8 Data Points about the Importance of Customer Experience

I was asked to prepare some background information on the importance of delivering a positive customer experience, and I thought I would share some of the research with you.

How much does the market reward companies that deliver excellent customer experience? Consider that the Fortune list of the world’s 10 most admired companies in 2013 includes seven that are renowned for excellence in that area: Apple, Google, Amazon, Starbucks, Southwest, Disney and FedEx. The world’s two most valuable brands – Apple and Google – are considered world-class.

Recent research worth noting:

  1. Dell has published internal metrics showing that 97% of dissatisfied customers can be rescued with proactive intervention and more than 40% of those people actually become raving fans.
  2. Siegel+Gale’s 3rd annual Global Brand Simplicity Index reported last year that nearly 1/3 of American consumers would be willing to pay an average of about 4% more for simpler brand experiences.
  3. Gartner estimated last year that by 2014 “failure to respond via social channels can lead to up to a 15% increase in churn rate for existing customers.” You have to wonder why one-third of large corporations still block social network use by their employees.
  4. Research published by Temkin Group last year reported that only 7% of the 255 large companies it surveyed could be described as reaching the highest level of customer experience maturity, although nearly 60% said their goal is to be the industry leader in customer experience within three years. That’s gonna be a tall order.
  5. A July, 2013 Lloyd’s survey of 588 C-suite executives found that customer loss was their second biggest concern, exceeded only by worries about high tax rates. Respondents also indicated they are under-prepared to address this risk, with executives giving themselves only a 5.7 rating on a 1-to-10 scale (see chart below).Areas of Biggest Business Risk As Defined by CEOs
  6. Sixty-two percent of B2B and 42% of B2C customers purchased more after a good experience, while 66% and 52%, respectively, stopped making purchases after a bad experience, according to a recent survey of 1,000 people who had had recent customer service interactions. The research also indicated that customers are somewhat more likely to share bad experiences through social networks than good ones.
  7. Executives talk the talk but still don’t walk the walk. An Oracle survey of 1,342 senior-level executives from 18 countries earlier this year found that 97% agree that delivering a great customer experience is critical to business advantage and results, and that the average potential revenue loss from failing in this area is 20% of annual revenue.  However, 37% are just getting started with a formal customer experience initiative, and only 20% consider the state of their customer experience initiative to be advanced.
  8. A survey of 2,000 adults last year found that 83% are willing to spend more on a product or service if they feel a personal connection to the company. One-fifth said they would spend 50% more on companies that they felt the company put the customer first.

The Smart Device Revolution Is Just Beginning

I spotted a promotion this morning for a smart tag you can now attach to items that you never want to lose. It emits a Bluetooth signal that a smart phone app can pick up so you can always track them down. It’s a terrific idea and another example of how the Internet of things is going to transform so many markets.

Smart Revolution E-Book CoverCoincidentally, Christina Kerley just sent a copy of her new e-book, “The SMART Revolution.” It’s a 17-page compendium of products that are rewriting the rules of entire businesses by embedding intelligence into everyday things.

For example, hospital workers can now wear a wristband that reminds them to wash their hands and monitors their diligence in doing so (if this sounds Big Brother-ish to you, ask yourself if you wouldn’t prefer to be a patient in a hospital that used it). There’s a device you can attach to a golf glove that gives you feedback on your swing and several examples of devices that monitor your health to help you or your doctor make more informed decisions.

There are several other wonderful examples in the 17-page e-book, which is free on Christina’s site.

I think we’re only in the first innings of understanding the revolutionary potential of smart mobile devices and how they will enable us to crack big problems that are too expensive to solve by other means.

Waze screen shotI’m using the popular Waze app on my phone to make me a smarter driver. Waze tracks data coming from nearby users and alerts me to problems ahead. It has become an essential utility for me when driving more than a few miles, particularly at rush hour. On several occasions, Waze has redirected me to routes I never knew existed to get me around traffic jams. It taps into the experience of each driver on the road to the mutual benefit of all.

While most of us use our smart phones primarily to read, text and perhaps play games, their potential is so much greater. When tied to a network, they become utilities that tap into information all around us to make us healthier, more informed and more efficient.

Back in the 1980s several states experimented with traffic monitoring systems that involved embedding sensors in roads. The systems proved to be too expensive and fragile to be practical. Today we’re solving these kinds problems not by changing our infrastructure but by tapping into the devices that people carry with them. This is a vastly cheaper, more reliable and more flexible approach than the ones envisioned just a couple of decades ago.

I think you’ll find Christina’s e-book fun and thought-provoking. Get it here.

Attack of the Customers Roundup, July 25, 2013

Recent stories of customer attacks, bad business behavior online and advice on how to prevent the latter.

Don’t ignore customer service on social media

Social media gets discussed ad nauseam as a marketing tool, but it does have other business applications. In the case of customer service, that’s something apparently ignored by many businesses.Only 44 percent of the top 25 online retailers respond to complaints on Facebook within 24 hours according to the data compiled by Desk.com. 
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3 Easy Steps To Turn Business Failures Into Customer-Generating Positive Case Studies

Ever go public online with something your brand will regret later? Alas, it’s human nature. But there are ways to combat that! The plain fact is, we all have the ability to knee-jerk ourselves into orbit a wee bit past the Alpha Centuri moon. I do it, you do it, we all do it. The challenge is to sit on your hands until that extraordinarily compelling urge *disappears* so you can comment without being in the red flare of unstoppable…
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Revisiting the Facebook ‘Other’ folder disaster

Facebook has a folder for messages into which it unceremoniously dumps email from people who don’t normally contact you. Because hardly anyone ever checks this “other” folder, many very important messages to missed. Every once in a while, a writer will ask his readers to go check their “Other” folder to crowdsource the discovery of surprising messages that have been sitting there. Recently, New York Times columnist David Pogue asked the question, and the…
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Slow Social Response Times Prove Annoying to Millennials

A growing number of consumers around the world are contacting brands through social media channels, to the extent that customer service and audience engagement is now seen as one of the top organizational areas where social tools carry the most heft. Results from a new study [download page], conducted by Havas Worldwide, suggest that consumer expectations are high for social responsiveness, and that brands that fail to meet those expectations risk alienating a large portion of consumers. 
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Attack of the Customers Press Release

I’ve read thousands of press releases over the years but don’t believe I ever wrote one until now. It was more difficult than I expected! Links and tweets are appreciated, but Amazon reviews will get you undying devotion.

New Book Explores Recent Epidemic Of Online Customer Assaults on Businesses

 ‘Attack of the Customers’ Helps Marketers and Business Owners Manage and Prevent Reputation Threats Carried on Blogs and Social Networks

Attack of the CustomersCustomers are taking their complaints about companies and products to the Internet in record numbers, and a new book tells what is driving this trend and how businesses can avoid being victims of customer attacks.

Attack of the Customers,” by award-winning author Paul Gillin and customer relationship management pioneer Greg Gianforte, arrives as online attacks are becoming a top concern for business and government leaders.

“A lot of attention has been focused on social media’s capacity to aid in awareness, marketing and positive brand perception,” said co-author Paul Gillin, “but little has been written to date about its dark side. Brands have been piling into Facebook expecting to reap a bounty of positive PR, but they forget that these channels can be used to tear down as well as to build.”

Recent research has shown that 70% of large companies have experienced an attack on their reputations during last two years.“Decision-makers believe that social media has made managing crises more difficult and more expensive,” Gillin said. “We wrote this book to address the increasing need for corporations to understand how people express dissatisfaction online and how to distinguish between everyday complaints and potential crisis scenarios.”

Attack of the Customers analyzes the motivations and goals of people who drive negative campaigns and offers guidance for how to respond to and prevent online attacks. Using dozens of case studies from consumer and B2B brands, the book classifies attackers into four categories – Casual Complainers, Extortionists, Committed Crusaders and Indignant Influencers – and provides coping strategies for dealing with each.

The book also documents step-by-step how some recent notable attacks developed and the critical factors that transformed them from minor brush fires into international news stories.

Capacity to Destroy

Attack of the Customers analyzes customer-driven negativity campaigns like the 2010 Pampers Dry Max Facebook crisis and the 2012 beef-industry “pink slime” hysteria to identify lessons brand owners can apply to understanding customer motivations and preparing response strategies. The book also looks at the growing influence of online customer reviews sources like Yelp and Amazon on businesses ranging from electronics to hospitality services and tells how business executives can use peer reviews to their advantage.

Readers will learn:

  • Why businesses’ common responses to customer complaints often make matters worse;
  • Why complaining customers are some of an organization’s most valuable assets;
  • How vocal critics can be turned into raving fans with an active response strategy;
  • How to organize a team to identify and respond to attacks in minutes; and
  • How to create a culture that puts customers first.

“Delighting the customer is the only sustainable source of competitive advantage today, because product differentiation is fleeting and price differentiation is unprofitable, ” said co-author Greg Gianforte. “Failure to deliver exceptional customer experiences is simply failure.”

Attack of the Customers is available through major online retail outlets and in Amazon Kindle format. Learn more at AttackOfTheCustomers.com.

About The Authors

Paul Gillin, co-author, Attack of the CustomersPaul Gillin is a writer, speaker and online marketing consultant who specializes in helping businesses use content to reach customers. A popular speaker and writer, he has addressed more than 150 conferences and groups and published more than 200 articles about social media marketing since 2008. His four previous books about social media and online communities include The New Influencers, Secrets of Social Media Marketing, The Joy of Geocaching and Social Marketing to the Business Customer.

Paul is a columnist for BtoB magazine and a director of the Society for New Communications Research. He blogs at PaulGillin.com and NewspaperDeathWatch.com.

Greg Gianforte, co-author, Attack of the CustomersGreg Gianforte has started five successful software companies. He founded RightNow Technologies in 1997 with a mission to rid the world of bad experiences. The company enjoyed 15 years of continuous growth. At the time of its sale to Oracle in 2011, it had more than 2,000 large customers, 1,100 employees and $225 million in annual revenue.
Among his awards are Ernst & Young’s Pacific Northwest Entrepreneur of the Year and the Leader Award from CRM magazine. He was inducted into the CRM Hall of Fame in 2007. His books include Bootstrapping Your Business and Eight to Great: Eight Steps to Delivering an Exceptional Customer Experience.

Contact information:

Paul Gillin

508-656-0734

paul@gillin.com

Twitter: @pgillin

Greg Gianforte

greg.gianforte@gmail.com

 

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