Article: The power of positive customer experiences

Research has proven that customers are seeking positive experiences. Yes, I did say seeking.

Let me illustrate this point with an easy 2-question exercise.

Question 1: When was the last time you had a positive experience with a company you do business with? Not an average experience but a positive one – where you walked away and were pleased with how easy it was to work with them, or glad they were so helpful and friendly. Think about your phone company, insurance company, retailers, restaurants and so on.

I’m constantly thinking about customer experiences and I keep a blog about my own. But even those who don’t can’t often recall more than one positive experience off the top of their heads. And yes, a good experience isn’t as easily recalled as a bad one, but low recall is a bit alarming. It should be sending off an alarm to businesses.

Question 2: If you knew you could get better service from a particular store would you go there (assuming all things were equal)? I would. That is why I stopped going to the Stop & Shop near my house (1/2 mile away) and now drive several more miles to get to a store with nicer help and better selection and product availability. I used to walk out of the store near my house and feel disappointed and uncomfortable. Who wants that in their life? Not I.

At this point, I am seeking good experiences. I know or can find out easily (on the Internet and from friends) what companies offer good experiences.

For example, when I was researching the best laser printer I started with Hewlett Packard. Figuring they offered the best product and the most options. Yes they offer the most options, but according to many sources, they offer bad phone customer service and some of their products do have problems in set up. So I looked for an alternative and found Canon. Their service is strong and helpful – so I bought a Canon. The unit was the same price as HP, however their refill cartridges are quite a bit more expensive. I didn’t care. I wanted the security of knowing good service was available to me if I needed it (I have not needed it so far).

That’s an example of seeking a good experience. I’m not willing to settle for bad experiences anymore. Why? Because you lose time and sometimes money when service isn’t good. In today’s world time is too valuable to be wasted in frustrating phone queues and receiving mediocre or poor service. And I’m guessing you can relate.

Business is based on an exchange of value – I provide money for a service that is of value to me. If it isn’t a value, why am I purchasing it?

Yes, sometimes I will settle for a product that has bad service due to certain variables. But when at all possible, I strive to work with a good service provider.

Why do you want to provide positive experiences?

A positive experience is the foundation for a long-term relationship – one that has a higher likelihood of re-purchase and positive word of mouth - two things that directly impact your bottom line.

Here is another reason you want to provide positive experiences: getting just 5% more of your customer base to be loyal would lead to an average increase in profit per customer between 25% and 100%. This is a compelling statistic from Frederick Reichheld’s bookThe Loyalty Effect: The Hidden Force Behind Growth, Profits and Lasting Value. A key way to getting to that loyalty is by offering positive customer experiences on a consistent basis to customers who are new or have long term relationships with your organization.

This reveals the opportunity to grow your business by keeping existing customers happy. Those happy customers will stay with your business longer and are more likely to spread the word – bringing you new customers with no acquisition cost.

How do you know if you are providing positive experiences to your customers?

You can evaluate the experiences your customers have by looking at every “touchpoint” you have with your customers and (a) looking for customer feedback on those points; (b) talking to employees who interact with customers at those touchpoints; and, (c) asking customers at those points for feedback.

To explain, a customer “touchpoint” is any occasion when you communicate to or interact with customers like a website, marketing materials, phone service, in-store and so on. A touchpoint can include a 1-way or 2-way dialogue/connection. For example, customers have an experience on your website – they might find it helpful, easy to use, or hard to navigate, missing key information and frustrating.

Satisfaction does not reveal loyalty or measure experiences

Many are tempted to think that customer satisfaction surveys and results tell the full story. They don’t. Customer satisfaction surveys do not measure or reveal if customers had a positive experience. They measure past satisfaction and do not equate with loyalty or the potential to spread positive word of mouth like a positive customer experience will.

If you track and measure the customer experience you can get a faster read on the health of your business. Gallup has done much research on this and the worldwide consulting group Peppers & Rogers has affirmed the power of the customer experience as well. The latter group has published a book called Return on Customer with an intriguing proposition on measuring and understanding the value of your business in a whole new way.

To track the customer experience, revisit the touchpoint exercise above. If you can capture feedback about the experience (meaning, ask specific questions not general satisfaction ones) at the touchpoint or soon after that is the best way to see how it’s going.

Lastly, I propose that shifting a percent of marketing and advertising dollars toward customer experience management will help a business grow faster and for less money than maintaining a large focus on customer acquisition without any focus on customer retention and relationships over time. For example: shift 15% of your customer acquisition budget (advertising, trade shows) to improving customer experiences (increasing training and compensation for front-end employees, improving web customer service, upgrading systems so you can provide seamless higher quality customer service or whatever might have the most impact on your customers). When you shift, track a few key variables and see what happens to customer retention, satisfaction and more. You will see a difference. Oh, and check your bottom line, too.

More and more businesses are doing just this.

Most people have heard that it is five times more expensive to acquire a customer than to keep one. That needs to be an increasing focus of businesses focused on growth – customer retention and loyalty. You can grow and save money, too.

Kim Proctor is a Customer Relationship Specialist with Customers That Click who has 12 years in developing marketing with a special focus on customer loyalty and evangelism.