The old saying "The customer is always right" has never been more true than right now. Globalization, innovation and the internet are providing today's customers with more options than ever before, which also means that they have more power than ever to vote with their wallet. What's more, customers—especially those in the millennial age group—are increasingly looking to purchase experiences rather than objects.
Research and intelligence firm Walker Information has released a report titled Customers 2020 predicting that by the year 2020, consumers' behavior will change to make customer experience, rather than price or product quality, the most important factor in buying decisions. With these structural changes in mind, many businesses have shifted from a cost-centric to a customer experience-centric mindset.
Fortunately, offering a more pleasant customer experience is beneficial for businesses and consumers alike. According to Oracle's 2011 Customer Experience Impact Report, 86 percent of consumers are willing to pay more in order to receive a better customer experience. The report also estimated, for example, that the U.S. airline industry could have earned an additional $8.94 billion in 2010 had companies committed themselves to providing an excellent customer experience.
However, even with customers clamoring to spend money hand over fist, businesses too often let them down. 89 percent of consumers have switched brands to a competitor after a disappointing customer experience, according to Oracle. In addition, only one percent of people believe that companies always meet their expectations for good customer experience.
Much of the disconnect can be attributed to issues in how businesses view customer service—as a matter of cost efficiency rather than customer satisfaction. When your customer service agents are rushing to conclude their calls as quickly as possible, your customers aren't receiving the high-quality service that they need and expect from the companies with which they choose to do business.
If price is the only differentiator between you and your competitors, then you're exposing yourself to a high level of risk. Although in the short term you may be seeing great returns, in the long run it's very possible that your rivals will adopt or improve upon your business model and prices, allowing them to take away your competitive advantage.
On the other hand, it's much harder for your competitors to copy a great customer experience than it is for them to copy your business model. In order to thrive in the face of stiff competition, you need to provide your customers with some kind of "wow factor" that sets yourself apart—whether it's attention to detail, special offers for repeat customers, or a personalized buying experience.
Good customer experience can come in many forms: the way a product makes you feel, the emotional connections that you build with a brand, or the values that a brand represents. When you give customers the superior experience that they're looking for, they'll be far more likely to be a repeat customer and to refer other people to your business.
Customer experience is not just a fad, a buzzword or a passing trend; its impact is here to stay, and you ignore it at your peril. By listening to your customers and observing their behavior, you can find out how to provide them with a delightful customer experience that keeps them coming back to your business.