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How to Build Brand Loyalty Through Customer Experience

How to Build Brand Loyalty Through Customer Experience
How to Build Brand Loyalty Through Customer Experience

You’re no doubt familiar with the old saying that states 80% of your business comes from just 20% of your customers. What you might not realize is that it costs almost five times more to acquire new customers than it does to hold on to your existing ones for most companies. The probability of an existing customer purchasing from you is 60-70%, but selling to a new person is only 5-20%. Therefore, it is your loyal customers that are responsible for the majority of your company’s sales.

So, how do you create brand loyalty? The answer is by improving your business’s customer experience (CX). In 2015, research from Bain & Company discovered that brands with a high CX rating experience a 4-8% growth in revenue. More recently, a Walker study projected that customer experience would be more important to consumers than products or prices by the end of 2020. This article takes a deeper dive into how to manage, monitor, analyze and improve your company’s customer experience to increase brand loyalty.

What is customer experience?

HubSpot, one of the most popular marketing customer relationship management (CRM) platforms, defines customer experience as “the impression your customers have of your brand as a whole throughout all aspects of the buyer’s journey.” In other words, CX describes everything and everyone a customer interacts with at your company – from your products to the people they encounter. The elements and touchpoints that encompass your company’s CX include the following:

  • Customer service
  • Advertising
  • Marketing
  • Social Media
  • Website(s)
  • Products
  • Reputation
  • Prices
  • Dependability
  • Expertise
  • Trust

These are the main factors that make up a business’s customer experience. This experience is what shapes how your customers see your brand, and it also has a significant impact on your bottom line.

Also read: Customer Experience (CX) Changing The Face Of Online Retailers

Why is customer experience important?

A poor customer experience will result in a negative brand reputation and poor sales numbers. Conversely, superior customer experiences result in positive impressions of your brand, brand loyalty and increased sales and revenue. Ensuring your business provides its customers with an outstanding experience at every opportunity ensures that you retain customers (reduce churn) and create brand loyalty.

According to a recent study from HubSpot, 93% of respondents say customers have higher expectations than they did just one year ago. The same research also found that customers today expect immediate response times, access to staff who can tackle complex issues at a moment’s notice and self-service options. Furthermore, they demand personalized interactions with everyone they encounter at your business.

Another study from Pricewaterhouse Coopers (PwC) found that 32% of customers will stop purchasing from a brand they were previously loyal to after just a single bad experience. PwC also discovered that customers are willing to pay up to 16% more for products from companies that provide great customer experiences. 63% said they would also be ready to share more personal information with brands that offer superior CX. However, 54% of consumers in the U.S. shared that CX at most brands needs to improve.

Also read: Top Customer Experience Trends In ECommerce

That’s quite a large gap between customer expectations of CX and reality. It also highlights the enormous opportunities for businesses that value customer experience and work to measure, manage and improve it. Remember, better CX results in benefits that include an increase in:

  • Positive reviews, recommendations and word-of-mouth customer referrals
  • Customer satisfaction
  • Customer willingness to try additional products and services
  • Brand loyalty

Before we look at how to provide excellent customer experiences that improve brand loyalty, let’s examine the differences between good CX and bad CX.

What does good CX look like?

Going back to the PwC study, its findings show that 80% of consumers in the U.S. value the following CX elements the most:

  • Speed
  • Convenience
  • Knowledgeable help
  • Friendly service

Furthermore, today’s consumers expect technology to always work and only notice new prospects when a positive experience is interrupted. They demand user-friendly mobile apps and websites that are easy to navigate and provide the information they need when they need it.

Human interactions are valued by over 70% of customers, but that doesn’t mean you need to forgo automation. Customers are fine with automated solutions if they can access a human being whenever they need to, and provided that those same automated solutions learn from interactions with customers and improve over time.

What does bad CX look like?

Unfortunately, we all have had bad customer experiences when we’ve been customers ourselves, so it’s no surprise that poor CX is an all-too-common experience. According to research from digital consumer data experts, Hotjar, the following issues are the most reported examples of bad CX:

  • Long wait or response times
  • Lack of understanding of customer needs
  • Unanswered customer questions
  • Unresolved customer issues
  • Too much automation
  • Difficult to access a human being
  • Lack of personalized services
  • Rude and/or angry employees

Also read: Increasing Importance Of Artificial Intelligence (AI) To Improve Customer Experience (CX) In ECommerce

Furthermore, research from Customer Care Management and Consulting (CCMC) found that dissatisfied customers tell twice as many people about their negative customer experience than satisfied customers do.

It’s clear from all the data that if you haven’t paid much attention to CX until now, you need to start investigating how your customers think and feel about your brand.

How to measure CX and customers brand loyalty

Measuring customer loyalty and customer experience isn’t as simple as tracking website visitors and click-through-rate. However, by collecting data from several sources and performing key customer research tasks, you can create an accurate picture of how your customers experience your brand.

  1. Identify your target customers.

First, identify why a customer would want to buy your company’s product or service by analyzing its key features and benefits. Using that information, you can then segment your target market into smaller groups by key characteristics, e.g., geographic, demographic, psychographic and behavioural data. Next, research each segment using public sources, online research and/or paid market research studies to create buyer personas identifying what’s important to them, including their ideal customer experience.

  • Employ and analyze customer satisfaction surveys

Make it a habit of surveying your customers to learn which aspects of doing business with you they like and to identify which touchpoints can improve or need to be eliminated entirely. It’s essential to identify key customer touchpoints and include questions about each one on your surveys. If you’re not sure how to generate a customer survey, there are templates and tools to help you online.

The following are examples of tools that help you measure customer satisfaction:

  • Net Promoter Score® (NPS) – The NPS is a rating system created by and trademarked to Bain and Company, Inc., Fred Reichheld and Satmetrix Systems, Inc. It measures customer satisfaction and loyalty on a scale of 0-10 of how likely a customer is to endorse your product or service to other people. It’s a one-question survey asking your existing customers to rate the probability of recommending your company to a friend or family member from 0-10. To get your score, compare the percentage of detractors to the percentage of promoters. You can gauge CX based on the ratio of people who would recommend your products and services to those who would not.
  • Customer Satisfaction (CSAT) – CSATs use a simple, binary scale to measure the level of customer satisfaction with respect to one touchpoint or aspect of your customer experience. For example, you might ask a customer a yes/no question such as, “Did our product meet your expectations?” CSATs tend to be high, so if your scores are low or suddenly drop, you know you have an area of interest that needs to be addressed.
  • Customer Effort Score (CES) – CES tells you how easy or difficult it was for a customer to use your product, access your services or fix an issue through customer support. Rather than a yes/no scale like the CSAT, it typically employs a five-point rating scale and choices from “extremely difficult” to “very easy.”
  • Milestone surveys – Milestone surveys are questionnaires you send to customers at a key stage of their customer journey to help understand their experience. Common touchpoints to measure are 30 to 60 days after they purchase from you or sign up for your service and immediately after they complete their purchase or receive a product.
  • Customer interviews – When you become comfortable with collecting and analyzing data from customer feedback surveys, or if you’re already an experienced customer researcher, interviews can provide you with a wealth of information about how your customers experience your brand.

If you’re new to customer surveys, it’s easy to feel overwhelmed or want to do it all. Instead, start with the simplest surveys. You can create NPS and CSAT surveys, then analyze the results yourself or use a template from another company. For example, both HubSpot and Hotjar offer NPS and/or CSAT tools. As you amass more customer data, you can add more types of customer experience measurements to your customer research arsenal.

  • Analyze website analytics data

Examine metrics such as page views, bounce rates, traffic patterns, traffic sources, drop-off rates, click-through rates and use heatmap tools to examine how customers use and experience your website. Identify elements and pages that seem to perform well and those that might be posing problems.

Also read: 5 Methods Of Using Analytics To Improve Customer Experience And Drive ECommerce

  • Measure churn rate

The churn rate is measured as the percentage of clients who cancel a service, return a product or stop doing business with your company. It’s especially vital to Software as a Subscription (SaaS) brands. If it’s high, you most likely have CX issues that you need to uncover and address.

These are, by no means, the only scales used to measure and analyze CX. Retail businesses with brick-and-mortar stores might hire mystery shoppers to measure the in-store customer experience. Larger corporations can employ sentiment analysis to investigate and analyze what customers are saying on social media about their brands. This method often uses a type of machine learning known as natural language processing (NLP). So, depending upon your resources, the routes are endless.

How to improve CX

Whether you have the resources to deploy a wide range of CX and customer research methods, or you’re starting out with just NPS and CSAT data, you can make improvements to your CX.

To improve CX, use all the data you’ve collected to create a customer journey map. Adapty provides a free CX audit that can help you to identify the pain points of your website and fix them. Also, HubSpot has a free CX mapping template you can use, or you can make your own. Include columns for each step and label the rows with questions for you to answer based on your customer research. Examples of possible questions include:

  • What is our customer thinking/feeling?
  • What action does our customer take?
  • What needs to change about this step?
  • How/why will we make the change?

Remember, the online experience of your customers counts, too. The good news is there are powerful tools available to help manage and improve online CX. Examples of CX management tools include:

  • HubSpot Service Software
  • Whatfix
  • Satmetrix
  • Khoros
  • WalkMe
  • Podium
  • Tealeaf

Using one or more tools to help you can simplify CX, ease the workload involved in managing and improving CX and help you develop a CX strategy. They can also help ensure you keep that CX strategy laser-focused on your target and existing customers. So, instead of wasting your efforts, blindly stabbing at whatever CX trends that may not be related to your target market, you stick to what is important to your customers.

By making customer experience a priority and basing your improvements on customer feedback and other pertinent data, you’ll create brand loyalty, out-earning and outselling the competition to rise above the pack.

About Ray Ko

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Ray Ko has been creating effective visual merchandising and interior design strategies for retailers for more than 20 years. Today, he is the senior eCommerce manager for shopPOPdisplays, a leading designer and manufacturer of stock and custom acrylic products.

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