The effects of an excellent customer experience
We have discussed the means of achieving an excellent customer experience in a previous essay; therefore, we ought to inquire about the effects of the ends of said experience. I shall write this in a manner that can provide value as a standalone piece of writing and mitigate the influence of the previous piece.
Excellency in handling a customer’s concern bears a lot of positive benefits to the business. We are to provide a range of key points and explain each of them and how it would affect the business after said interaction.
Firstly, positive word of mouth. Nowadays, people tend to look at certain reviews from other individuals who have experience dealing with a certain business before they reach out. However, they will be more compelled to reach out to the business if they see positive word of mouth, positive reviews, etc. through online channels or interactions.
Secondly, referrals. If a customer is highly satisfied with the service, they are more than happy to tell their friends, family, etc. If we are to look at customers that have a network of people, our customer is the brand ambassador of our business within that certain network.
Thirdly, customer loyalty. If a certain customer receives a satisfactory level of service while meeting their needs constantly, they become loyal customers, especially when the product or service is ingrained in their everyday endeavors. We have discussed matters of calculating customer lifetime value, and we have cited a certain business that does this successfully in one of our posts.
Fourthly, awareness. Due to excellence in handling customer concerns and the spreading of positive feedback within the demographic, it constantly reaches prospective customers or clients. It makes your business look like the incumbent in your industry.
These are some of the factors from which the business can greatly benefit. Although the business might not physically see the dynamics of some points, it can be identified in revenue or the increase in profit, depending on the start date of the implementation. There is an almost zero percent chance of reverse progress or deterioration of revenue if implemented correctly, as stated herein.
We provided a short synopsis of each factor; therefore, we ought to expand the horizon and identify what triggers the disposition of the factors. Disposition, as stated, is the "end.” For example, “customer loyalty,” we look at it and identify it as the end, so we will determine what actions were taken to obtain the end, which is customer loyalty. We will address it further.
Positive word-of-mouth can be achieved if the customer experiences a human connection from the representative in a positive manner, especially if there are questions that were answered with urgency and delivered effectively that one can comprehend instantly. This would be more effective if the customer had a dilemma and the solution was provided by the representative handling the call or interaction since the action was influenced by a certain emotion, specifically worrying, which is rooted in fear, and the remedy or solution to the subject was provided by the representative who could provide it with an altruistic approach. Given the current circumstances of the matter, they are more likely to spread positive word-of-mouth, and leaving a great review through online channels is where the business can most benefit since it will leave a lasting positive impression for a long period of time.
Prospective customers can see that certain review, which will compel them to consider your business to meet their needs and move forward with the product or service that you are offering. It also builds your business’ reputation online since most people, before making a purchase, would first check for online reviews and see what other people experienced as patrons of your company.
We should also consider the value of one great review. In the digital age, where your presence online is significant, the impact of the review would be enough to influence a prospect’s decision to consider the service or product you’re trying to offer.
Referrals are one of the effects of a great experience with your company. We mentioned in the summary that each client or customer has a network of people that they know and that they can be a really good ambassador to this group of people. Your costs in producing these types of prospects are zero to none since they were generated organically by your current customers.
As soon as there is a need within your current customers’ network that involves the industry that you’re in, your customers will most likely recommend your business due to their positive experience as well as recognition from their network since, as human beings, we want to be recognized for the positive gestures that we make within our group of people. They will be the ones who sell your business to their network.
We must also note that it will most likely lead to a network effect; the people who were referred to you from the first positive interaction can become your business’ ambassadors themselves to their own network. It works like a cycle: the first person is fully satisfied with the service that you provided, which in turn will refer your business to one of the people in their network; the second person becomes satisfied as well, which will also refer your business to their network.
This type of effect is limitless since it works like a chain reaction; it builds a network of customers based on familiarity and trust. It creates a cluster of satisfied customers, which binds them to another group of people or network, and so forth.
Customer loyalty is one of the effects that builds the stability of your business and keeps it afloat.
Your product or service has already been embedded so deeply in their daily lives that it would cost much more to look for another business to replace it. This, in turn, increases the switching costs for your customers or clients. It is also important to know that if you’re providing excellent customer service and applying the necessary traits to achieve a positive customer experience, they won’t be looking for another option elsewhere.
The income generated from this effect usually pays for the costs that your business has on a weekly or monthly basis. Depending on your offering, you can expect an income from these individuals, as long as you remain competent in the customer experience that you are providing. If you have a new offering, they can become customers as well since you have already established the excellence of providing service. We should also look at the customer's lifetime value. A certain grocery chain did a very successful job of applying customer lifetime value to their mode of operation; on average, their customers spend around $100 per week, engage for 50 weeks annually, and remain loyal for about a decade.
The math becomes clear: a single unsatisfactory encounter could lead to a customer switching to a competitor, translating to a staggering loss of $50,000 in potential revenue. Unveiling the arithmetic behind their operation, the customer lifetime value stands at a commendable $52,000. This figure isn't just a random number; it signifies the lasting impact of nurturing a positive customer relationship.
Now, if you multiply it by several loyal customers that you have, the amount will most likely show significance on your balance sheet.
Awareness builds the solid reputation of a certain business within a certain demographic or geography. As customers constantly provide positive word-of-mouth, the positive feedback keeps clustering; hence, this radiation surrounds the business, making it bigger than it is.
It makes the business dominant; it preempts other competitors in that certain area. It also helps develop the business to be the incumbent in the industry. It can also influence other clusters from different areas that are close to your territory.
This specific effect works like the effect of referrals, but on a larger scale since the influence of your dynamics can affect a network as a whole and not individually through reputation. Awareness can spread rapidly to other areas as well if the consistency of an excellent customer experience is practiced.
In conclusion, we provided an analysis of the effects of implementing an effective customer experience. We have observed that it generates a significant amount of our profits. If you look at it from the standpoint of sales and marketing, it’s more expensive to get a new customer than to maintain one, for matters such as how they organically contribute to our revenue through their own dynamics, depending on which effect they have. They can gather enough new prospective customers by just providing them with a positive customer experience. Should there be any costs associated with implementing it, they are most likely spread out through fixed costs—not enough to raise an eyebrow, but the effects—enough to raise it.
Juan Paolo/Paul Granada