James Carville, political commentator and media personality coined the phrase, “The economy, Stupid,” for Bill Clinton’s 1992 presidential campaign. Carville was talking to the team at the time to help them focus on the key messages for Clinton’s campaign. The slogan resurfaced in the 2008 campaign as “It’s the economy, stupid.”
I decided that for people working in Customer Experience, we needed a way to stay on message, too. So, I am going to share with you some vital statistics about Customer Experience and how they deliver ROI because let’s face it, it’s about the ROI, Stupid.
Measuring your results is vital to your success in Customer Experience. Many resources are committed to it, resources that other agendas in your organization might encroach upon if you cannot prove they are being put to good use (read: making the bottom-line $$$$).
We discussed the best statistics to prove Customer Experience delivers ROI on our recent podcast. As a summary, here are the statistics that reveal the importance of providing an exceptional experience for your customers—and a couple that shows you what happens when you don’t.
8 Key Stats That Show You Customer Experience Delivers ROI
- A customer is four times more likely to defect to the competition if the problem is service-related rather than product- or price-related. It isn’t surprising, really. When things are handled poorly, it leaves a stain on your experience. What causes people to move is when it gets personal, emotional, and when you feel personally wronged by an organization.
- A dissatisfied customer will tell between nine and fifteen people about their experience. People are far more likely to share a Customer Experience horror story than an excellent moment with a company. Part of that is because bad experiences make good stories at a party. However, people also tell these because they are emotionally involved with the story and talking about it helps them get validation for their slighted feelings from their friends and family.
- For every customer complaint you get, 26 other unhappy customers remain silent. Not everyone is a complainer. Some people silently stew in their dissatisfaction. If you count up your complaints, whether by email, snail mail, survey comments or whatever, multiply it by 26 and you have a decent estimate of what percentage of your customers have a problem with your experience. Scary, no?
- 70% of buying experiences are judged by how the customer feels they are being treated. To me, this statistic reveals that it doesn’t even matter if there is a real issue; it’s whether the customer perceives a problem and how they feel about it. Perception is the reality, as they say.
- Seven out of ten U.S. consumers say they spend more money doing business with a company that delivers an excellent experience. This statistic is the whole reason why organizations should focus on Customer Experience. All too often my clients tell me that the critical issue for them in the marketplace is price, but it is never price. It’s the experience they provide for that price that I tell clients to address.
- It is between five to twenty-five times more expensive to acquire a new customer than it is to keep a customer you already have. It surprises me how organizations don’t treat their customers better. I suspect this is because the cost of customer acquisition can be hidden amongst the other figures. Nonetheless, it costs less to keep customers than getting new customers. However, success in this area requires that the mindset of the organization needs to change from customer acquisition to customer retention.
- U.S. consumers will spend up to 17% more with companies that provide excellent customer service. This statistic is up 14% from the previous year. What this statistic tells me is that there is a significant market out there to reward your efforts to improve Customer Experience—and it is growing.
- Organizations that lead in Customer Experience outperform laggards in the S&P 500 index by nearly 80%. Organizations improving their experience are reaping the rewards for their stockholders and stakeholders. If you are a Customer Experience leader, you will reap the dividends for yours (and yourself) also. This also says that if you are an organization that is at the upper echelons of managing Customer Experience, it also suggests that you know a lot about your customers’ needs and the culture of the company is aimed at taking care of those needs.
There you have it, eight indisputable statistics that emphasize the importance of providing your customers with an outstanding experience. Moreover, you see what happens when your experience leaves a little to be desired. Most of all, I hope that you now know what these key stats have to share with all of us: It really is about the ROI, Stupid.
If you want to benchmark your organization’s performance in the new world of behavioral economics against other companies, take our short questionnaire. Once you submit, we compare your answers against what we know about the market and send you a free personalized report about where your organization is today.
Follow Colin Shaw on Twitter @ColinShaw_CX