Why customer experience matters for small businesses and creators
Customer experience has become one of marketing's hottest buzzwords. Learn what CX really means and why it's so important.
"Customer experience" has become one of the hottest buzzwords in marketing -- and for good reason.
Customer experience (CX) should be top-of-mind for everyone, whether you're a brand new business owner or the CEO of a Fortune 500 company.
But a lot of times, CX seems more like an abstract concept than an actionable part of running a business.
In this article, we'll define what customer experience really means, and share six reasons why creators and entrepreneurs should make CX strategy a priority ASAP.
What is customer experience?
Customer experience (CX) is the relationship between a business and its customers.
Every interaction a customer has with your brand affects how they feel about it. These customer interactions are often called customer touchpoints.
Whether you interact with them during it or not, every touchpoint can influence your customer's experience.
For example, if your customer reads and enjoys the content you post on social media, that contributes to a positive customer experience, even though you didn't speak with them directly.
There are a ton of potential touchpoints throughout the customer journey, from user experience to brand loyalty programs. Let's hone in on one of the most important pieces of a good customer experience -- customer support.
Great customer support starts with a great customer service team.
But when you're a solopreneur, you are the customer service team. You don't have a call center or team of live chat agents. And offering great customer service as a team of one can be daunting, especially when customers have such high expectations.
In fact, 51% of customers claim companies are falling short of their customer experience expectations, and 54% of them don't believe that companies have their best interests in mind.
The good news is that you can meet (and even exceed) those customers' expectations as a solopreneur without having to stay online 24/7 to reply to customer questions and concerns.
When it comes to customer service, customers value speed, convenience, helpful employees, and friendly service the most.
Tools like live chat messaging and customer service chat templates, or even hiring a virtual assistant to field customer messages, can help you meet those expectations without losing sleep or burning yourself out.
And when you're running things single-handedly, avoiding burnout is key.
Here's why: Happy employees mean happy customers. In other words, the better the employee experience, the better the customer experience. As your business' only employee, it's extra important to practice entrepreneur self-care and keep your own morale high.
Your customers will notice -- and they'll have a better customer experience because of it.
Now that we've covered what it means, let's dig into five (data-backed) reasons why customer experience matters for every company, whether you're a team of one or one thousand.
5 reasons to prioritize customer experience ASAP
1. It boosts customer loyalty
"It’s easier to love a brand when the brand loves you back." - Seth Godin
A good customer experience can boost customer loyalty. It makes sense -- customers who have a great experience are more likely to buy from you again so they can continue that awesome experience.
Plus, it costs more to acquire a new customer than to keep an old one, and loyal customers spend more throughout the customer lifecycle.
Here's how it shakes out by the numbers:
It can cost up to seven times more to acquire a new customer than to retain an existing one.
52% of customers go out of their way to buy from brands they're loyal to.
Repeat customers are nine times more likely to convert than a first-time shopper.
Maybe most importantly, loyal customers can help you shape your brand and improve your products. 90% of shoppers have a more favorable view of businesses that give them an opportunity to provide customer feedback.
Your most engaged customers want to share their feedback with you, and when you listen to their feedback, your brand and products will be better for it.
Take Tiffany Williams, founder of Rich Girl Collective, for example. Tiffany learned what her audience wanted by asking them directly.
“People really want to learn and know what they can do to start either a side-hustle to make some extra money or to be able to leave their job so they can do it full-time," Tiffany told Podia.
“I just ask my audience what they want, what they want to learn, and if it matches something that I have done, and I have been successful with, then I teach it to them."
Overall, asking for feedback creates a better customer experience and makes customers more likely to stay loyal to your brand. In turn, those loyal customers are more likely to give you actionable feedback. It's a win-win and a great reason to invest in customer experience.
Customer loyalty is all about retention. Now, let's talk about how customer experience affects the arch-nemesis of customer retention… customer churn.
2. It lowers customer churn
Churn is the bane of every business' existence. Customer churn -- also known as customer attrition -- is when repeat customers leave your business.
When we talk about customer churn, we're usually referring to when customers stop purchasing services they pay for on a recurring basis, like in a monthly membership or subscription plan.
One of the top reasons for customers churn is a bad customer experience:
76% of customers say it’s easier than ever to take their business elsewhere.
One in three consumers (32%) say they will walk away from a brand they love after just one bad experience.
After a bad experience, 58% of your customers will stop buying from you, 52% will switch to a competitor, and 48% likely won’t purchase from you again.
Every online business experiences churn, but you can lower your churn rates by creating a better customer experience. Customer churn is the opposite of customer retention, so any actions you take to boost customer loyalty and retention also help you reduce churn.
Some tips for creating a better experience and reducing customer churn:
Conduct customer interviews. Like Tiffany, you can get more insight into your customers' needs by talking to them one-on-one than through email or chat. Customer research can teach you a ton about your customers' needs and expectations.
Create a more personalized experience. Your customers want to feel like you know them. We'll cover this more later, but customers crave relevant content.
Make it easy for customers to get in touch with you. A whopping 95% of consumers say customer service impacts their loyalty to a brand. When customers do run into an issue, make sure they know how to reach you to get it resolved -- then make sure you follow up.
Learn more about addressing the top five reasons for customer churn in this article.
In the meantime, let's cover how prioritizing customer experience helps you leverage the most powerful marketing tool of all -- word-of-mouth.
3. It helps you leverage word-of-mouth
"One customer, well taken care of, could be more valuable than $10,000 worth of advertising." – Jim Rohn, business philosopher
People tell their friends and networks about the customer experiences that stand out -- both good and bad. Word-of-mouth is incredibly powerful, and your customers' experience will determine whether that power helps you or hurts you.
This is especially true in the age of social media. Your customers have broader platforms than ever to spread the word -- positive or negative -- about your business. When you invest in customer experience, you can turn happy customers into brand advocates.
As Dharmesh Shah, Founder of HubSpot, said, "The more advocates you have, the fewer ads you have to buy."
Here's what makes word-of-mouth so powerful:
65% of new business generally comes from referrals.
62% of customers say they share bad experiences with others. On the flip side, 72% of customers say they share good experiences with others.
79% of consumers trust online reviews as much as personal recommendations.
45% of shoppers say they first heard about the most recent retailer they purchased from through a recommendation (compared to just 16% through Google).
Customers trust recommendations more than they trust brands, which is why many companies use Net Promoter Score (NPS) to measure customer satisfaction.
NPS helps you quantify the customer experience by asking your customers, "On a scale from one to ten, how likely is it that you would recommend [brand] to a friend or colleague?"
Respondents fall into three categories:
Promoters (score 9-10): Loyal enthusiasts who will keep buying and refer others.
Passives (score 7-8): Satisfied customers who are unenthusiastic.
Detractors (score 0-6) Unhappy customers who may fuel negative word-of-mouth.
Of course, a high NPS doesn't necessarily mean every customer is singing your praises to anyone who will listen. But it definitely means that you're on the right track.
Another great way you can leverage the power of word-of-mouth in your marketing strategy is through user-generated content (UGC) like testimonials and reviews. Across industries, potential customers who look at UGC convert at a 161% higher rate than people who don't.
For example, entrepreneurship coach Shalena D.I.V.A. features customer testimonials highlighting her clients' experiences on her website:
Sales page testimonials and reviews work even better for higher-priced products, like annual memberships or expensive courses. In fact, research shows that conversion rates rose by 380% when reviews were included on a higher-priced product’s landing page.
And when you create an excellent customer experience, you're much more likely to get those reviews and way less likely to deal with a slew of mean tweets.
OK, now that you know how effective CX and word-of-mouth can be, you're ready to dive into another potent combination: customer experience, trust-building, and personalization.
4. It builds trust and helps you personalize the customer experience
Just like customer experience, data privacy and security is a hot topic these days.
Today's customers expect a personalized experience at every touchpoint, but they're also wary of how companies collect and use customer data. And when it comes to personalization, there's a fine line between being attentive and being creepy.
If you find the right balance of trust and personalization, though, it's a virtuous cycle. When you offer your customers a great customer experience, they're more likely to trust you with their data and information, which in turn helps you personalize the experience even more.
Here's how customers feel about data, personalization, and the overall customer experience:
71% of U.S. consumers worry about how brands collect and use their personal data.
56% of marketers say that personalization has a strong effect on improving customer relationships, with 88% saying that prospects and customers expect personalization.
Two-thirds of customers are willing to share their personal information with companies as long as they provide a perceived value in exchange.
86% of customers are more likely to trust companies with their relevant information if they explain how it provides a better experience, and 78% of customers are more likely to do so if companies use their information to fully personalize the customer experience.
When you build trust with your customers, you can create that personalized experience without breaching their trust.
My favorite example of a personalized, customer-centric experience is Spotify. Spotify collects relevant data about what music and podcasts I listen to and fully personalizes my experience based on that info.
Spotify gives me curated playlists and podcast recommendations, and even shows me new music that its all-knowing algorithm thinks I'll like.
I trust Spotify with my listening data and, in return, I get a customer experience that's tailored to my interests. (As a bonus, I don't feel judged for my weird taste in music, and that's a win in my book.)
You don't have to be a giant streaming platform like Spotify to make personalization a part of your marketing strategy.
In her The Clean Eating Way 3-Month Coaching Program, Christa Lyons creates "6 personalized meal plans with grocery lists and prep guides" for her customers.
Personalized meal plans are way more valuable than a one-size-fits-all plan. And more value means that Christa can charge more for -- and make more from -- the program.
Speaking of making more money, let's dive into how creating an excellent customer experience can increase your bottom line.
5. It bolsters your bottom line and gets you ahead of the competition
Investing in customer experience pays off. Literally.
Customers are willing to pay more for a better customer experience:
U.S. businesses miss out on nearly $62 billion annually due to poor customer experience.
86% of buyers will pay more for a better customer experience.
1 in 5 shoppers are willing to pay a 20% premium for personalized goods and services.
Customers are willing to pay up to a 16% price premium on products and services, plus increased loyalty.
Creating a positive customer experience also helps you cross-sell or upsell, which in turn boosts your bottom line even more. When you've built a positive relationship with your customers, they're more likely to be open to upgrades and promotions.
Take Reuven Lerner, for example. Reuven is a software engineer who transformed his offline training business into online courses. Reuven offers his “Intro Python” students an awesome experience, which makes them want to take his advanced courses, too.
"If you have many different courses -- intro, intermediate, advanced -- then you have the opportunity for an upsell because if people really like your intro course, they will beg you for an advanced course... They'll say, ‘You know what? I'm just going to buy all of it.'"
Want to sell online courses like Reuven? Check out Podia. Podia has everything you need to sell online courses, webinars, downloads, and memberships, and most importantly, create a great customer experience. Sign up for a 14-day free trial.
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Last, but definitely not least of the benefits of CX, offering a superior customer experience gives you a competitive advantage that can help you stand out in a crowded market.
In 2013, a Walker study predicted that by the end of 2020, customer experience will overtake price and product as the key brand differentiator. The end of 2020 has just eclipsed us -- and their prediction is proving true.
Gartner found more than two-thirds of companies compete primarily on the basis of customer experience, up from only 36% in 2010. And 57% of customers have stopped buying from a company because a competitor provided a better experience.
The market for online creators is more crowded than ever, but investing in customer experience can help you beat out the competition and boost your bottom line.
By now, hopefully I've convinced you that customer experience is key to success for businesses of all sizes. Let's recap the top five reasons why, so you can get out there and start delighting your customers at every touchpoint.
It's time to invest in customer experience
If you don't have a customer experience strategy for your business, now's the time to create one. Here's why:
It increases customer loyalty. Customers who have a great experience with your business are more likely to buy from you again… and again... and again.
It lowers customer churn. When customers are happy, they're less likely to cancel a membership and more likely to renew one.
It helps you tap into the power of word-of-mouth. Customers trust each other more than they trust brands, and satisfied customers are more likely to recommend you to a friend or leave a positive review.
It builds trust and helps you personalize the customer experience. Customers crave personalized experiences, but they're wary of how companies use customer data. A valuable customer experience helps assuage those fears.
It boosts your bottom line and helps you compete in a crowded market. More and more companies are making customer experience a differentiator, and delighting your customers can help your business stand out.
And remember -- you don't have to be a Fortune 500 company to invest in customer experience. You just need to show your customers that you understand and care about them -- and they'll care about you right back.