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.
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