Customer Experience Influence Report

What makes a tangible difference to how customers perceive your organisation, differentiates it from other businesses, supports growth, creates advocacy and market leadership?

Superior Customer Experience.

Here we look at the hard benefits of delivering a great Customer Experience (CX), plus the metrics that really matter when it comes to measuring your CX.

Most forward-looking organisations aim to deliver a great customer experience. As well as driving sales, it makes sense to delight customers to encourage repeat purchasing. But the benefits of delivering a great CX go much deeper than sales metrics – it manifests itself in a company’s ability to win and, most importantly, retain loyal customers.

The digital age has made it much easier for customers to flip brands, putting customer loyalty at an all time low. Connectivity has also put a huge array of competitive company offerings at customers’ fingertips. With so much choice, customers, quite rightly, want a positive connection with brands at every step, from first contact through to purchasing and post-sales services. In fact, evidence shows that customers favour doing business with companies providing great CX over price.

Here is a recent example of how great CX influences customer loyalty. Figure 1 shows how UK sectors are performing in terms of customer loyalty and recommendation.  

Customer Loyalty vs. Recommendation – UK Sectors (Fig. 1)

Our cross-sector customer satisfaction research shows that sectors focused on delivering a compelling CX benefit from high levels of customer loyalty and recommendation. In a world of consumer choice, these characteristics are invaluable when it comes to building sustainable business success. Beyond positive sales figures, loyalty and recommendation bring:

• Customer advocacy – Customers dedicated to your brand and who take every opportunity to promote you in person and online
• Price insensitivity – Customers who buy from you regardless of price as they’re 100% confident in your brand experience  
• Direct referrals – New customers onboarded due to referrals from satisfied customers
• The Customer’s ear – Unlike new customers, loyal customers are already switched on and alert to your marketing campaigns and promotions, encouraging repeat sales and ‘customer stickiness’ (customers who repeatedly come back to your brand)   

CX – The sectors getting it right (and how they do it)

Our benchmarking research shows that Online Retail received the highest customer loyalty and recommendation metrics over the last 24 months.

A sector primarily led by Amazon, statistics show the online retail giant increased its market share to 30.1% and accounted for $30bn in sales in 2019. One of the ways it maintains market control is continuously refining its CX to exceed customer expectations.

Amazon strive to deliver at every touchpoint, combining frictionless processes with innovative technology to manage stock availability and super-fast delivery networks. They have also taken customer support services to another level, differentiating with free, no quibble returns on most items. It’s also carved a reputation for CX disruption, continually experimenting with the user experience and adding more products and services to make it more compelling for customers.  

Traditional retailers, such as John Lewis, M&S and Next are also impacting online retail by successfully combining digital and physical offering to create a simple, succinct CX. A key part of their achievement comes from their commitment to listening to their customers’ preferences and using them to craft genuine cross channel experiences, helping boost loyalty and recommendations.  

UK Supermarkets are also attracting high levels of customer loyalty in online shopping due to supplementing their high street presence with food delivery services. Facing tough competition from low-cost rivals Lidl and Aldi, major supermarket chains such as Sainsbury’s, Tesco and Asda are innovating at breakneck speed to enhance their online CX. Alongside offering customers round the clock delivery slots, many are using technology to iron out common customer gripes, such as enabling people to reject product substitutions and providing near-instant refunds.

Supermarkets are also increasingly using data analytics to better understand customer behaviour and flex their customer experience accordingly. For example, interactions with supermarket delivery drivers can have a huge influence on customer satisfaction outcomes and are a key differentiating touchpoint that can – depending on how they play out - either drive (or dampen) customer loyalty. In the race to deliver great CX, these interactions are still in effect being moulded. Navigating them from the customer perspective – and finding out what customers really want at handover - will help supermarkets develop meaningful, positive connections that resonate with customers, increasing loyalty.              

Higher Customer Satisfaction = Higher Customer Loyalty

Many companies struggle with measuring their CX in clear, quantifiable terms. This is vital if you want to get a clear picture of how your customers really feel and to measure the impact of improvement actions.

Our cross-sector benchmarking analysis evidences that the truest dominant indicator of the ideal CX is Customer Satisfaction. When customer service interactions generate customer satisfaction this creates customer loyalty, the more your customer needs are understood, the more opportunity exists for delivering higher levels of satisfaction.

Figure two below illustrates the close relationship between customer loyalty and customer satisfaction. Organisations in the sectors delivering a great CX (Online Retail, Supermarkets and Retail) also maintain high levels of customer loyalty.

What do customers want in a great CX?

The chart below (figure three) identifies one of the most dominant attributes of customer satisfaction we see when researching customers’ perception of their ideal CX.

This example relates to Customer Service – a department typically at the sharp-end of customer queries and issues – it has a strong direct influence on overall customer satisfaction and loyalty.

Our research shows that the characteristics customers expect (and value) the most in a Customer Service team are:

• Knowledge of the service/product
• Empathy
• Customer focus
• Patience and flexibility
• Language skills

Customer Service Satisfaction vs. Customer Loyalty (Fig. 3)

The chart also shows how customer satisfaction with customer services affects likelihood of repurchasing. Here we see the powerful influence customer service satisfaction has on customer loyalty.

In short, higher customer satisfaction equals higher levels of repurchase behaviour.

The only sector disputing this trend is Distribution where the data shows lower levels of satisfaction and higher levels of re-use. This relates to the fact that many core online retailers rely on only a handful of distribution organisations. Removing customer choice about the delivery company they use creates low levels of satisfaction with the distribution company but doesn’t impact the likelihood of them re-using the online retailer.

With customers’ seeking out companies providing stand out CX, it will be interesting to see if the quality of delivery starts to affect customers’ choice of online retailers? While Online Retail is the highest performing sector, its hyper competitive, fast-moving landscape means there is no room for CX complacency; every touchpoint needs to be viewed as a chance to impress and differentiate from competitors to get ahead.

Customer Effort is critical to a great CX

Our research reveals the following high-level customer comments relating to customer service interactions:

Our insights demonstrate that sectors delivering high satisfaction across service, relationship and product attributes are also likely to deliver frictionless interactions, with sentiments such as ‘quick’, ‘easy’ and ‘efficient’ featuring strongly in customer feedback. 

Customer Effort Scores (CES) – how much work a customer needs to put in to reach their desired outcome – are a key indicator of the health of your CX. The chart below (figure four) shows how customer recommendation levels are influenced by the amount of effort customers perceive they need to put in to get what they want from customer services.

Customer Satisfaction Scores (CSAT) vs. Customer Effort vs. Customer Recommendation (Fig. 4)

Figure four shows the direct impact of customer effort on customer satisfaction and recommendation outcomes. Put simply, the more effort a customer needs to exert, the more satisfaction declines. Online Retail and Supermarket’s focus on designing effortless transactions and touchpoints which make customers lives’ easier are clearly rewarded with high customer satisfaction and recommendation ratings.  

Challenges relating to customer effort are captured in the comments below.

Our research shows that a lot of customer frustration stems from customers feeling they aren’t being listened to, being talked over, being rushed, or being given an inconsiderate response.

Effective listening is a valuable skill for customer service teams and one that is easily trainable. Restaurants, Hotel and Leisure and Airline sectors often incorporate active listening training helping customer service teams engage customers and resolve issues effectively, in turn raising customer and employee satisfaction.

How to measure your CX

While short indicator surveys are useful for providing high level ‘snapshots’ of customer satisfaction and customer comments give a ‘point in time’ understanding, our cross-sector analysis and CX research shows that real, transformative insights come from looking at all relevant CX metrics at play.

Taking time to understand the features of Customer Satisfaction, Customer Effort, Loyalty and Recommendation metrics, how they interact with each other and their impact on customers and their buying behaviours, allows you to make targeted, impactive changes to your CX, creating an experience that customers value, come back for and are willing to pay more for.

FREE Benchmark Evaluation Offer

What’s the reality of your CX? Our customised CX research teases out the CX metrics that matter, giving clear understanding of your customer needs and where to focus effort for the best ROI. To test the performance of your CX, we’re offering a free sample of your sector’s customer satisfaction scores, plus other relevant CX benchmarks from our latest data set. To find out more, or any other aspect of our CX research, contact me today here on LinkedIn or email: [email protected]