Outside In: The Power of Putting Customers at the Center of Your Business is a must have addition to your library. The book helps you understand your customer experience ecosystem. Also, the authors explain how to master the six disciplines of customer experience:
- Customer Understanding
The book walks you through the process of developing a journey map. [Blog Post: Using Customer Journey Maps to Improve Customer Experience] A customer journey map is a diagram that illustrates the steps your customer(s) go through in engaging with your company. They explain how to measure your success with Forrester which is their own CXi Score or Net Promoter Score [Blog Post: Profiting from the Golden Rule]. The Net Promoter system focuses the entire organization on generating promoters, who buy more, stay longer, refer friends and even provide useful feedback and ideas. The book includes critical disciplines that every company must incorporate into its DNA in order to become a customer-centric organization.
Customer Experience Correlates to Loyalty
Parrish Arturi proved that customer experience drives revenue from Fidelity customers. You can’t afford to ignore his example because this is the case for just about everyone’s customers. Unless you work for a true monopoly, it is certainly the case for your customers. There’s a simple reason why this is true: Customer experience correlates to loyalty. And that means that companies with higher CXi scores have more customers who will buy from them again, who won’t take their business elsewhere, and who will recommend them to a friend.
Here’s how we know this for a fact. When we field the CXi survey, we ask consumers to tell us three things: How willing they are to make another purchase from each company, how likely they are to switch business to a competitor, and how likely they are to recommend each company to a friend. Their answers let us calculate the relationships between customer experience and three of the most common loyalty metrics used in business today: purchase intent, churn, and word of mouth.
The relationships are impressively strong — about as strong as correlations get in the real world. For purchase intent and word of mouth they’re so high that nothing else you do is likely to have more impact on whether you’ll get another sale or a recommendation from your customers. And that makes intuitive sense, doesn’t it? Customers who’ve had bad experiences with your company won’t be eager for more. Nor will they send their friends your way — not any more than you’d send your friends to a restaurant that served you a bad meal, or to a retailer that sold you a defective product and wouldn’t take it back.
The correlation with likelihood to take business elsewhere is also significant. Once again it’s easy to see why. Giving your customers a bad experience — by not meeting their needs or just being rude — makes them wonder whether they wouldn’t be better off buying from some one who isn’t you. That’s great for your competitors. They won’t have to convince your customers to leave since you already did that for them. All they have to do is appear to be a credible alternative. For companies in industries where customer retention is a make-or-break issue — like wireless service providers — this can make the difference between profitability and failure.