Virtual CX Summit

Why Measuring Customer Experience Matters: Here are 7 Reasons

Why Customer Experience matters and how to measure it

Thanks to the emergence of social media, news spread fast and bad news go viral even faster than the time I took to write this sentence.

The advancement of social media and communication technology is the reason most of the businesses, marketing experts, and executives emphasize that customer experience is the backbone of any marketing program.

For any business, small or large, every customer is an asset, without which companies would have no business at all.

Reputations are at stake, marketing paradigm is evolving fast, and businesses that are investing in improving customer experience are already leaping ahead of their competitors.

Hence businesses need to leverage their customer experience irrespective of the product or service they sell. Putting a focus on customer needs will help business in several ways, one of which is creating a reliable customer base.

Since the buyers today have so many purchasing options and substitutes, SaaS businesses in no way can afford to ignore the importance of providing additional values to their buyers. 

Here are the 7 reasons explaining why customer experience matters:

1. Customers respond better to relationships than promotions and advertisement 

It’s human to value a relationship more than a marketing tool like an advertisement. When a business values the consumer experience, they start valuing everything they feel, hear, smell, see, and touches while interacting with your business.

This way, they build a relationship with them. These customers will become a part of your loyalty club and start responding to every initiative the business takes to strengthen the relationship.

For example, if you are purchasing an office collaboration software subscription from the same company, it’s mainly because you have a relationship with them. You know what quality to expect, where to navigate to find a product, and which discount coupon to avail.

2. Consistent good customer experience assures greater return of investment

A recent study conducted on brand management and marketing states that in the coming years, nearly 89% of the businesses will compete in their respective industry on the basis of customer experience.

Consistency is the key here. You cannot assume that being nice to your customers on the first few days and then stay loyal to your brand forever. If you want more, you have to give more.

Hence, a consistently executed customer experience is one of the best strategies for increasing ROT, improving loyalty, and enhancing retention as well.

3. Customer Experience is directly proportional to Customer Satisfaction

One of the surveys conducted by McKinsey concluded that enhancing customer/user experience has the potential to enhance user experience as well. It results in revenue increase by 15% while lowering 20% expense of branding messages or promotions.

With that being said, businesses cannot ignore the importance of regular interaction with the customer, and it should be both in terms of user experience and support mechanism.

4. Enhanced customer experience means a competitive advantage

Customer experience is the marketing tool that can offer a sustainable competitive edge to the companies. This is indeed the best ways of standing ahead of the competitors.

While a business can adopt several marketing tactics to attract new customers, a business cannot sustain retention merely by offering lower prices.

Slack and Skype are one of the best examples to consider. Both companies started selling their services at a cheaper rate in the beginning and earned the consumer trust by offering superior user experience. They went out of their way to meet the user demands for office collaboration. Both these companies have received a competitive advantage over their rivals because their prime focus has always been CX.

5. Good customer experience reduces the customer churn

It’s a known fact that the cost of acquiring a new client is twice the money spent on retaining the existing customers. Hence, for businesses, one of the most important strategies is to take measures that can help the company create a platform where customer retention is not a problem.

A customer who is satisfied with the service quality, user experience, and brand preferences will stay with the company and is also unlikely to leave the brand for factors like high product pricing.

Hence, great customer experience is a tool many small and large companies have been using to reduce customer churn. By assuring an enhanced customer experience, these brands promise everything that a customer demands from the service provider. The brand also saves of recurring customer service programs meant for acquiring new clients.

6. Word-of-Mouth (WOM) Publicity Beats Everything

Delighted customers are best brand promoters. Customers who are satisfied with the customer experience always add to the revenue through positive word of mouth referral and incremental sales. Both of these things help the brand add more value to their services or products in terms of sales.

This sort of publicity from buyers or current consumers paves a way for new customers, who also become a brand advocate for the company.

7. Customer Experience reinforces brand preference

It’s always easy for consumers to switch brands once they realize they are not delighted with the services/product provider at present – this makes the customer experience a crucial component for the brands. A poor experience will ultimately impact the bottom line and cost a brand

Hence, more and more companies are investing in this and taking initiatives to improve CX for reaping all the above mentioned benefits of customer experience.

How to Measure Customer Experience Quality

Since Customer Experience holds such a crucial place in the competitive business environment of today, a large group of companies have started using analytics techniques and tools to understand and enhance the customer’s experience. Check out how Google, Facebook and other 8 leading companies collect user feedback to improve their UX and algorithm

Arguably, performance statistics is helpful to conduct a systematic, efficient, and comprehensive analysis of CX. But you can’t find gold without obtaining real customer insights, I’m talking about real customer inputs like their ratings and written feedback.

Funny enough, the process of asking customers for feedback is another CX all together. And the quality of this experience will impact the results of the overall customer experience scores you want to measure. 

So we want to offer some tips on making the experience of obtaining customer experience related feedback (starting to sound like a tongue twister huh!) as easy and as smooth for you and your audience.

1. Employ the right CX metric at the right point of the customer journey

The two widely popular customer experience metrics are Customer Satisfaction (CSAT) and Net Promoter Score (NPS).

CSAT is performance indicator for customer satisfaction typically rated on a 5 point scale ranging from ‘Highly satisfied’ to ‘Least Satisfied’.
NPS is a customer loyalty metric used to show the percentage of buyers who’d recommend a product or service to their family, friends, and colleagues. The score is rated from 0 to 10, and respondents are grouped into Promoters (Score 9-10), Passives (score 7-8), and Detractors (Score 0-6).

But most of the companies use either CSAT or NPS. And this is where they go wrong.

You can, and should, measure both customer satisfaction AND net promoter score. For feature usage feedback, CSAT is very direct for customers to respond to and therefore easily helps you identify the level of usability. NPS is great to evaluate the level of engagement at different stages of the customer lifetime. A common example is to compare a customer’s NPS after first time purchase versus second time purchase.

Ergo, to get an accurate and actionable results, you need to use the suitable CX metric for each purpose and at different customer journey to leverage customer experience.

2. Ask for Feedback at the optimal time

Don’t think for a second that your customers would spend time on a process that will benefit your company. If they are asked to feedback, they will do it in the minimal time. Or not do it at all.

That’s why most of the companies only survey for feedback once a product is sold.

Asking feedback at the right time increases the response rate as well as the accuracy of the feedback. When customers carry out an action, such as putting an item in their basket or create a new post, that indicates a certain engagement and understanding of your service and product. And that is also when an experience is complete.

At Troop Messenger we follow a similar approach for enhancing our CX. We’ve been working extensively to exceed our clients expectations and meet their office communication and collaboration requirement through Troop Messenger. We constantly analyze what our customers need through seeking feedback at the optimal time.

Once our customer ends-up using Troop Messenger as the 30-day free-trial package, our analysts encourage them to take their time for a two-minute survey, and they assess their CX through NPS. For us, the optimal time is ‘post the free trial period’ since by this time, our users have used the product thoroughly and they know the features and functionalities all around. They can be the best judge.

Reaching out at this time gets us more meaningful feedback – the customer at this stage has higher motivation since they just experienced a value of our product.

3. Monitor CX metrics over time

The process of enhancing your customer experience and product usability would most likely be longer than one sprint. It may even take a few quarters to implement the necessary changes and then more time for customers to see a significant improvement.

That’s why it is important to establish specific metrics that can measure and make sense of the outcome. And continuously monitor the customer journey to find refinement points.

Qualitative customer feedback, the comments from your customers or survey answers from user research, can be great guidance for ideas to implement as well as progress reports.

To be able to gather a large quantity of customer feedback and provide an easy and intuitive process, you should look for specialized tools. Usersnap offers a lightweight widget that can be added to your website and application just via a short code or API. And you can connect the feedback tickets to be sent to customer care tools, Zendesk, Intercom etc. Or to project management tools, Jira, Trello etc.

Having a smooth and effortless process is key to make monitoring CX feasible and sustainable. Such tools allow access to analysis dashboards for you to view real-time statistics and the journey-driving metrics in order to identify high-impact areas.

It’s no longer about you. It’s about your customers.

Regardless of your business niches, the customer experience is the most important factor that will distinguish you from the competitors. Achieving superior CX needs a strong strategy, it starts by being proactive in building customer relationships and creating a plan where customers are the king.

Irrespective of how exceptional your brand or product is, the customers will not return if they had a poor experience. You need to turn over all the stones on the customer journey to build a truly exceptional customer experience and to turn them into happy, loyal and advocate customers.

Get started today with one of our customer engagement and experience management experts on a personalized demo.

Or play around Usersnap’s customer rating and feedback collecting tool yourself, free for 15 days.

Md Mohsin Ansari is a Marketing Manager at Troop Messenger – a business messenger that comes with all the requisite features. It is a viable Slack Alternative that is spreading its wings across all industries by bringing all the internal communication at one place. Mohsin is accountable for analyzing the market trends, demographics, and dealing with all promotional and media channels.