Customer Experience Featured Article

Invest in the Customer Experience, Not Advertising

September 11, 2014

Advertising is an established and proven way to send a targeted message to your customers. It offers a measurable return and campaigns may be carefully scaled and controlled to achieve the desired results. Many companies shell out millions of dollars per year on advertising and yet those same organizations are missing out on another prime opportunity to increase sales and boost their retention rates.

The customer experience also provides measurable results and returns, and yet far too often companies overlook this opportunity and fail to make the necessary investments in this area. Zendesk recently compiled some statistics based on research from Harris Interactive (News - Alert) and a number of other sources showing just how valuable a good customer experience can be to a business. The findings also show how damaging a bad customer service experience can be along with the resulting blowback.

According to the findings, 40 percent of buyers made the decision to switch to a competitive brand because of a great customer service reputation. And 82 percent of buyers said they stopped doing business with a particular company because of bad customer service, a shockingly high number. Not only that, but 95 percent of customers went farther and took action based on a bad service experience, which does not bode well for companies doling out bad customer service. Of those who were wronged, 85 percent warned others against doing business with the company while 66 percent actively discouraged others from purchasing from that company. Fifty-five percent simply wanted to vent their anger to others and 24 percent hoped the company would take some sort of action to resolve the issue.

The news isn’t all negative though. A good customer experience is an investment in future business, and 55 percent of buyers said they would recommend a company to others based on outstanding service, while a whopping 85 percent said they were willing to pay as much as 25 percent more than competitors to ensure a superior customer service experience.

Advertising may have its advantages, with companies spending an estimated $214.3 billion per year on it, yet only four percent of Americans said they trusted advertising as the primary source of information about a product or service. A majority of buyers, at 83 percent, do claim to trust independent sources with whom they have a relationship, over advertising. Sources can include family, friends or colleagues.

When it comes down to it, customers are willing to pay more for better service. And they will reward your company by remaining loyal and recommending your brand and products to others. But they will just as easily jump ship and share their negative customer experience with others if things don’t go well. The bottom line is it makes good practical business sense to invest in customer service, and follow up to ensure your buyers are getting the best experience possible.

Edited by Alisen Downey

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