- There is a strong correlation between Customer Retention and a positive Customer Experience, and an even more direct correlation between Customer Churn and a negative experience.
- This year organizations will be redirecting investments to CX innovations and technology, and by 2020, CX will overtake price and product as key brand differentiator.
- Online customer communities help improve Customer Experience through powerful analytics, supplementing your current tools and strategies, and empowering your customers to help themselves and each other.
How strategic are your customers to your organization, do you view them as strategic at all? If so, what are your goals and how do you measure success? Perhaps your company has an entire role or department dedicated to answering these questions. But even if you don’t, or you aren’t in that role, listen up because customer experience has a rippling effect on your entire business.
In a 2016 survey by Leader Networks and CMX, the number one reason that companies were considering starting a branded online community was to improve Customer Satisfaction and Retention. There is a direct correlation between customer retention and a customer having a positive experience with your organization, product, or service. There is an even more direct correlation between the loss of a customer, or churn, and a negative experience.
Chris Boeckelman takes a deep dive into this phenomenon with some surprising and powerful statistics in a recent article, 40 Customer Retention Statistics You Need to Know:
- 95% of consumers have taken action as a result of a bad experience
- 67% of consumers list bad customer experience as one of the primary reasons for churning
- 58% of consumers will never use a company again after a negative experience
Don’t worry, it’s not all bad:
- 86% of consumers are willing to pay up to 25% more for a better customer experience
- 50% of consumers would use a company more frequently after a positive customer experience
It is predicted that customer experience is going to become the new battlefield as 50% of organizations will redirect their investments to customer experience innovations and technology this year, according to a study done by Toma Kulbytė of SuperOffice. By 2020, it’s predicted that customer experience will overtake price and product as the key brand differentiator.
What can you do to improve your Customer’s Experience?
There are three important focal points that Kulbytė points out:
- Most CX projects begin by focusing on ways to collect and analyze customer feedback
- The importance of multi-channel service options is increasing
- Self-service help will soon be consumers first choice
Let’s take a deeper dive into each of these three items and discuss how an online customer community impacts each point.
Most CX projects begin by focusing on ways to collect and analyze customer feedback
Every department in any company gathers data on customers and hopefully has the ability to understand and directly utilize that data to improve their product or service.
Some current ways to gather or understand data –
- social media analytics
- website traffic
- marketing statistics
- hire data scientists
Website traffic and marketing insights can help you understand how to draw more people in, but don’t do a lot when it comes to retaining the customers you’ve already worked hard and spent money to gain.
Social media analytics give you some valuable information through the ability to measure engagements like visits, clicks, likes, shares, and comments. Social media can also be a great way to gather feedback through reviews and push information out to people through paid advertising options. However, when you rely on social media platforms for your data, they get to decide which statistics are most important to your organization, not to mention all of the other companies on the platform have the same access to the same information for themselves.
An online customer community acts as a supplement to these strategies, and allows you to gather more direct data and feedback on interactions that your customers willingly and actively engage in within the community. We will have another blog taking a deep-dive into this topic within the next couple of weeks, but a quick overview of what you’ll gain is a private and secure, customizable online network where you can precisely track customer engagement. You will gain immediate access to powerful data such as accurate and updated personally identifiable information (PII), traffic and growth, interest and activity, even Net Promoter Score (NPS).
Only about 20-25% of companies today have a direct customer experience initiative, and many of them have little to no actual data or information to measure. Quite often, organizations don't even have correct basic information about their customers such as location and phone numbers, much less statistics on engagement or success. Does your company know who your promoters and brand advocates are, or who is unhappy and recommending people stay away? Wrangling this information and having the ability to directly leverage it could give you a powerful edge within your market.
The importance of multi-channel service options is increasing
According to Kulbytė, 89% of customers get frustrated because they need to repeat their issues to multiple representatives. Your online customer community is a place where your entire organization can get a pulse on the overall outlook of your customers.
Your community can integrate with the tools and social media networks that you use today, allowing you to bring your customers even closer to your organization while providing them with a smoother overall experience across all channels of communication and all of the different departments within your company.
You can supplement the efforts of your Customer Success team and Help Center by empowering your customers to help each other through issues that they have already experienced. This takes place under the watchful eyes of your Success representatives who can jump in to help answer questions and make corrections when necessary.
Your Product team can gather actionable data on current challenges or issues that your customers are facing. An online community provides them with a place where customers are eager to supply direct feedback that will help them iterate faster and make improvements or new developments that are meaningful and immediately impactful. They can utilize surveys or even create groups dedicated to and filled with willing and eager beta testers.
Your Marketing team will have a community of people that are hungry for information about your company, product, and service. They can manage all of the usual suspects; blogs, email campaigns, and newsletters for outgoing messaging, but instead of just measuring impact by views or clicks, they can create more two-way engagement by interacting through comments or creating more focused marketing based on customers interests or activities. A public community even allows prospective customers the ability to easily join and have access to a network of your customers, including those ever-helpful, active brand advocates who really love your product/company and love to talk about it.
Self-service help will be consumers first choice
As much as your customers love you, the reality of our 21st century hyper-connected, online lifestyle is that most of the time when a person needs to find information, they go looking for it. If you don’t provide a place that allows them to find the information they seek quickly and easily, chances are they will move along to someone who can.
A sure-fire way to push your customers away is to make them rely on internet searches or scouring your primary website (which is most likely geared more toward bringing in new customers) for information about your products or services. We’ve broken down this concept fully in a previous article, 4 Ways to Improve Customer Experience with an Online Community.
In conclusion, you want to keep all the customers you have, right? Do you know they are getting the best possible experience with your product, service, and company? How can you be sure?
This article is week 2 of a 12-week series, don't miss a beat by signing up for our Newsletter. To understand the full impact a customer community can have on maximizing your customer's experience, Start a Free Trial of WorkOutLoud today!
E-Book: The CMX Guide to Community Platforms, 2nd Edition by Carrie Melissa Jones & Harmony Leanna Eichsteadt, Revised April 2017; http://cmxhub.com/article/cmx-guide-to-community-platforms/
40 Customer Retention Statistics You Need to Know-Chris Boeckelman; https://www.getfeedback.com/blog/40-stats-churn-customer-satisfaction/
32 Customer Experience Statistics You Need to Know for 2018 by Toma Kulbytė; https://www.superoffice.com/blog/customer-experience-statistics/