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May 2024 | VOL. 22

80% of customers believe experiences provided by a company

are as meaningful as their products and services.

– 2024 Salesforce Survey

It is true. Customers increasingly value their experience with a company as much as, if not more than, the actual product or service they receive. This shift highlights the importance of seamless, enjoyable interactions at every touchpoint, from initial inquiry and product or service purchase to post-purchase support. Companies that fail to prioritize customer experience may find their overall value proposition undermined, regardless of the quality of their offerings.

 

One of the primary reasons customer experience holds such weight is the impact of friction on the customer journey. Friction refers to any obstacle or inconvenience that makes interacting with a company difficult. At the Verde Group, we describe these issues as, “Most Damaging Problems.” Those specific experiences that predictably drive negative market action and erode market share for our clients. Examples include complicated website navigation, unknowledgeable sales personnel, irrelevant marketing messages, channel conflict, long hold times for customer service, unhelpful or rude staff, and cumbersome return policies. Each point of friction can erode brand trust, turning what could be a positive experience into a frustrating one.

 

Let’s face it. Problems occur and things don’t go as planned for our customers. In fact, according to the Verde Group’s Pulse Database, roughly 60%-70% of any company’s customers experienced at least one problem during their last interaction with the brand. This fact transcends industries, customer types, and global geographic regions. And while most companies state that they “know what their problems are,” many, if not most, focus on those issues most frequently heard or mentioned. Unfortunately, addressing your most frequently mentioned or monitored issues may not be the right answer. As a matter of fact, more times than not, the Verde Group has found that frequency does not equal economic or strategic damage to the business, resulting in organizations fixing issues that simply don’t matter to revenue and profits.

 

The consequences of friction are far-reaching. It directly affects customer retention. Verde Group research consistently shows that customers who experience the most damaging problems are 50% less loyal than those who do not experience friction. And in the age of social media and online reviews, a single poor experience can quickly reach a large audience, tarnishing a company's reputation and deterring potential new customers.

 

From a financial perspective, we all know that the cost of acquiring new customers is significantly higher than retaining existing ones. Friction-induced churn and market share erosion force companies to spend more on marketing and sales to replace lost customers and transactions, thereby reducing profitability. Additionally, customers are willing to spend more for a better experience. According to the 2023 Zendesk CX Trends Report, 64% of customers will spend more if a business resolves their issues quickly and to their complete satisfaction. Thus, reducing friction not only enhances customer loyalty but also supports stronger financial performance.

 

The importance of customer experience cannot be overstated. Friction in any form erodes the perceived value of a product or service, leading to decreased customer loyalty and ultimately, risk in your company’s financial health. Removing the friction points most damaging to your business not only builds a stronger brand but also secures financial growth.

April Poll Results

In April, we asked readers, "Are you using AI technology as a tool to improve your organization's customer service?" The results were somewhat surprising given all the discussion regarding the positive impacts AI can have on a company’s business. However, AI solutions can have their downside as noted in our April newsletter. Regardless, Verde Group believes that properly trained AI systems focused on addressing the CX friction points that matter most to customers and companies can have a long-term profound impact on positive business outcomes.

We are here to help. To learn more about how we can help take your CX insight program to the next level, CLICK HERE.


READY TO TALK? Book an intro session with Dennis Armbruster, Verde Group Executive VP, to discover how you can enhance the impact of your CX program. We want to help you find methods to anchor your customer insights firmly within your business framework, driving stronger ROI and increasing executive buy-in. We want to learn more about your current challenges.

CX INSIGHTS CHAT - SCHEDULE NOW

May 2024 Poll

What do you believe are the perceived risks of using AI to improve your customer experience?

Please choose one answer.
Privacy concerns related to data collection and usage
Lack of personalized human touch
Potential biases in AI decision-making
Errors or inaccuracies in AI responses
Dependence on technology leading to potential service disruptions

IN THE NEWS

CONTACT CENTERS: NOT JUST A PHONE CALL ANYMORE

Long gone are the days of the single-channel contact center - the phone call. Consumers can now connect via social media, emails, and chatbots as well as the traditional phone call. Given the expanded modes of communication, it's imperative for organizations to improve the quality of the customer experience by being more customer-centric and data-driven, as well as having human representative assistance 24/7.


In this interview conducted by MIT Technology Review with Michele Carlson, Senior product marketing manager from NICE, learn how purpose-built AI builds better customer experiences:

READ THE ARTICLE

The Great CX Challenge - A Verde Group White Paper

In conversations with leading CX practitioners, we hear over and over again that they’re frustrated despite mountains of data being generated. They’re searching for ways to increase the meaning and importance of their work, and to make a difference in the outcomes of their business enterprise.


We have a solution. Explore the data that suggests we need to be paying more attention to CX friction over satisfaction in our new white paper: The Great CX Challenge: Financially Linking the Impact of Customer Experience Insights

DOWNLOAD WHITE PAPER

ASK US ANYTHING

May 2024's Question:


Question: In working with one of our consulting partners, it was identified that our company has a serious “delivery gap”. What can we do to close this gap and improve our customer’s experience with our brand?


Answer: First off, let's define "delivery gap". In the context of customer experience, the term "delivery gap" refers to the discrepancy between customer expectations and the actual service or product delivered by a company. This gap can manifest in several ways, including differences in quality, timeliness, or the overall experience provided versus what the customer anticipated or was promised.


Having a delivery gap is not uncommon. This is seen in Forrester’s annual study where they explore the delta between executives who state that customer experience is important to their company and what percentage of those same executives believe they are making significant progress. The 2023 Forrester study found that 80% of executives state that improving the customer experience is a strategic priority yet only 6% of those surveyed indicated that they had made any significant progress in achieving their goals. Verde Group believes this delivery gap can be summed up by the following:


  • Companies are investing scarce resources to fix issues that don’t matter to business performance. They’re the squeaky wheels but not the root cause of market erosion.
  • The lack of connectedness between CX insights and economic outcomes is pervasive. We see this everywhere and it is why our clients embrace our Revenue@Risk® methodology.
  • Without financially grounded CX insights, Executives lack the ammunition required to lean into capital investments and/or changes in operating and marketing plans.

 

Closing the delivery gap can be a challenge but if your company addresses the points above, you will have a significantly improved chance of success. We can help you get there. Contact us to get started.

Send us your questions and stay tuned for the June 2024 newsletter to see your questions answered by one of our CX specialists.


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