Way back in 2017, Microsoft claimed that for 96% of consumers, customer experience drives brand loyalty. With the world undergoing radical changes in the last few years, personalized CX has gained importance and has sealed its position as the critical differentiator across businesses.
CX now drives over 66% of customer loyalty, more than price and brand combined, according to Gartner. Thanks to Amazon, customers today take personalized CX for granted, and some even consider it a "hygiene factor." Studies show that 80% of customers prefer to buy from brands that offer personalized experiences.
As business growth is defined by innovative CX strategies, delivering tailored and contextual experiences throughout the customer journey is a strategic imperative for business leaders. However, recent Gartner research shows that more than 70% of CX leaders struggle to offer differentiated experiences that increase loyalty and drive up the top line. They are too busy fixing existing customer dissatisfaction issues rather than focusing on developing innovative CX projects.
What Drives Customer Loyalty?
This "first-fix" strategy results in a huge gap between reality and expectations. While 80% of brands are confident that they deliver a superior CX, only 8% of their customers agree. This brings us to the most crucial question — what drives customer loyalty in today’s overcrowded and increasingly competitive marketplace? The answer is — speed, convenience, consistency, but above all, personalization. It’s not about the latest technology or cool designs; it’s more about bridging the gap by locating the sweet spot where technology meets — and complements — the human touch.
Realizing that customers consider certain specific experiences as more memorable than others, business leaders are interested in understanding how personalized CX delivers loyalty. Let’s dig deep into the top CX drivers:
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Delight Customers Across Channels
Delighting customers across channels begins with a clear understanding of the critical moments in the customer journey that can be used to influence — from creating pre-visit awareness to converting during a visit to strengthening engagement after the visit. This enables CX leaders to arrive at the specific business outcomes and identify satisfaction drivers at each step of the journey. As customers shuttle between channels and demand real-time access, 89% of brands successfully track unique customer interactions across channels to draw a complete picture of customer preferences and behaviors.
Today, CX leaders can take full advantage of the treasure-trove of customer data available and harness predictive analytics to connect with their customers better, anticipate behavioral patterns, spot CX issues, and uncover opportunities in real-time. This enables them to design innovative, personalized and engaging experiences that delight customers momentarily and create a long-lasting impression that drives loyalty and a 5% to 15% revenue increase.
Provide Customers Unhindered and Instant Support
While brands are looking to delight customers, if there is one word that could describe what consumers want from brands, that would be "convenience." Be it chatbots, interactive voice response (IVR) systems, online communities and forums, or frequently asked questions (FAQ) pages, customers seek real-time, unhindered access to support and value brands that offer 24/7 resolution.
To meet customer demands for convenience, brands need to optimize their self-service capability and integrate them with all customer touch points, ensuring a seamless CX. This helps customers find assistance quickly and increases their reliability on the brand, adding to brand value. Faster and cost-effective resolution to a problem empowers customers with unparalleled control over purchase decisions, thereby ensuring return visits and repeat sales.
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Minimize Customer Effort With Anticipation and Perception of Customer Ease
With convenience as their guiding star, customers want fast, straightforward and precise answers to their queries when interacting with customer support — be it agent-based or self-service. Interestingly, customer loyalty depends on how well brands can deliver on their fundamental promises and not on over-the-top efforts in attracting customers. CX leaders increasingly realize that delighting customers doesn’t lead to brand loyalty; minimizing the effort they need to solve their problem does. Acting on this insight, brands can improve customer service (65 points higher NPS), increase repurchase rates (94%) and decrease customer churn.
Studies show that 32% of customers intend to stop doing business with a brand of their choice after one bad experience. So, what can brands do? First, reduce the number of repeat calls — the most common cause of customer effort — by anticipating and fixing related downstream issues that cause 22% of all repeat calls. Put the feedback from dissatisfied customers to use — train agents and reps on a forward resolution to anticipate customer problems and practice next-issue avoidance.
Enable Greater Autonomy and Judgement Amongst Customer Resolution Team
Although today’s digital-savvy customers prefer self-service, they lean on actual agent support for tricky and complicated problems. Mainly, customers connect with agents after trying to resolve their issues through other channels. Therefore, an agent’s proficiency in picking up exactly where the last interaction ended is critical for delivering a contextual, relevant and personalized response that can hook the customer for life.
Such a critical nature of an agent’s role demands autonomy for faster decision-making. They need to make crucial decisions like allowing a product return or granting a refund. It is a classic example of bad CX if they have to put customers on hold to seek approval on every decision. Based on their front-line observations, they can also offer anecdotal evidence that also helps CX leaders refine go-to-market strategies and deliver unique experiences.
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Understand Predictive Behavior to Differentiate CX
To accomplish a differentiated CX that resonates with organizational values, business leaders must embrace a data-driven approach that help them truly understand what customers need. They need to enable a paradigm shift in the way they design CX projects — holistic, predictive, precise and closely tied to business outcomes. Leaders who dare to push beyond defined CX strategies and transition to a mindset shift will successfully redefine their organizations by the experiences they deliver.
This transition to analytics-based predictive CX won’t happen overnight. As research shows, most organizations still rely on surveys to gauge customer sentiment. However, forward-thinking CX leaders are using available data to draw valuable insights on improving customer experiences. Accuracy in predictive analysis allow brands to manage and measure their CX performance better, enabling significant improvements in strategic decision-making for marketing leaders. OTT platforms like Netflix are a good example of predictive analysis.
Conclusion: CX Is a Differentiator. Is Your CX Team?
Organizations can benefit from a holistic view of customer satisfaction parameters and the value potential of every customer that can be leveraged in near real-time to drive personalization.
With 81% of companies considering CX as a competitive differentiator, business leaders realize the full potential of personalization in boosting customer satisfaction scores and driving loyalty. BCG states that brands with the highest customer satisfaction scores have witnessed better earnings and have doubled shareholder value over the last 10 years.
That is why the next era of personalized CX focuses on leveraging technology, data, and analytics to cater to the primary customer needs — simplify purchase, enable convenience, and improve satisfaction.