In today's competitive business landscape, the search for new customers and celebration of those ‘wins’ often takes centre stage. However, an often-overlooked part of sustainable business success lies in nurturing existing customer relationships. While the significance of your existing customers’ experiences with your company may seem intangible, a study conducted on global businesses helps us understand its quantifiable impact, and the results are huge. The study, published in Harvard Business Review (https://hbr.org/2014/08/the-value-of-customer-experience-quantified), highlights the enormous value of customer experience and then we look at how you can use these findings in your own fenestration business.
The Power of Customer Experience
Traditionally, the value of customer experience has been seen as a subjective matter, dependent on personal beliefs that it’s the “right thing to do” rather than concrete data. However, the study featured in the Harvard Business Review took a data-driven approach to measure the actual impact of customer experiences on revenue growth. By analysing two $1 billion+ businesses with different revenue models, researchers discovered that exceptional customer experiences had a profound influence on future spending.
Transactional Businesses: Driving Repeat Purchases
For transactional businesses focused on return frequency and spend per visit, the study found that customers who had the best past experiences spent an astounding 140% more compared to those with the poorest experiences. By controlling for other factors that influence repeat purchases, such as the necessity of the company's goods or services, it became evident that customer experience played a pivotal role in shaping future revenue growth.
Subscription-Based Businesses: Cultivating Customer Loyalty
In subscription-based industries, customer retention, cross-selling, and upselling are paramount. The study revealed that customers who rated their experiences poorly had a mere 43% chance of remaining subscribers after a year. Conversely, those who gave top experience scores had a significantly higher 74% chance of staying loyal for at least another year. Moreover, the quality of experience proved to be a reliable predictor of future membership length, with top-rated members likely to remain subscribers for another six years, on average.
Reducing Costs and Enhancing Efficiency
One of the common misconceptions surrounding customer experience investment is the belief that it incurs high costs. However, leading organisations have discovered that delivering exceptional experiences can actually reduce the cost to serve customers. Dissatisfied customers are more likely to return products or require support, resulting in increased expenses. By addressing the root causes of dissatisfaction, companies not only boost customer loyalty but also reduce the overall cost of serving their clients.
We Improve What We Measure
It’s well-known in business that the first step to improvement is to start measuring. To drive effective customer experience improvements then, organisations need to measure and track customer sentiment consistently. Regular customer surveys provide invaluable insights into the satisfaction levels and expectations of your customer base. Conducting customer surveys quarterly is often chosen as a suitable frequency, allowing you to capture changes in customer sentiment, promptly address any emerging issues and gain a comprehensive understanding of your customers' evolving needs and preferences.
Thanks to the work of Peter Kriss, the value of customer experience in driving business success is no longer a matter of opinion but a quantifiable reality. The study discussed in this article revealed the dramatic impact good experiences can have on revenue growth, customer retention, and cost reduction. By investing in regular customer surveys and acting upon the insights they provide, you can transform your customer relationships, improve loyalty, and unlock long-term growth.
Keystone Support Services: Harness the Power of Customer Surveys
At Keystone Market Research, we understand the significance
of customer experience measurement and its impact on your business's bottom
line. However, a lot of companies are already stretched with important priorities,
and gaining thorough customer research takes time and effort. It often isn’t as
simple as sending out a survey and watching responses pour in from eager to
share customers unfortunately. Keystone can offer fully managed customer survey
packages tailored to your unique requirements. Our expert team will work with
you to design a customer survey aligned to your business objectives and can then
execute this regularly for you, ensuring comprehensive data collection - letting
you and your team concentrate on running the business. We provide detailed
reports highlighting key findings and trends to save you time, and with our
yearly overview, you'll gain valuable insights into the long-term impact of
your customer experience initiatives.