How customer experience drives business growth

Companies are investing more of their time and energy every day in rethinking the customer experience. Consumer expectations have changed a lot, even in just the last few years. And businesses have had to pivot or be left behind. But for those who are staying on top of the shifts, investments in customer experience can drive whole new levels of business growth.

A new generation of consumers and a radical, pandemic-driven shift in the way brands and customers interact has led a lot of companies to reassess their CX strategies. Younger customers, especially Gen Z, expect a very different kind of back-and-forth with the businesses they support.

Increasingly, customers expect brands to meet them where they’re at. They want businesses to understand their needs and priorities, align with their values, and provide the kind of personalized experience that acknowledges their individuality. 

This sounds like a lot for brands to take on. And in some ways, it requires a radical reassessment of the customer journey. But for companies willing to make the effort, the payoff is real. Both in a financial sense, and in the future sustainability of your business.

What do we mean by “customer experience?”

Customer experience encompasses every interaction that a customer has with your business, from the moment they first become aware of it until they complete their last purchase (and, depending on your product and your industry, maybe even after).

While customer experience does include the logistics of individual customer interactions, our current understanding of CX has grown beyond a simple list of touchpoints. “Customer experience” has become a much richer concept, one that covers a holistic view of the entire customer journey

The goal of viewing CX this way is to develop a unified, streamlined experience that does more than just reduce friction for your customers (though that’s important too!). Good CX strategy also takes into account the customer’s subjective, emotional experience at every step. 

Today’s consumers expect a more personal relationship with brands than ever before, valuing transparency, responsiveness, and customization. And businesses that make the effort to engage with the customer experience on this human level can expect it to drive major growth in return.

Collect data for deeper customer insights.

Two business people examine customer experience data, in the form of graphs and charts, on a tablet screen.

Privacy is a significant—and growing—concern for consumers. Millennials and Gen Z are more aware of the ways that businesses collect their personal information, and are sensitive to the ways that information is used. According to PwC, 43% of US consumers say they wouldn’t give companies permission to gather their personal data in order to create more customized experiences.

But that doesn’t mean that customer sentiment on sharing personal data is universally negative. The same PwC research found that 63% of US consumers would be more open to sharing their data for a product or service that really matters to them. 

Some of the most important elements of great CX—responsiveness, transparency, empathy—are also core requirements for building trust with your customers. And when your customers trust you, they feel safer sharing their personal information with you. 

That information contains incredibly valuable insights. On the one hand, it lets you construct individualized experiences for your customers. Those can look like product offerings and deals that match their needs; resources targeted to help them with their specific challenges; or messaging that connects with their values and priorities. 

At the same time, analyzing this customer data in aggregate can teach you a lot about your audience. You can uncover trends that help you segment your customer base, enrich your buyer personas, and gain a deeper understanding of your customers’ needs. 

All these insights contribute to refining your marketing and sales strategies, as well as your product design and development. In that way, good CX lays the foundation for you to target your ideal customers better and offer them the features they want most.

Take advantage of customer feedback.

A good customer experience smoothes the way for your customers to tell you how they’re feeling in their own words. When customers aren’t frustrated by unnecessary logistical hurdles, they have more energy to offer you constructive information about what you’re doing well and where you can improve.

Customer feedback is crucial for a few reasons. The first is simply that human beings like feeling heard. When you give your customers a way to communicate their needs to you, you’re signaling that you value their input and care about their wellbeing. 

On top of that, there are few better ways to gain insight into your customers’ wants and needs than by hearing from them directly. Survey responses and open-ended feedback can help you improve both your product and your customer experience. And it can offer guidelines for prioritizing your strategic goals based on what’s most important to your target market.

That way, you can make sure you’re dedicating your customer experience resources to the projects that will drive the most growth for your business.

Create long-lasting customer relationships.

Customer loyalty is an essential ingredient for business success. It’s hard work to attract customers—it requires investing time, effort, and money into customer research and thoughtful marketing. So once you’ve earned a customer’s business, it makes sense to focus on keeping it.

It would be a rare company that had zero customer churn. So, customer acquisition will always remain a priority for any business. But keeping customers is more profitable—both because retention strategies tend to be less costly, and because fostering customer loyalty translates to real, material value for your company.

Customer loyalty is a feeling, so it can be tough to measure directly. But the behaviors associated with it are what business growth is built on. Loyal customers come back to buy from you again and again. They spend more in individual transactions, and upgrade their products and services. They also spend more over the life of their relationship with you.

An outstanding customer experience is a key component of creating loyalty. Customers are also willing to pay a premium for the kind of experience that matters to them. Some are looking for the convenience of online purchasing, while others might want high-touch service and expert advice. Your research and your customers’ feedback will tell you what your particular audience expects.

By contrast, negative experiences are a quick and powerful deterrent to consumers. Nearly 60% of US customers say they would abandon a brand they loved after a few bad experiences. Which means that if you aren’t thinking about your customer experience strategy, you could be driving away a lot of potential business growth through customer churn. 

Generate valuable word of mouth.

Two people sit at a table with a laptop, tablet, and notebooks. One is making a recommendation to the other.

One frequently-used top line metric for customer satisfaction is Net Promoter Score, or NPS. It measures how likely a customer is to recommend your company to someone else. And while every metric has its limitations, there’s a strong association between customers who are happy with their experience, and those same customers’ willingness to advocate for your brand.

It’s a strong endorsement when a customer chooses to invest in you. They’re committing not just their own time and money, but their social capital and their personal relationships, to your product. And younger generations of consumers are more likely than their predecessors to look to their networks—both personal and influencers—for recommendations.

Good CX strategy inspires your current customers to spread the word about your brand. That beneficial buzz helps you reach new audiences, and seeds positive associations with your potential future customers.

Invest in the employee experience.

More and more, businesses are exploring the connection between the customer experience and the employee experience. You can learn a lot about a company’s commitment to customer service by how those values are reflected in its internal service functions as well as its customer-facing ones.

The employee experience is a valuable model of your company’s processes. It gives you an arena where you can test-drive changes, try out metrics, and collect feedback. Reinforcing your customer-centric values in-house also ensures that your company’s customer experience feels consistent for your employees, and authentic for your customers.

In addition, a good employee experience is one of the most important drivers of a good customer experience. When employees can connect their work to a larger purpose, have access to employment opportunities, and feel empowered to use their skills, they’re more satisfied and more likely to stick around.

That keeps valuable institutional knowledge and experience within your organization. It also lets your customers, and your new hires, benefit from the talent that your current employees have cultivated. Investing in great EX is investing in great CX, and all the benefits that come with it.

Investing in your customer experience strategy sets you up for future success.

It can be difficult to quantify the return on investments in customer experience. In many cases, the benefits aren’t immediately visible. Or they’re “softer” benefits which, although they’re no less valuable than bottom-line numbers, don’t show up as cleanly on a spreadsheet.

But a great customer experience isn’t just a nice-to-have for your customers. It’s an important strategic goal. By strengthening your CX strategy, you create a loyal foundation of customers and employees that will drive your business’ growth well into the future.

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Megan Wells
Megan Wells
Megan is a content writer and strategist who loves to dig into the ways technology is changing consumers' relationships with brands.

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