to your company.

6) Enhances Brand Reputation

When your company consistently delivers positive and satisfying experiences, you build a reputation for being a reliable and trustworthy provider of goods and services. This, in turn, leads to increased brand loyalty and advocacy, driving new business opportunities.

In today's digital age, customers have more power than ever to share their experiences with a wider audience through social media, review sites, and other platforms. Positive online reviews and ratings boost the company's reputation in the market. On the other hand, a negative experience can quickly spiral into negative reviews and damage the company's reputation. Positive customer experiences protect and enhance the brand image, obtaining profits that assist you in scaling up your business.

7) Improves Customer Service

“Customer service is the experience we deliver to our customer. It’s the promise we keep to the customer. It’s how we follow through for the customer. It’s how we make them feel when they do business with us.” ~ Shep Hyken

When your company prioritizes CX, you often transform your internal processes and systems to make them more efficient and effective. And this lead to faster resolution of customer issues, which is a critical component of good customer service. With a clear understanding of your customers' demands that only comes with CX operations, you can create a more satisfying and personalized experience for your consumers, bringing the expected ROI.

8) Disaster and Risk Management Tool

By proactively gathering and analyzing customer feedback, you can identify potential risks and issues before they become major problems through better customer interactions. Relying on CX helps your business quickly address and resolve any issues, which can prevent them from escalating and causing significant damage to the company's reputation.

By creating a positive CX, you can build a loyal customer base that will be more forgiving in the event of a crisis or disaster. When customers have a strong emotional connection with your brand, they are more likely to be understanding and forgiving when things go wrong. And this can help you recover more quickly and effectively from a crisis, as the customers will be more likely to stick with your business during difficult times.

9) Lowers Marketing Costs

“Customer experience better be at the top of your list when it comes to priorities in your organization. Customer experience is the new marketing.” ~ Steve Cannon

CX leads to organic growth and increased brand awareness as it involves a top-notch customer relationship management approach, which reduces the need for expensive advertising and marketing campaigns. Customers start trusting your brand more than ever as you follow a customer-first mindset and work to make their lives easier. Not only repeat customers but new customers will praise your brand if you nourish them with a satisfactory experience throughout their journey.

10) Leads to Increased Employee Engagement

The rate of employee engagement increases with the delivery of positive CX, as when employees see that their efforts are making a tangible impact on customers and the overall company's success. They are more likely to feel a sense of ownership and pride in their work, which can lead to increased motivation, productivity, and job satisfaction.

When your employees have a clear understanding of how their role contributes to the customer experience, they are better equipped to make decisions that align with the company's goals and values. Also, this can foster a culture of collaboration and teamwork, which leads to better employee experience that impacts your bottom line. Further, it leads to a sense of shared purpose among employees, which is a key driver of employee engagement.

11) Customer Loyalty

“The way to a customer’s heart is much more than a loyalty program. Making customer evangelists is about creating experiences worth talking about.” ~ Valerie Maltoni

When customers have a positive experience with your business, they are more likely to be loyal to your brand and continue to make purchases. You build trust and establish a strong emotional connection with your customers by making customers' experiences exceptional. And this leads to increased customer retention, which can ultimately result in increased revenue and long-term growth for the company.

CX Analytics Help You Get Most Out of Customer Experience

CX analytics is a reliable source to provide better customer experience as it is backed the customer data and show you a clear path to follow to make your customers happy. You must choose your CX analytics tool carefully to get desired results for customers and your brand.

"A CX analytics tool should be able to give a whole picture and not just random snapshots of a particular segment. For this, the tool should be able to stitch together all of your data sources into one centralized location," says Shameel Abdulla, CEO at Clootrack (Source:- How Leaders Can Be Successful In Implementing A CX Analytics Solution).

With the right tool, you can get insights that reveal valuable information regarding the target customers. Knowing what the consumers demand, how they interact, and every minute detail in concern with your brand, you can revamp the business strategies and improve customer experience.

Wrapping Up

By understanding and addressing the needs and wants of the customers, your company can have loyal and satisfied customers by your side who are more likely to return, recommend the company to others, and even pay more for products and services. Additionally, if you focus on customer experience, you can also improve their overall operational efficiency and reduce costs by identifying and addressing areas of improvement through customer feedback.

Overall, companies are better equipped with customer experience to build and maintain a competitive advantage in the marketplace. By concentrating on the customer, you can create a positive and memorable experience that enhances brand reputation and drives profitability in the long term. Investing in customer experience is beneficial not only for customers but also for the company's bottom line. It is a win-win situation for all parties involved.