Customer Experience (CX) focuses on how your customers feel about every interaction they have with your business. As a CEO, if you still believe that all you need is a great product and a good price, then your customers will leave you…
Why? Because they may just feel like it!
We are living in the age of an Experience Economy, where experiences are more valuable and important to customers than anything else. This is because products, services, prices and special offers can all be copied and reproduced. These can no longer differentiate your business from your competitors.
Experiences, however, can.
The Hot Dog Example
In a Ted Talk, ‘The Secret Ingredients of Great Hospitality’, Will Guidara, describes a story from when he was working in Manhattan’s Eleven Madison Park that got the restaurant the title of the best restaurant in the world in 2020.
As Guidara describes, the restaurant is “very fancy. We’re talking servers wearing suits and ties, like crisp, ironed white tablecloths. More than 30 cooks in the kitchen serving 10-15 course tasting menus.”
He goes on to explain, “Our kitchen served unbelievably delicious and incredibly innovative food. Our service was so gracious and as close to technically perfect as possible. And our dining room is one of the most beautiful out there.”
As a result, they were consistently one of the top 50 restaurants in the world. “But it was a hot dog that earned (them) the number one spot on that list.”
He explains that it was ‘unreasonable hospitality’ that got them there, and it was simply turning ordinary transactions into extraordinary experiences.
“In early 2010, on a busier-than-normal lunch service, I was in the dining room helping out the servers, when I found myself clearing appetisers from a table of four foodies on vacation to New York. And they were going to the airport to head back home after their meal. I overheard them talking. ‘What an amazing trip! We’ve been to all the best restaurants. Per Se, Le Bernardin, Daniel, Momofuku, now Eleven Madison Park. But the only thing we didn’t get to try was a New York City hot dog.’”
“You know those moments in a cartoon when the animated light bulb goes off over the character’s head, signifying they’re about to come up with a really good idea? If you’d been in the room with me that day, you would have seen one appear over mine. As calmly as I possibly could, I walked gracefully back into the kitchen, dropped off the plates, and then literally ran out the front door and down the block to the hot dog cart. I bought a hot dog and ran just as fast back into the kitchen.”
“Now came the hard part, convincing the chef to serve it in our fancy fine dining restaurant. He looked at me like I’d lost my mind… Eventually, he agreed to cut the hot dog up into four perfect pieces, adding a swish of ketchup and a swish of mustard onto each plate and finishing them with a quenelle of sauerkraut and a quenelle of relish. Then, before we served the table their final savoury course, we brought them their hot dog.”
“To make sure you don’t go home with any culinary regrets, a New York City hot dog.”
CX vs CS
Customer Experience is not Customer Service. Customer Service is functional and technical – it’s the agent on the phone trying to help your customer find their lost package. It is reactive compared to CX which is proactive. Creating a customer experience strategy allows you to put a process in place that will ensure that your customers keep coming back, spending more and encouraging others to do the same.
You need to understand that CX is ultimately a long-term initiative that has the potential to bring very high results if implemented fully within the company. CX focuses on the relationship your customers have with your company – it might surprise you that every interaction, no matter how small, affects how they feel about you and ultimately if they are willing to do business with you.
This is why creating the distinction between the two and gathering a team dedicated to designing, optimising and implementing CX strategies is crucial to your business success.
If you don’t realise the importance of CX now, your churn and marketing costs will inevitably get higher as you spend more and more on acquisition rather than retention and advocacy.
Increased profitability
We have many articles and information guides on the benefits of CX. Increased loyalty, advocacy, differentiation, increased lifetime value, and reduced churn are just some of them.
However, it all comes down to increased profitability and shareholder value. A great example of a company that delivers a great customer experience is Calm. Calm is a meditation app that aims at every step to meet users’ wellness needs. In 2021, when the user data indicated that the usage spiked before bed, the app launched “Sleep Stories”, which included celebrities like Kate Winslet reading, claiming bedtime stories for adults.
According to Tellus International, “The change also contributed to a boost in sales, with revenue in the first quarter of 2021 totalling $23.2 million, up from $19.7 million the year prior according to Statista.”
Later Fact Company named Calm as one of 2021’s most innovative companies.
This example shows that listening to your customer’s needs and delivering the value they expect can have enormous financial benefits.
The Statistics Don’t Lie
Whether you want to believe it or not, CX is here and here to stay. Customers are now willing to walk away from companies just after one bad experience – without a single complaint.
Here are some top statistics about customer experience for 2023:
- Of companies that focus on CX, there’s an 80 percent increase in revenue (Zippa)
- Customer-centric brands report profits that are 60 percent higher than those that fail to focus on CX. (CX Index)
- 90% of businesses, regardless of the vertical they are operating in, have stated that they have made CX their primary focus. (Oracle)
- 41 percent of customer-obsessed companies achieved at least 10 percent revenue growth in their last fiscal year, compared to just 10 percent of less mature companies. (Forrester)
- 73 percent of customers now say CX is the number one thing they consider when deciding whether to purchase from a company. (PwC)
- 49 percent of customers who left a brand to which they’d been loyal in the past 12 months say it’s due to poor CX. (Emplifi)
- Consumers are willing to pay a 16% price premium in return for a superior customer experience. (CX Index)
- More than 70% of people state that they would recommend a product or service following a pleasant experience.(CX Index)
- 42% of customers are willing to pay more when offered a friendly, more welcoming customer experience. (Zippa)
- 72% of customers will share a positive experience with 6 or more people. On the other hand, if a customer is not happy, 13% of them will share their experience with 15 or even more (Esteban Kolsky)
As you can see we live in an age where experiences matter more than price and product. So if you are wondering if investing in CX is worth it – it is.
Read more: The Experience Economy
If you would like your business to succeed and your CX initiatives to be successful, enrol your staff today in our Professional Diploma in CX or contact jessiaca@thecxacademy.org for Tailored Team Training opportunities.
