Nearly half of businesses list customer experience as their top priority for the next five years.
And it’s no surprise. Customer experience is an essential component of business success, driving higher customer retention, increased revenue, and even improved employee retention.
Unfortunately, many businesses are still struggling to get CX right, with 82% of consumers agreeing that brands have significant room for improvement in delivering a consistently exceptional customer experience.
If CX is top of your priority list for 2023, here are the latest customer experience statistics and trends to help you stay ahead of the curve.
Top line trends:
- Customer experience is key to customer retention
- Companies that provide a great customer experience drive higher profits
- CX is essential for business growth
- Retail trends all point to customer experience
- Employee retention and CX are inextricably linked
1. Customer experience is key to customer retention
Anyone working in consumer-facing industries knows that retaining customers is crucial to staying competitive. Existing customers are shown to spend 31% more than new ones, and a mere 2% increase in customer retention could generate the same amount of profit as cutting costs by 10%.
However, customer loyalty is increasing fickle. Here’s why it’s so important to maintain high CX standards, and ensure that you’re meeting customers’ ever-growing expectations.
CX is make or break for customer loyalty
- According to PwC, 1 in 3 customers will leave a brand they love after just one bad experience, while 92% would completely abandon a company after two or three negative interactions.
- 60% of customers would stop doing business with a brand if the service wasn't friendly.
- 4 in 10 consumers' future purchase decisions are impacted by their experiences with your brand today.
- In a survey by Emplifi, half of respondents said they'd left a brand which they'd been loyal to in the previous 12 months due to poor customer experience.
- 74% of consumers are at least somewhat likely to buy based on experience alone.
Customers have high CX expectations
- 55% of consumers expect better customer service year-on-year - particularly 18-34 year-olds, 70% of whom indicated rising expectations looking forward.
- Nearly 80% of Americans highlight speed, convenience, knowledgeable help and friendly service as the most important elements of a positive customer experience.
- 46% of consumers will abandon a brand if employees are not knowledgeable about the product or service.
- Customers are 2.4 times more likely to stick with a brand when their problems are solved quickly.
- 65% of shoppers find a positive customer experience to be more influential than great advertising.
The customer experience gap is a big threat
- Research shows a 25% gap between the proportion of brands who described their ability to deliver exceptional customer experience as "excellent" and the proportion of consumers who say the same.
- 85% of businesses believe they are offering personalized experiences, but only 60% of consumers agree.
- 73% of consumers point to customer experience as an important factor in their purchasing decisions, yet only 49% say that companies provide a good experience today.
2. Companies that provide a great customer experience drive higher profits
If you can convince your customers to keep coming back for more, it’s no surprise that your business stands to increase their revenue significantly.
Interestingly, though, research shows that great CX pays in more ways than one. Customers are actually willing to pay more for a great experience, and avoiding poor experiences means a substantial cost saving.
Great CX equals increased revenue
- Research by The Temkin Group shows that companies earning $1 billion annually can expect to earn, on average, an additional $700 million within 3 years of investing in their customer experience.
- Brands with outstanding customer experience generate 5.7 times more revenue than competitors who fall behind.
- A 5% increase in customer retention can lead to a 25-95% increase in profitability.
- 84% of companies that work to improve their customer experience report an increase in revenue.
- Companies that view customer service as a value center rather than a cost center achieve 3.5 times greater revenue growth.
Customers are willing to pay more for good service
- 86% of buyers are willing to pay more for a great customer experience.
- Customers are shown to spend up to 140% more after a positive experience than customers who report negative interactions.
- 43% of all consumers would pay more for greater convenience, while 42% would pay more for a friendly, welcoming experience.
- Luxury and indulgence purchases average a 13% price premium for better experience among consumers.
- 61% of consumers would pay at least 5% more if they knew that they would receive outstanding customer experience.
Poor CX costs
- 52% of consumers have switched providers in the past year due to poor service - in the US, this costs brands an estimated $1.6 trillion.
- 1 in 6 shoppers walk away from a purchase due to bad customer experience.
3. CX is essential for business growth
Especially in the retail industry, competition is fiercer than ever before. With so many brands vying both on and offline for consumers’ attention, premium experiences are a crucial differentiator.
Here’s why CX is such an important investment, especially for brick and mortar businesses who now find themselves competing with e-commerce giants.
It gives you a competitive advantage
- 81% of organizations already cite CX as a competitive differentiator.
- More than two thirds of companies now compete primarily on the basis of customer experience.
- Companies that lead in customer experience outperform stragglers by nearly 80%.
- Companies with excellent customer experience stand a 17% higher chance of growing consistently year-on-year.
Poor CX means higher risk
- 83% of executives feel that unimproved CX presents them with considerable revenue and market share risks.
4. Retail trends all point to customer experience
Industry trends come and go, but the common denominator between them all is always customer experience.
As customers demand more digital and personalized experiences, businesses mustn’t forget that consistency is key - if your human workforce doesn’t align with the digital, customer experience still suffers.
Effective omnichannel strategies require consistency
- According to research by Adobe, companies with the strongest omni-channel customer engagement strategies enjoy a 10% year-on-year growth, a 10% increase in average order value and a 25% increase in close rates
- 69% of US consumers shop more with brands that offer consistent experiences in-store and online.
Customers want (even) more personalization
- 49% of buyers have made impulse purchases after receiving a more personalized experience.
- 80% of customers say they are more likely to do business with a company if it offers personalized experiences.
- More than half of consumers say they will likely become repeat buyers after a personalized shopping experience with a retailer.
- 59% of customers believe that personalization based on previous interactions is critical to retaining their business.
- Less than 1 in 4 businesses have the required technology to deliver consistent personalized experiences across all channels.
5. Employee retention and CX are inextricably linked
With so much attention placed on the customer, businesses can easily forget where the majority of experiences begin - their employees.
Disengaged employees and staff shortages will inevitably impact CX, making it essential to invest in keeping your employees happy and productive.
High turnover impacts customer experience
- In the last year, Yelp recorded a 23% increase in customers mentioning long wait times and a 229% increase in reviews mentioning short staffing.
- Unfilled vacancies are shown to reduce output levels per worker by up to 75%.
Good CX improves EX
- Companies with initiatives to improve their customer experience see employee engagement increase by an average of 20%.
- Disengaged reps are 84% more likely to look for a new job.
The key takeaways
Long story short?
Customer experience is essential. In such a competitive market, brands that are able to provide consistently high quality experiences for their customers will be the ones that win.
To deliver great service, you need to empower those on the frontlines: your employees. In such a busy working environment, your staff need to be able to access the right information, at the right time.
That’s where eduMe comes in. With one-tap access to product specifications, sales techniques and common customer interactions, you can give your employees the tools they need to provide exceptional customer experiences, every single time.
Better yet, we integrate bitesize, social media-style training into the tools your workers already use day-to-day - from Microsoft Teams to Workday - resulting in higher completion rates, and increased engagement and retention.
To find out how we can help you increase quality of service by 10%, get in touch now 👇