INCREASINGLY, COMPANIES AND organisations have abandoned the phrase customer service and replaced it with the increasingly popular term customer experience.
Is there a major difference between service and experience in this context? Writing in Harvard Business Review, a general management magazine published by Harvard University, Disney Institute senior programming director Bruce Jones called customer experience “the sum of all interactions a customer has with a company”.
“This can include everything from a customer’s initial awareness or discovery of a company, product, or service and progressing through the purchase and use of those products or services. Together these all add up to the critical moments – the touch points – that create an organisation’s overall customer experience,” he said.
“The key learning here is that customer experience moves us beyond the traditional definition of customer service – those individual moments when employees are providing direct service to customers. It is also about the bigger picture of what happens before and after these service interactions.
“To truly gain an understanding of customer experience, you must know that it encompasses every aspect of a company’s offerings – from the quality of its customer care to its reputation management, marketing, packaging, product and service features, ease of use, reliability, and beyond.”
Do customer experiences make a difference to a company’s bottom line or boost their revenues?
In 2015, Barbados-based companies Blueprint Creative Inc. and Antilles Economics collaborated on consumer surveys measuring customer experience in Barbados.
The findings included: 80.4 per cent of respondents switched to a company due to its reputation for excellent customer service; 26 per cent said they would pay more money to ensure better service; 83.5 per cent said they were likely to tell a friend, family member or colleague about a company that provided them with poor customer service; and more than half of respondents said they stopped doing business with a company after one bad experience.
Last, research from cloud service company NewVoiceMedia calculated that United States businesses were losing US$62 billion annually through poor customer service. This was a US$20 billion increase compared to 2013, and suggests that the problem is growing.
Recently, American market research company Forrester produced new research linking improved customer experiences with increased revenues.
The study explored the connection between the quality of customer experiences and revenue growth in 13 industries.
Its conclusions included the finding that a single point increase in the customer experience index score of a mass market automobile producer could result in a US$873 million in additional revenue. The study also said that retail banks that were able to increase already excellent customer experience ratings by one point could quadruple revenue.
However, Maxine Schmidt, one of the authors of the Forrester report, said it was difficult to quantify a link between improvements in customer experience and revenues.
“Good customer experience leads to revenue because customers don’t churn, buy more or get other customers to buy. But most companies cannot measure those behaviours at the individual customer level. And even if they could, they’d still not know the quality of each customer’s customer experience. And data isn’t available in a format that allows firms to correlate both,” she said.
“The revenue upside doesn’t always materialise immediately. If a customer just bought a pair of shoes, it may take a while before the customer needs another pair of shoes and goes to buy at that store again.”
