3 Ways Great Customer Experiences Boost Sales
Hardened sales veterans may hear the expression "customer experience" and shrug or scoff. What has it got to do with them, they may ask? A lot -- because it can add dollars directly to their commissions checks.
Granted, they may not be the ones creating the experiences -- although sales does indeed play a role -- but they certainly should be cognizant of the importance of customer experience, because it has an impact on their success.
The nature of the experience varies from vertical to vertical, and certainly between B2B and B2C sales. However, there are three specific ways that meeting or exceeding customer expectations and desires has long-term repercussions on sales results.
The customers you win today are going to be the ones who propel your growth in the future.
Repeat customers spent much more than new customers, found a seminal Bain & Co. study on the value of loyalty. Depending on the vertical, B2C customers spent between 23 and 67 percent more in months 31 to 36 of a relationship with a company than they had in the first three months of that relationship.
A business that can make all of its customers repeat customers for just one more month can achieve an additional 3 percent of annual growth, according to Karl Stark and Bill Stewart.
If it can retain its customer base for four additional months, it can create double-digit growth without acquiring a single new customer.
There's plenty of math to support the idea of retention as the secret to success. In the emerging subscription economy, there's even more reason to work hard for retention; in a SaaS business, it takes about three years for each customer to become profitable. Every customer lost before 36 months has elapsed actually costs the seller money.
Want to keep customers around? The single best thing you can do to encourage that is to create a great customer experience -- one appropriate to the customer's needs and desires.
A commitment to customer experience results in up to 25 percent more customer retention -- and revenue -- than sales or marketing initiatives, Mark Murphy and Emmett Murphy wrote in Leading on the Edge of Chaos.
New customers are important, too! If you want to grow at an accelerated rate, they're critical, and a certain amount of customer acquisition is vital to account for the natural attrition of your customer base. The good news is that the cultivation of new customers is made easier and more effective by the same customer experiences you create to keep customers loyal.
Creating a good buying experience is always helpful, especially since customers' peers frequently ask their opinions about buying decisions. That was true 10 years ago, and it's even more true now in the social media era: Customers today can reach out to people they have never met for suggestions and evaluations of businesses they're considering patronizing.
The social era also has caused a flip-flop in the experiences customers share proactively.
It's no mystery. Closing new business is easier if your company creates a customer experience that lays the groundwork.
The Next Wave of New Customers
Many customer experience gurus talk about "delighting" customers. That's a nice objective in some cases. In others, what customers want is a quick and frictionless sale that allows them to get back to business. From a tactical point of view, though, an emphasis on creating great customer experiences is critical to improving them going forward.
That's self-evident, really, but it's often overlooked. You should be looking constantly for ways to raise the bar on customer experience. Looking ahead, this concept surely will become more deeply rooted in business thinking. Standing pat on today's customer experience will result in a substandard one a few years from now, and that's when your competitors will leapfrog you.
The secret is to engage in a constant customer conversation. Former New York City Mayor Ed Koch was famous for asking his citizens, "How am I doing?" Find ways to ask your customers that question. Simple, short polls are a great tool, allowing you to assess your performance and discover what you might be able to do to make things better in the future.
Customers want to be consulted on matters of customer experience. Better yet, they want to see their input transformed into actions that improve their experiences in the future. That, perhaps, is the ultimate customer experience: being heard and valued by the seller. It's one that can create better experiences in the future, amplifying the effects on loyalty and word-of-mouth.