Customer experience: When selling takes a back-seat
Traditionally, the focus of marketing efforts has been on selling. However, the concept of customer experience, which was introduced by Pine and Gilmore in the Harvard Business Review, proves that successful business influences users through engagement and genuine experiences that add value to the users.
What exactly is customer experience?
It is defined as “the sum total of the interactions that a customer has with a company’s products, people and processes”.
Thus, users who have perceived a positive interaction with a particular brand are not only more likely to spend more, but are likely to share their experience with other users. Thereby, a satisfied user becomes an advocate for that brand in addition to having a longer lifetime value to the firm.
Brands are aware of the high cost of new customer acquisition, thus it makes sense to convert an existing customer to a loyal one. Loyalty towards a brand is determined by the quality of a company’s interaction with its customers and how well it satisfies their needs.
What are the benefits of improving customer experience?
Helps you score over competition rivals: At a time, when there is not much of a differentiators between competing products and services, a great customer experience could be the factor that converts an occasional user into a loyal consumer.
For eg: Despite spending less than $10 million on advertising from 1987 to 1998, Starbucks managed to open an additional 2000 stores to accommodate their increasing patrons.
Increased customer loyalty: A great experience will ensure that customers will stay loyal to the brand and promote it within their social circles.
Reduce operation costs and increase revenue: Today, a number of businesses have realized that service is the new sales. By improving the customer experience, a company can reduce the costs of customer service as well as up-sell and cross-sell their new product offerings and upgrades.
How will an understanding of customer experience benefit a manager?
Today, the ability of a company to survive and be competitive depends on the quality of its customer experiences. Today, the internet has brought customers and brands much closer. It is easier for brands to get feedback from their users and understand their point of view.