Customer experience has a direct impact on cash flow. After all, the customers are the ones with the money. And competition is so fierce these days that top-level customer experience is essential to keep customers spending.
This is important for several reasons, but the main one we’re covering here is business growth and how it’s directly related to customer experience.
Specifically, we’ll be discussing:
- What is customer experience?
- How do you measure customer experience?
- How great customer experience drives business growth.
- How to improve customer experience.
Customer experience is just one way to achieve business growth. For some more ideas, check out our article on small business growth plans.
What is customer experience?
Customer experience is essentially the way that customers interact with your business. Whether they’re talking to sales staff or using your website, every time a customer is in contact with your business, it affects the way they see your brand.
The customer’s experience is shaped over the course of their journey. Customer journey is a marketing term that refers to the entire process of their dealings with your business, from start to finish. If any stage of the journey is a negative experience, it can lose you vital business.
You can reduce customer experience to two main areas, people and products. The entire customer experience is defined by the way they interact with your products and the people within your business.
How do you measure customer experience?
To help improve your customer experience, you’ll need to know what your customers think about you by using feedback and data.
These are some common ways to measure customer experience:
- Net promoter score (NPS): An index ranging from -100 to 100, describing how likely a customer is to recommend your business.
- First contact resolution (FCR): FCR tracks the number of interactions a customer has with customer service staff before their issues are resolved. Ideally, they only have to deal with one member of staff.
- Average resolution time (ART): The average amount of time it takes for a customer’s issue to be resolved.
- Customer satisfaction score (CSAT): A score based on customer surveys that records their overall satisfaction with your business.
- Customer effort score (CES): CES measures how much effort it takes for customers to navigate your business.
- Customer churn: The number of customers who visit your business and don’t return.
The more information you have about your customers, the better. You need to know exactly where you’re failing to provide a great customer experience if you’re going to improve it.
How a great customer experience drives business growth
It all boils down to revenue. A good customer experience will bring in more money, and that money is essential for business growth.
So the question is, how does customer experience lead to more revenue?
New customers are more likely to return
Customer experience is a huge factor when it comes to first time buyers. You’ll know this yourself from experience. How often have you had a rough experience with a business and never returned?
Existing customers are more likely to become loyal customers
While a good experience will turn new customers into returning customers, it can also turn existing customers into loyal customers. There’s a big difference between somebody who chooses you and somebody who exclusively chooses you.
Customers will bring in new business through word of mouth
Word of mouth advertising is still one of the most powerful forms of marketing. People will always trust recommendations from their friends and family more than anything.
And conversely, people will normally avoid businesses that they’ve heard negative stories about. A great customer experience will ensure that all your customers have positive things to say about you, driving more new business toward you.
Loyal customers spend more money
Generally speaking, loyal customers tend to spend more, per visit, than new customers. This means the revenue generated by a loyal customer is vastly different from a new customer.
A returning customer is already spending more by coming back again and again. When you factor in their increased spending over time, a loyal customer becomes exponentially more valuable than a new one.
Losing customers costs money
We don’t often think about the money we didn’t make because it doesn’t show up on any financial records. But missing out on a sale because of poor customer experience is almost like throwing money away.
You’ll stand out among your competitors
Finally, a great customer experience is what will set you apart from other businesses.
There’s so much competition out there, all offering similar products and prices, so the battle is often won or lost on the basis of customer experience.
How to improve customer experience
Any business can improve its customer experience. First and foremost, you should look at your product. Whatever it is, make sure you’re providing the best possible version of it.
After that, you can further improve your customer experience with these simple methods:
- Understand your customers: Is there something they expect that you’re not offering? Is there something about your business that isn’t clear to customers through your marketing?
- Research the competition: Offer something your competitors can’t or do a better version of it.
- Focus on customer service: Make sure every customer-facing role enhances the customer experience. Focus on soft skills, like empathy and active listening, and hard skills, like technical knowledge.
- Be consistent with your branding: Make sure all your marketing material centres around your brand guidelines. Consistency in your branding will increase trust in your business and improve brand recognition.
- Listen to feedback: Every complaint is an opportunity for improvement. Take customer feedback seriously, especially if the same issues are raised over and over again.
- Share your success with customers: Building a sense of community will make them more loyal. Share your success stories and thank them for their business through social media and email.
- Reward customer loyalty: Give your customers a reason to come back and recommend your business. Provide early access to new product lines, reward them with a points scheme, or offer promotions and discounts when they recommend you to a friend.
- Improve your customer journey: Identify the weak spots and focus on improving them.
Keep your finances in good shape with a simple app
As you work to grow your business, it’s important to spend time on what matters to your customers, and use tools to save on time-consuming admin where you can. That’s why thousands of business owners use the Countingup app.
Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. With features like automatic expense categorisation, invoicing on the go, receipt capture tools, tax estimates, and cash flow insights, you can confidently keep on top of your business finances wherever you are.
You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward!
Find out more here.