“Every day we’re saying, ‘How can we keep this customer happy?’ How can we get ahead in innovation by doing this? Because if we don’t, somebody else will.”
– Bill Gates
Customers make the trickiest puzzle piece in an organisation’s operations. These days, with intense competition, customers have too many brand options at their disposal. Retaining customers becomes extremely important in these cases.
Customer retention is a result of customer satisfaction
It is only when a customer is happy with their experience with an organisation that they remain loyal to the company. If not, they switch. To make sure that customers remain satisfied with the organisation’s service and offerings, brands must actively track customer experience and satisfaction.
These 17 statistics will be an excellent starting point for any brand looking to understand how customer experience and satisfaction stands in today’s market:
1. 55% customers are willing to make higher payments for better service
8 out of every 10 customers are open to paying premium prices to get better service and superior-quality products. This is especially true in the Travel, Finance and Food & Beverages industries. In a 2017 study commissioned by the American Express, it was noticed how customers were willing to pay a premium of 20-40% if the brand promised to improve its services.
71% customers of AMEX also reported that they would switch brands if the quality of service deteriorated any further.
Customer feedback has always been a valuable source of information for organisations. But this stat shows how deceptive customer feedback can be. Research shows that most customers quietly quit the brand if disappointed with the service. Only 1 in every 26 customers actively voices their grievances in an attempt to improve their experience.
Organisations should actively seek telephonic feedback from customers and work on the grievances.
3. Customer acquisition is 7 times more expensive than customer retention
A customer will never purchase from your brand if they don’t trust you and the services you offer. Gaining this trust is hard work and often takes years. This makes the entire customer acquisition process extremely expensive.
Additionally, a lost customer is a financial burden and a dead-end investment for the brand. This makes customer retention extremely important.
The B2B market is a nice market that thrives on product innovation and service differentiation. Upselling and cross-selling offer B2B organisations the opportunity to showcase their creativity, operational benchmarks and thought leadership. This, in turn, discourages customers from churning.
5. Companies that use a multi-channel approach to customer engagement retain 89% of their customers
Multi-channel marketing offers customers the opportunity to indulge in a seamless shopping experience. They are better aware of the brand’s offerings and are better-placed to seek assistance and redressal from the organisation when multiple channels are utilised to serve and engage them.
In fact, research shows that 98% of all customers switch between two devices when shopping. Incorporating a multi-channel approach is one of the best ways to increase customer engagement and satisfaction.
6. 75% of global marketers don’t know what ‘customer engagement’ refers to
Customer engagement is the key to improving customer experiences. But unfortunately, a majority of marketers are unaware what engagement constitutes. Most believe that interacting with customers on social media is engagement. But they fail to account for all in-store interactions and events which also engage customers.
This can be a huge problem for companies. Studies also show that more than 75% of customers expect consistent positive engagement across channels at all times. When they fail to get this, there is a higher chance they may shift to competitors.
Customers these days are tech-savvy and they wish to have nothing to do with customer service representatives online. For one, most customers feel dissatisfied at the delayed response time that reps take when answering queries. Bots and applications, on the other hand, offer instantaneous support by providing meaningful and actionable solutions.
In fact, trends show that by 2020, 85% of all brand-customer interactions will be automated and mechanised. Currently, many organisations are experimenting with Internet of Things technology to improve customer experiences across channels.
More than 98% of customers across the world are almost exclusively using mobile devices for their online shopping. Mobile optimisation of websites, shopping portals and payment gateways is essential if brands wish to keep customers happy.
Studies also show that poor navigation within websites and a delay in page loads by one second lead to reductions in page view by 11% and a loss of conversion by 7%.
Improving customer experience is a team effort and CMOs play an active role in customer satisfaction. As Philip Dobbs, CMO, Bridgestone Tires says: “It’s a must, in today’s digital reality, to ensure full consumer centricity along the end-to-end brand experience. As a consequence, the need for the CMO to take an integrated, cross-functional approach is non-negotiable.” Most often, problems arise when CMOs do not realise this.
Customers want answers and when staff fails to provide them, many choose to switch brands. The lack of knowledge about products and services, coupled with a deficiency in training makes employees insensitive to and clueless about the needs of the customers.
When customers experience poor service at the storefront or on the website through a customer service representative, they are more likely to churn than make a complaint.
11. 64% of customers do not trust anything a brand says
Customers across the board believe that everything a brand says is just a sales effort and not genuine communication. Customers are more likely to trust what other customers say about the brand than believe in what brands say about themselves.
This makes customer advocacy a very important tool in the CMO’s arsenal.
Customer Lifetime Value (CLV) analysis of major global brands echoes the age-old knowledge that 20% of a brand’s customers provide 80% of its profitability. This is a fact that most marketers understand. But shockingly, not all these marketers know how to apply these percentages based on their own data.
Many organisations either do not have the resources or the mindset needed to successfully conduct a CLV analysis. A focused and conscious effort is needed to truly make the best use of CLV analysis.
Studies show that customer satisfaction is directly proportional to the success of any upsell or cross-sell strategy. Once customers are happy with a brand’s existing product portfolio and back-end service, they are more than willing to try new products.
Research also shows that spending on new products increases by 31% when customers are exceptionally happy with the brand.
14. More than 33% of organisations don’t know how to track a customer’s journey with the brand
A shocking discovery is that only one-third of the organisations around the world are thoroughly aware of a customer’s life cycle within the business. Most brands do not know how or where many of their conversions occurred and what makes customers stay.
This knowledge gap can be extremely dangerous for brands as they may fail to anticipate customer churn in the future.
15. More than 55% of customer queries and comments on social media are ignored by brands
Research shows that 71% of engaged customers are more likely to recommend the brand to their friends if brands treat them well on social media. This is especially true of Twitter where 78% of users wish to have their comments and queries answered within one hour of posting. If brands fail to do so, more than half of them churn during the next shopping experience.
Unfortunately, many brands are extremely unresponsive on social media and do not take an active interest in replying to customer queries. Additionally, studies have also shown that only comments containing words like ‘disappointed’ and ‘unhappy’ get picked up for redressal, while other queries don’t.
Customers perceive sales teams as highly-aggressive individuals engaged only in selling. They fail to consider salespeople as grievance redressal systems. Therefore social media and online communities are becoming more popular avenues for customers to put forth their complaints and queries.
Customers who are having a good experience with brands often switch brands purely to avoid the possibility of being harangued by the salesforce. Organisations need to be actively making plans to utilise their salesforce skilfully to ensure that customers aren’t negatively affected by them.
17. Only 20% of customers are emotionally impacted via social media content today
Research shows that customers take 2 out of every 3 purchases decisions after consuming emotionally-charged content. This is why this particular stat is so concerning. If customers do not feel emotionally engaged via social media (a platform they extensively use), it becomes increasingly difficult for brands to connect with their customers.
With very few avenues remaining to engage customers emotionally, marketers need to start thinking outside the box.
References:
huffingtonpost.com/vala-afshar/50-important-customer-exp
customerthink.com/15-vital-customer-experience-statistics-for-2018
dreamgrow.com/21-social-media-marketing-statistics
forbes.com/sites/forbestechcouncil/2017/11/17/how-to-master-customer-retention-using-artificial-intelligence/
superoffice.com/blog/customer-experience-statistics
