Why a customer experience matters.

12March, 2012

Customer Experience


Justin Sutton

Whether you like it or not, the real growth of your business is a direct result of the quality of the experience customers have with you. It doesn’t matter if you’re in retailing, consumer products, business services, high-tech, industrial products, or commodities. The quality of the customer’s experience translates directly into your ability to acquire and retain customers as well as improve their profitability over time.

Over the past few years, there’s been a significant increase in the portion of business leaders that recognize these fundamental truths. Unfortunately, despite this recognition, there’s still a big “knowing – doing” gap. Looking across industries, there hasn’t been much progress in the overall quality of customer experiences. Most companies, if they’ve done anything at all, have made no more than isolated, surface level improvements. Exceptionally few organizations have ever fully described or designed the experience they intend their customers to have. If this is true for your organization, chances are the experience is fragmented, inconsistent, and frustrating for your customers. You are making like difficult for them in ways that may be hard to understand.
We’ve found that organizations with more complex business-to-business relationship often have the most to gain by making improvements in their customers’ experience. Some organizations are even discovering new ways to facilitate a differentiated experience surrounding the sale and use of increasingly commoditized products and services.

Based on our research and work with companies, we’ve found that companies that have made meaningful improvements in their customer experience have realized bottom line improvements of 10-25% as a result of increased retention, additional sales, reduced customer acquisition costs, and improved price realization. In addition, we’ve found that the customer experience is often the best lens for making performance improvements in specific areas of the business. For example, the best way to improve sales performance is by designing a sales process that matches the way target customers want to buy and simultaneously provides a differentiated experience for them.

Some companies understand these benefits and are already using the customer experience as a differentiator. They include many of the well known “customer experience leaders” like Disney, Lexus, REI, Whole Foods, and Four Seasons, as well as emerging leaders like Build a Bear Workshop, American Girl, Umpqua Bank, and Hot Topic. They also include business-to-business companies like: Granite Rock, who creates a differentiated experience around the ultimate commodity… sand; Selectron, an electronics component supplier with a highly transparent, customer-centric business model; and IBM, who has a long history of differentiating the management of client relationships.