Even with 2020 in the rearview mirror, it’s readily apparent disruption levels in the retail industry will remain high for quite some time. Formerly reliable approaches to business simply won’t work in this new and rapidly changing environment.
One of the most important things to realize is customers have gained a significant level of power, especially over the past year. Providing them with the best experience possible should be your top priority from here on out.
By saying consumers have power, we mean they have an incredible influence over the purchase choices of others. Thanks to social media and the reliability of word-of-mouth marketing, one happy buyer can result in increased demand for your product or service. Of course, the contrary is also true. The bottom line is customer retention and loyalty are the keys to business success.
Understand the Current Business Landscape with These Statistics & Key Takeaways
To offer a clearer picture of the current relationship between businesses and consumers, we’ve examined some of the latest studies on customer experience and retention so you can stay up to date on the best practices. Take a look at some of the most important takeaways for 2021 below.
1. The importance of customer service has leveled the playing field. According to Gartner, 81% of businesses compete primarily on customer experience.
2. Most companies understand the importance of going digital. In fact, Gartner reports that 67% of business leaders believe their business will no longer be competitive without embracing digital transformation. If you’re not part of this group, you may find you’re quickly left behind.
3.Understanding your Net Promotor Score (NPS) is key. A study by Bain & Company suggests differences in Net Promoter Score explain between 10% and 70% of the differences in revenue growth between direct competitors.
4. Consumers value a great experience, perhaps more than they value a bargain. According to PwC, customers are willing to pay up to a 16% price premium for a great customer experience.
5. As a business, you can’t count on being given a second chance. With 32% of customers willing to walk away from a brand they love because of just one bad experience, there’s little room for error. (Source: PwC)
6. In a study by Salesforce, 80% of customers say the experience businesses provide is just as important as its products and services. Therefore, businesses should view the experience they offer as part of their product.
7. Fifty-nine percent (59%) of customers state tailoring future interactions based on past engagement is key to winning their business. As a result, it’s clear personalization is an essential part of a great experience. (Source: Salesforce)
8. Bad experiences often have greater ramifications than positive ones. Since customers tell an average of 9 people about positive experiences, but an average of 16 people about negative experiences, businesses need to go the extra mile to prevent negative outcomes. (Source: Deloitte)
9. Business Wire offers a slightly different statistic, claiming satisfied US customers will share their positive experience with 11 different people. As this is no small number, word-of-mouth marketing may be more important now than ever.
10. Loyalty and points-based programs are having a major heyday, with 72% of US adults belonging to at least one loyalty program. (Source: Oracle)
11. Americans aren’t just willing to sign up for loyalty programs. They actively enjoy taking part in them. eMarketer suggests 58.7% of internet users believe earning rewards and loyalty points is one of the most valued aspects of the shopping experience.
12. The vast majority of consumers are open to trading a certain level of privacy for greater personalization. Bond reports that 87% of Americans are willing to have various details of their activity tracked in exchange for more personalized rewards and brand experiences.
13. Consumers have high expectations for brands that go well beyond the value of a simple product or service. A full 75% of consumers expect brands to make more of a contribution to their well-being and quality of life. (Source: Havas)
14. Customer service can make or break customer retention rates. A total of 69% of US consumers say customer service is very important when it comes to their loyalty to a brand. (Source: Microsoft)
15. Repeat purchases are also significantly affected by customer service experiences, with 93% of consumers more likely to make repeat purchases at companies with excellent customer service. (Source: HubSpot)
16. Although customer service is of the utmost importance, it seems not all businesses have gotten the memo. HubSpot reports that more than half of consumers, 54% to be precise, say they’ve had at least one bad customer service experience in the last month.
17. Businesses are still trying to figure out how to leverage technology to provide the kind of personalized experience their customers desire. A whopping 69% of US marketers believe technology has made it harder for them to offer customers personalized experiences. (Source: Acquia) Therefore, it’s clear that getting the formula just right could put you miles ahead of your competitors.
18. Loyalty is not a trivial concept, but rather a lasting relationship that can have a huge impact on both your brand’s reputation and the bottom line of your business. InMoment reports that 77% of consumers say they stayed loyal to specific brands for 10 years or more.
19. While the above statistic shows loyalty can be long-lasting, it is never a guarantee to be taken for granted. HubSpot offers evidence that 50% of US consumers have left a brand they were loyal to for a competitor that better met their needs.
20. One repeat purchase does not make a loyal customer, especially in the eyes of the consumer. Yotpo claims 37% of consumers feel they need at least five purchases to consider themselves loyal to a brand.
21. Freebies may mean more to your customers than you think and can actually play a role in building relationships. AP News reports 61% of consumers think surprise gifts and offers are the most important way a brand can interact with them.
22. Your customers want to know you value their opinions. According to Microsoft, 77% of consumers say they favor brands that ask for and accept customer feedback.
23. You don’t have to box yourself into traditional methods of customer service. Why not take advantage of new platforms? After all, 65% of customers aged 18-34 feel social media platforms are an effective channel for customer service. (Source: Microsoft)
24. Millennials aren’t willing to put up with bad customer service and are more than ready to go elsewhere after a negative interaction. Business Wire shows 74% of this age group will switch to a different retailer if they receive poor customer service.
25. The past year has been tough for customer acquisition, leading many brands to shift their focus to customer loyalty and retention. As a result, 90.2% of US consumers feel equally or more loyal to a brand than they were a year ago. (Source: Yotpo)
These statistics can help you begin thinking in terms of customer experience and better understand how important it is to focus on consumers’ needs during every step of the purchase journey. While one small misstep can cost you dearly, investing in customer experience is proven to reap tremendous rewards.