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What makes customer experience so crucial
There has been a lot of talk lately about customer experience. In fact, according to Gartner, over 80% of marketers expect to compete mostly or entirely on customer experience. But what does this actually mean? And what is the impact this trend has for mid-market companies?
Ultimately, the customer experience is the collection of all interactions a customer has with a brand throughout their ongoing journey and relationship leading up to, through, and beyond a transaction. Primarily enabled by technology, those brands that design, deploy, and evolve positive customer experiences throughout the entire journey reap tremendous benefits in the marketplace – as well as find new opportunities to reduce business efficiencies and create new areas of value. In fact, businesses that lead with the customer experience find that:
- 74% of consumers are somewhat likely to purchase on the customer experience alone (Forbes / Arm Treasure Data)
- Consumers will pay a 16% price premium for great customer experience. (PwC)
- CX drives over two-thirds of customer loyalty, more than ‘brand’ and ‘price’ combined. (Gartner)
- Executives say the top benefits of digital transformation for customer experience are improved operational efficiency (40%), faster time to market (36%) and the ability to meet customer expectations (35%). (PTC)
Understanding this in the mid-market is where real opportunity lies. Leading with the mindset of customer experience, businesses create new competitive advantages that truly set themselves apart in the marketplace. There is a trend where smaller, more nimble companies in the mid-market space exploit key areas of pain for customers and the industry, building a moat that not only differentiates, but increases their value and profitability in the marketplace.
REMOVING PAIN POINTS
Let’s face it, there are certain aspects of a customer journey in certain industries that customer’s absolutely hate—whether going into a store, applying for financing, or other issues. These pain points become moments of avoidance, defection, or drop-off while doing business with a brand. However, they have also become opportunities for disruptors or competitors to create new value. Many of these pain points are created by years of legacy or silos coming together to create a business process, not necessarily to create a positive customer experience, rather creating moments of pain.
On a micro-level, there are some companies that are taking these pain points and building entire businesses around solving them:
Uber: Uber didn’t create the taxi industry, but they took the chore of calling one, blindly waiting for it to arrive, and often having a poor riding and paying experience and built a lucrative business around it. Uber transparently connected riders with drivers in a seamless click of a button, giving the power to the consumer with a simple question “Where to?”
Casper: Casper didn’t set out to make a superior, innovative mattress. They set out to solve the chore of buying a mattress—going into a store and laying on a mattress while a sales associate awkwardly stands over you explaining how comfortable you are. Casper changed this behavior by connecting different technologies together (bed in a box, e-commerce, and large item logistics) and put the experience behind a click of a button and a 100-night product trial guarantee.
Warby Parker: Warby Parker didn’t create eyeglasses, but they made getting stylish, high-quality eyeglasses accessible. In the face of a near monopolistic industry, Warby Parker did a few things to solve consumer pain points. They changed the pricing structure by reducing the amount of markup and overhead for their products. They changed how consumers tried the products by offering five pairs for in-home trial, only sending back the ones you don’t like. They also used technology to take this a step further in offering online vision-screening and augmented-reality product trials.
On the flip side, there are moments of cherish that companies are capitalizing on to drive brand affinity and growth. This opens the aperture of how we should be viewing our consumers and how we should be interacting with them. Once the pain points are removed, the next phase of growth is immersing the consumer into the brand promise in a way that continuously fulfills the relationship between the brand and consumer. For example:
Airbnb: Travel is a massive passion point and Airbnb has gone beyond its core service offering of lodging. It provides its consumers with local experiences and journeys. These are provided throughout the shopping process and beyond purchase, giving a holistic experience that goes beyond the product.
Glossier: Glossier has built its brand off the back of a highly successful blog, providing products and experiences for their fanatical readers. The core of its brand is really built around a skincare routine, but each element of the experience from learning about your personal routine, to shopping, to unboxing, to insider physical events creates moments of joy for their customers. Glossier continues to grow its base by fulfilling its brand promise with each touchpoint, listening to, and connecting its brand to the needs of its customers.
All in all, mid-markets have a massive opportunity to deliver new value propositions in the marketplace while reducing or eliminating business efficiencies for maximum profitability. By leading with the customer experience and enabling key interaction points with technology, mid-market companies can create competitive advantages that their larger competitors wouldn’t be able to match with speed, agility and decision-making advantages going to mid-market companies.
This article was first covered in Nasdaq.