The importance of delivering on customer expectations
A prospective customer receives dozens of inputs that help them define their expectations of a company. From advertisements, to sales conversations, to referrals from friends and family, customers use these signals to build an idea of the value your company delivers.
Marketing teams across the world spend hundreds of billions of dollars to set high expectations in order to attract new customers. Buy our product, says marketing, and you’ll look just like a supermodel. Use our product, they claim, and you’ll become the next Amazon. In a world where a competitor is only a Google search away, it can feel like we need to promise the moon and the stars to close the deal.
Customer expectations are higher than ever. And this causes problems when it comes to businesses actually meeting those expectations.
Because while businesses want to acquire new customers, they also want to retain them. All businesses have a set of desired outcomes or goals they want to achieve. This might be something as simple as a revenue goal, or as specific as an increase in Net Promoter Score. Achieving these goals is what fuels business growth. But to achieve these goals, businesses have to meet the expectations their customers have.
To get from new customer to repeat customer, businesses need to provide a customer experience that meets the expectations marketing has set.
Customer experience is the delta between the customer’s expectation, and
the performance a company delivers.
That means you have two options to improve the customer experience.
You can either decrease or clarify the expectations the customer has, or improve the performance your company delivers. For example, consider that a customer is expecting next-day delivery, but their order actually arrives three days late. That’s a very poor customer experience.
However, if the customer was expecting the order to arrive in five days and it arrived two days early, that’s a very good experience.
As it stands, companies today aren’t meeting the expectations of customers very often. In a Bain & Company survey of the customers of 362 companies, only eight percent described the experience they
received as “superior”.
In many ways, it’s all in their head. The customer’s perception of performance matters much more than the business’. Similarly, the only expectations that matter are the ones the customer holds.
You’ve heard all the stats before. Eighty-six percent of customers are willing to pay more for a better customer experience Competitive Enterprise Institute (CEI). Sixty-nine percent of customers switch brands due to real or perceived poor experience (Michaelson & Associates). Ninety-one percent of unhappy customers will not willingly do business with you again (Lee Resources). But these stats, while worrying, don’t illustrate the true cost of ignoring customer experience.
In today’s vastly connected world, customer experience is the biggest differentiator companies have when it comes to beating the competition. Competing on price leads to smaller and smaller profit margins. It’s possible to compete on product, but often difficult to stand out in crowded marketplaces. In the face of more easily accessed competition, customer experience is a much more important differentiator for companies that are at risk of
And investing in customer experience yields results. A great customer experience leads to increasingly loyal customers, who continue to purchase and recommend you to friends and family. A poor customer experience means working twice as hard to acquire new customers to replace the customers that have already left. Delivering on customer experience is a highly reliable way to grow your company.
The good news is that companies are able to affect both variables in this customer experience equation. We can help set better expectations
(or just understand the ones our customers are already have).
We can deliver better performance in the areas that matter.
The problem is that most companies today don’t have a good understanding of what drives their customers’ experiences. Their data is disjointed or missing. They can’t accurately predict what levers they need to pull to provide a better experience. In order to deliver on customer expectations and move customers from new to loyal, businesses should invest in customer experience management (CEM).
Gartner defines Customer Experience Management (CEM) as “the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty and advocacy.”
An effective CEM program involves seeking customer feedback and then acting on it, creating a closed-loop system. CEM necessarily involves reaching across departments to bring multiple teams, stakeholders, and systems together in an effort to improve the entire customer experience from start to finish.
Companies that break down organizational silos to build a successful CEM program see many benefits. Service insights feed into marketing initiatives, marketing surveys drive product improvements, product usage influences service decisions. CEM benefits are seen across the entire organization. As Gartner explains, meeting and exceeding customer expectations increases customer satisfaction. A well-designed CEM program also:
At Cisco, we believe that modern customer experience management relies on three pillars.
By bringing these three pillars together, businesses can build a strong CEM program that delivers results. Read on to learn more about the three pillars of customer experience management and how your company can implement each one to continuously meet and exceed customer expectations.