Blog

Positive Customer Experiences Accelerate Sales

Posted by Tom Smith on Mon, Jul, 08, 2013 @ 06:07 AM

 

Positive customer experience accelerates sales

Great study from Forrester Research entitled, "The Business Impact of Customer Experience, 2013."

In the study, Forrester finds a strong positive correlation between consumers' ratings of a firm in their Customer Experience Index and consumers' willingness to buy from the company again (0.71), as well as the likelihood to recommend that company (0.64). 

Likewise there is a negative correlation between the Customer Experience Index and the consumers' likelihood to change to another brand or service provider (-0.42).

Forrester was able to build a predictive model that includes:

  • Incremental purchases from existing customers in the same year.
  • Revenue saved by lower churn.
  • New sales driven by word of mouth or referrals.

The potential incremental revenue in each segment is huge:

  • Wireless service = $3,149 million
  • Airlines = $2,339 million
  • Hotels = $1,131 million
  • Credit card providers = $866 million
  • Car rental companies = $447 million
  • Medical insurance = $306 million
  • Insurance providers = $252 million
  • TV service providers = $261 million
  • Banks = $237 million
  • Retailers = $227 million
  • Internet service providers = $161 million
  • Iinvestment firms = $105 million
  • Consumer electronics manufacturers = $88 million
How much are you spending to improve customer experience, which will accelerate sales by generating more purchases, reduce churn and increase word of mouth?
By learning what cell phone users valued most, we were able to reduce churn among heavy users and save $16.2 million in revenue.
By implementing a customer bonding program for a B2B provider of investment research, we were able to reduce churn 50% and save more than $1 million in revenue in year one and untold millions in subsequent years due to repeat business and referrals.
Providing a positive customer experience is worth the expense and the effort.
Want to Accelerate Sales? Download the Free e-book  "Customer Bonding Programs:  How to Get, and Keep,Customers for Life"

Tags: improve customer experience to accelerate sales, improve loyalty and retention, customer bonding programs

6 Ways to Improve Loyalty and Retention to Accelerate Sales

Posted by Tom Smith on Mon, Jun, 17, 2013 @ 06:06 AM

 


Improve loyalty and retention to accelerate sales

There has been a lot written recently about the decline in loyalty and the increase in price sensitivity among customers.

Ultimately, if a customer doesn't have an emotional connection to a product or service provider, there will not be any loyalty -- regardless of how many points the customer has accrued.

Here are six ways companies can improve customer loyalty and retention to acclerate sales:

  1. Provide consistently excellent service from the start.  The promise made to customers at the beginning of the relationship sets the stage for future satisfaction.  Service respondents rate "having the service experience match the promise a company makes to me up front" as one of the most important areas of customer service.  A company's failure to deliver on the service experience promised is customers' greatest frustration. If you fail to deliver an acceptable customer experience, don't expect any loyalty or retention. Know what your customers expect and establish that as your service level "floor."
  2. Keep up with your customer.  Companies do not always notice subtle changes in customers' need for recognition.  Consumers want to be rewarded for being loyal.  Chipotle does not have a frequent buyer card; however, they do have promotions with sufficient frequency that enables loyal customers to get a free burrito for every five they purchase -- a 20% discount. This is a much better deal than most frequent buyer programs that offer a free item after ten purchases -- a 10% discount.
  3. Companies overlook signs that customers are considering switching -- or don't care.  One key indicator is partial switching when a customer has stayed with a particular company but has added another provider in the same category.  This is true with me between Nike and Under Armor with regards to workout clothes, as well as Zappos and Road Runner Sports with regards to running shoes. Likewise, DirecTV failed to deliver when I was looking for HDTV service and I moved to AT&T Uverse.  I doubt I am a sufficiently large customer to matter to any of these companies; however, DirecTV has certainly wasted several dollars on "win-back" snail mail since they ended our 15-year relationship.
  4. More than half of consumers have used social media sites to gather information about a company. Consumers trust 90% of what their friends and families say about a product or service.  They trust 80% of what a stranger on the internet says.  They trust less than 20% of what a company says.  Companies must engage in social media and know what's being said about them. And, if it's something bad, they need to address it head on.
  5. Although 68% of consumers say technology has improved their experience, even tech-savvy consumers are not swayed by new applications or technology solutions.  Companies need to clarify expectations at the beginning of the relationship and use the knowledge gained from current customers, as well as new customers who have switched from one provider to another to understand the reasons for the switch, to create a more satisfying experience.
  6. Treat customers like people instead of transactions. By treating someone like a person rather than a transaction, you can begin to create a relationship and have a dialogue that will increase your understanding of the customer, as well as whether or not they have an emotional connction with your brand. And, if not, what it will take to establish one.

Customers want companies to reward them for being loyal.  Recognition programs should reflect the customer's perception of meaningful increase in engagement or spending, not the company's perception.

The digital customer is asking companies to make their relationships more personal. Doing so can bring more customers into the fold and increase their emotional attachment to your company's products and services.

What steps are you taking to improve loyalty and retention?

Download the Free e-book  "Customer Bonding Programs:  How to Get, and Keep,Customers for Life"

Tags: consumer insights, accelerate sales, improve loyalty and retention, customer bonding programs