To succeed in increasingly crowded and competitive marketplaces, companies need to focus on customer experience. Yet so many are taking the wrong CX approach. What can the rise of business texting teach us?
Customers punish companies who provide bad service. One survey found that customers who have a bad interaction with a business are 50% more likely to share it on social media and 52% more likely to share it on online review sites like Yelp.
With surveys like this, it’s no surprise that customer experience (CX) is now top of the priority list for a majority of businesses. A Gartner study found that 81% of marketers expect to be competing based on CX. Heck, the number of CX executives grew more than 1,000% since 2014. If you still aren’t convinced of its rapid ascent, look at this chart from Google Trends depicting growth in people searching for the term “customer experience.”
With such an increased focus on CX, you would expect customers to feel better about their interactions with businesses. The elephant in the room is that research doesn’t support this.
Forrester’s Customer Experience Index is one of the best measures of CX improvement and ranks companies by how successfully they deliver customer experiences that “create and sustain loyalty.” Over the last four years, the indexes consistently show that US brands have struggled to provide quality CX, with the 2017 and 2018 results particularly alarming.
While 2019 results show marginal improvements, 81% of brands remain stagnant. Plus, most industry front-runners are repeats, and many of the gains are too minor to render them statistically significant.
What is going on here? If companies are investing more into CX efforts, and yet seeing little in return, is it time to bail on the concept altogether?
What Is Customer Experience?
The term customer experience is so commonplace that it can be embarrassing to admit you have no clue what it means. You’re not alone––just look at the Google Trends chart above.
When you boil CX down, it refers to the perception customers have of your brand. For example, you might have an award-winning sales and marketing department, but if your product is faulty, then the overall perception of your company is likely to be negative.
Customer experience is the sum of all interactions your business has with a customer. These interactions range from a visit to your website to a phone call with a customer service rep to an in-store purchase.
What matters here is that you must create a consistent and positive perception of your business across all possible customer interactions.
What Is Driving Customer Dissatisfaction?
The Harvard Business Review (HBR) first diagnosed the root cause nearly a decade ago: Delighting customers doesn’t build loyalty; reducing their effort–the work they must do to get their problem solved–does.
Delight took hold as the driving force behind CX projects because it’s easier to create a moment of joy in a customer journey than it is to reimagine an entire way of doing things.
Consider this: If a hotel hands you a couple of free drink vouchers as you check-in, you’ll likely be impressed. If you enter a dirty and cramped room five minutes later, your perception is going to change again, and for the worse. You might even feel angrier, believing you were deceived by the check-in process and gesture of goodwill.
This is an extreme example, but it gives you an idea of how much easier it is to get carried away with arbitrary and, ultimately, meaningless actions. Taking the time to make sure every step of a customer’s journey is effortless and productive involves more than hiring a Chief Experience Officer. It requires rethinking old ways of doing everything.
While companies invest resources into delighting customers, the same customers focus on getting from A to B as quickly as possible. Every time businesses concentrate on one-off moments of delight and ignore fundamentals like timeliness and ease of use, customer dissatisfaction increases.
Four Lessons From the Rise of SMS
A whopping 85% of customers want to communicate with businesses through SMS, and, as a result, text usage for customer service issues will increase by 367%. The rise of SMS as a key communication channel for businesses can teach you four valuable lessons about your overall CX strategy.
1. Texts Don’t Waste Customers’ Time
No matter how smooth you try to make the customer experience, there will always be issues. Be mindful of the customer’s time as you work to solve these problems. Customers don’t want to wait on hold, stand in a long queue, or navigate confusing email threads.
2. Texts Are Low Effort
Your customer can order a pizza, confirm weekend plans with a friend, and open a bank account without looking up from their phone. The more work you make your customers do, the less they’re likely to want to do business with you. With this in mind, you should aim to provide low-effort experiences across the entire customer journey.
3. Texts From Businesses Feel Personal
The emerging trend of personalization––think Amazon and Netflix––is expected to boost profitability rates as much as 59% by 2035. While providing random moments of delight won’t do much, providing a consistent and personalized experience to customers across the customer journey will help you improve your CX.
4. Texts Can Be Used to Anticipate Problems
One of the most frustrating experiences a customer can have is having to make multiple attempts to get in touch with a business about the same issue. But, what if you could do more than just resolve the current problem. What if you could head off the next one?
Proactive text messages provide customers with updates so that they are aware of critical information like delivery status or service outages. The same logic should apply to your entire customer journey.
The Cost of Bad Customer Experience
Bad customer experience is more expensive than you think. Forbes found that businesses lose $75 billion due to poor customer service. On the other hand, customer retention increases your customer’s lifetime value and boosts your revenue. Murphy & Murphy estimate that a 2% increase in customer retention has the same effect on profits as cutting the costs by 10%.
Yet, most companies focus on random moments that don’t align with what customers want. The nature of people’s expectations is not static, and, as we wrote recently, expectations increase over time.
In this increasingly competitive world, your business has no choice but to focus on building processes to support what consumers. There are no shortcuts or growth hacks to great CX, but lessons from the rise of SMS can provide you some guidance on where to start.
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