When you start a business, you tell everyone about it. Back in the day it happened at the post office and through word of mouth. Then we had flyers and posters, adverts on the TV and multitude of other places you could show your ad, with fingers crossed hoping that your message will be convincing to those who see it.
Now in the day of social media and the google empire, you can target a specific message at a specific person. Except while this method used to work brilliantly, people soon caught up – and now are not so easily influenced by marketing mind-tricks.
This is where CX comes in.
Customer experience is how a customer feels as a result of every interaction they have with a company. From the moment they find out that a company exists to the repeated purchases they will make. More importantly it is another solution for customer acquisition.
Can CX Replace Marketing?
Marketing includes market research and promoting products or services, with the obvious intention to get the customer to buy.
CX and marketing are two completely different fields, which both have business growth and increased profits at its core, however, the main difference is that while marketers work deliberately to get fast results (CTA etc.), CX-ers think long-term.
To aim for CX Excellence means that you aim to exceed expectations at every step of the customer journey. If you do so successfully, you will create loyal customers that will become brand advocates and ultimately the best sales and marketing team you could ever ask for.
At its core, CX is interested in Customer Lifetime Value (CLV). What value is each customer worth, over time, to the company. This is about what the customer spends but also about how the customer behaves and how that customer ‘speaks’ about the company. We call them Advocates.
There is the story of a famous Irish entrepreneur called Pat Quinn. He started Ireland’s first supermarket and invented the term ‘yellow pack’. One thing he always said when he was talking to a customer was that he could imagine a figure of £250,000 written on their foreheads. This was the amount of money they would spend with him during their lifetime! Customer loyalty is important.
Every time a brand advocate is born, they will begin to recommend your brand to others. At that point all the new customers you will gain (through this one customer’s referral) will be through CX, not through advertising.
This is a much more cost-efficient method especially in times when advertising costs are skyrocketing. Since people do not trust advertisements anymore, it is harder to get conversions and thus it costs more.
Psychology of referrals
You find yourself in a coffee shop with your best friends ranting about the mundane troubles of your life, when you receive a phone call. You get excited because you are waiting for a call back from a job you applied for, but the connection is terrible. No signal – in the city centre. You immediately start to complain how your phone provider (Company A) is horrible and you need a new one. Then one of your friends lists all the benefits and amazing things about their one (Company B). She recommends them to you, and simply because you know her for years and you trust her opinion, the next day without hesitation you sign a contract with the telecommunication company B.
This is the power of brand advocacy. As a business owner you should strive to be Company B. How? Through CX!
Bear in mind that referral advertising is not the same as brand advocacy. Referral advertising offers something in return for a person recommending their brand to others. It carries a heavy anchor, with the word ‘Sponsorship’ written all over it. Which brings us back to the same issue of lack of trust. Brand advocates, on the other hand, recommend your company to others for free. They do it simply because they believe that your company is the best and all their friends and family should have the best there is.
This will not be the situation every time. So disregarding marketing completely will not be a smart option either. However, focusing on CX ensures that even when times get hard you will still be acquiring new customers.
According to The book ‘The psychology of Trust’ by KJ Rotenberg, trust is declining. This includes the amount of trust consumers may have in adverts, company intentions, values and staff. Although social media was a breakthrough in advertising, it also provided an easy way for consumers to publicly scrutinise any error a company might make. Every error is an opportunity for you to lose a customer. Unless you have built a strong enough bond with them that they will care to stay long enough for you to fix the mistake.
Our Emotional Piggy Bank illustrates how through CX you can create a bond with your customers that will last even if those errors occur. Potentially increasing the trust between your customers and brand. Check out 6 Factors That Affect Customer Trust to find out more.
So, while advertising becomes harder, more expensive and a victim of declining levels of trust, CX could be just what you need to keep your business progressing and developing in the right direction.
If you would like to learn how to achieve CX Excellence in your business enrol in our Professional Diploma or Certificate courses today!