Here’s why customer experience matters.

June 16, 2014 by in category CX with 0 and 0

EngagementHere’s an interesting (and robust) list of reasons why companies should be interested in building a customer-focused business. (As compiled by Return on Behavior  Magazine)

Facts about customer experiences and referrals

  • 96% of unhappy customers don’t complain, however 91% of those will simply leave and never come back – 1st Financial Training services
  • A dissatisfied customer will tell between 9-15 people about their experience. Around 13% of dissatisfied customers tell more than 20 people. – White House Office of Consumer Affairs
  • Happy customers who get their issue resolved tell about 4-6 people about their experience. – White House Office of Consumer Affairs
  • Happy customers who get their issue resolved tell about 4-6 people about their experience. – White House Office of Consumer Affairs
  • 70% of buying experiences are based on how the customer feels they are being treated – McKinsey
  • 55% of customers would pay extra to guarantee a better service – Defaqto research
  • Price is not the main reason for customer churn, it is actually due to the  overall poor quality of customer service – Accenture global customer satisfaction report 2008
  • 94% of customers do not want to be transferred to another representative more than once – Mobius Poll 2002
  • 80% of customers prefer to speak with a representative at the weekends – Mobius Poll 2002
  • 84% of customers are frustrated when a representative does not have immediate access to account information – Mobius Poll 2002
  • Customer who rate you 5 on a scale from 1 to 5 are six times more likely to buy from you again, as to if they ‘only’ gave you a score of 4.8. – TeleFaction data research
  • It takes 12 positive experiences to make up for one unresolved negative experience – “Understanding Customers” by Ruby Newell-Legner

Facts about customer retention and churn facts

  • A 5% reduction in the customer defection rate can increase profits by 5 – 95% – Bain & Company
  • A 50% reduction in customer base would occur if left alone over a 5 year period – Bain & Company
  • It costs 6 – 7 times more to acquire a new customer than retain an existing one – Bain & Company
  • An average company loses between 10 – 30% of its customers annually – McKinsey
  • A customer is 4 times more likely to defect to a competitor if the problem is service related than price or product related – Bain & Company
  • 68% of customers leave because they were upset with the treatment they received whilst speaking to customer services – US Chamber of Commerce
  • Dissatisfied customers whose complaints are taken care of are more likely to remain loyal, and even become advocates, as those that are ‘just’ customers – Strauss & Seidel
  • The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20% – Marketing Metrics
  • For every customer complaint, there are 26 other unhappy customers who have remained silent – Lee Resource
  • 96% of unhappy customers don’t complain, however 91% of those will simply leave and never come back – 1st Financial Training services
  • A 2% increase in customer retention has the same effect as decreasing costs by 10% – Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy
  • Customer profitability tends to increase over the life of a retained customer – Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy
  • In the US alone, people that switch from insurance providers represent a $7.6 billion market in annual premiums – JD Power & Associates

Employee facts

  • The average recruitment cost of filling a vacancy is £4333, increasing to £7750 when organizations are also calculating the associated labour turnover costs – The Chartered Institute of Personnel and Development Annual Survey
  • Employee churn in the private sector is 22.6% – The Chartered Institute of Personnel and Development Annual Survey
  • An average of £1202 is spent on employee training  – The Chartered Institute of Personnel and Development Annual Survey

Facts about customer experience strategy

  • 90% of North American firms view customer experience as important or critical to 2010 plans. 80% of firms would like to use customer experience as a form of differentiation. – Forrester’s: The State of Customer Experience 2010.
  • 85% of business leaders agree that traditional differentiators alone are no longer a sustainable business strategy – Shaw & Ivens
  • 71% of business leaders believe that customer experience is the next corporate battleground – Shaw & Ivens
  • eCommerce spending for new customers is on average $24.50, compared to $52.50 for repeat customers – McKinsey
  • Reducing time and money on explaining business procedures and costs with new customers will save overall – Marketing Management; Spiro, Rich, Stanton 2008
  • 73% of marketing managers of various large companies credit “Repeat purchase behavior” as integral to the definition of successful customer engagement –Forbes Magazine
  • A survey asking which is the most important marketing objectives, shows that 29.9% think that it should be customer acquisition, and 26.6% think that it is customer retention. However 62.2% admit that they concentrate on customer acquisition, with only 20.6% focusing on customer acquisition. –Emarketer
  • 55% of current marketing spend is on new customer acquisition – McKinsey
  • 33% of current marketing spend is on brand awareness – McKinsey
  • Only 12% of current marketing spend is on customer retention – McKinsey

How has your customer experience efforts changed your business for the better or worse?

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