Study: Executives Are Delusional About Customer-Centricity
There’s a famous statistic that 80 percent of executives believed their organization delivered a superior customer experience, but only 8 percent of customers agreed.
This comes from this 2005 report from Bain, so it’s a little out of date.
A 2017 study by Capgemini Consulting sought to provide updated insight into the so-called executive disconnect. A total of 450 executives and 3,300 consumers were surveyed, though this study focused specifically on the digital experience. This includes searching for product information online, using a company’s app, or searching for technical support information on a website.
Executives still believe they are doing well, with 75 percent saying their organization is customer-centric. Just 30 percent of customers agree. On the bright side, it has improved since 2005!
That’s still a pretty big disconnect. Here’s are three key insights from the report.
Insight #1: Experience is a Differentiator
Let’s say a customer is trying to choose between two products, your’s and a competitor’s.
The customer visits each website to learn more about the product, watch some tutorials, and see which one best fits her needs. That aspect of the digital experience is a key part of the customer journey, so it’s important to get it right.
Capgemini discovered that 81 percent of consumers will pay a premium for a better experience.
Last fall, I purchased an ecobee smart thermostat for a vacation rental property I own even though my initial choice was a more well-known competitor. The reason was ecobee’s website was intuitively laid out and the company’s helpful support gave me far greater confidence that their product would work as intended.
Insight #2: Better Experience Boosts NPS
This may be obvious, but it’s great to have data to back it up.
Net Promoter Score, or NPS, tracks how likely a customer is to recommend your product or business to someone else. Many businesses grow revenue through word-of-mouth referrals, so this can be an essential metric.
The study found that companies that used NPS results to regularly make adjustments to business operations enjoyed an NPS score that averaged 14 points higher than companies that did not closely link NPS and operations.
This is an epidemic in the business world. It seems like nearly every company surveys its customers, whether its NPS or another model. Yet much of that data goes completely unused.
The lesson here is your survey can be really valuable, if you actually use it. Here’s an online course on how to design and implement an effective survey.
Insight #3: Poor Experiences Hurt Business
Losing a customer is a big concern when someone experiences a service failure. Similar to other reports, the Capgemini study found that 20 percent of customers stopped doing business with a company after a poor experience.
This should leave two important questions:
- What about other 80 percent?
- What are your customers doing?
A study by Dr. Venessa Funches shed some light on what angry customers do when they continue doing business with a company:
- 35 percent do less business
- 70 percent spread negative word-of-mouth about the company
It’s up to you to find out the answer to the second question, what are your customers doing after a poor experience.
One tactic that will help is to make sure customers can opt-in to a follow-up contact when they complete one of your surveys. This allows you to potentially save their business and gain valuable insight into what went wrong.
Studies like the Capgemini report are fascinating because they provide general insight into the world of customer experience and customer service.
My advice to customer service leaders is to use this data as a prompt to check your own organization.
- How do your customers feel about their experience?
- Is a poor customer experience costing your company revenue?
- What can you do to improve?