Why Customer Experience Matters – Data

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Customer Experience (CX) is now widely discussed and duly name-checked in any web marketing context – but all too often this is as far as it gets. There is no follow through or readiness to invest in improvements.

However, as this 2014 study by Watermark Consulting vividly demonstrates, the top 10 leaders in Forrester Research’s annual Customer Experience Index Rankings not only outperformed the market over the last 7 years, generating a total return that was 26 points higher than the S&P 500 Index, but also enjoyed

  • Higher revenues – due to better retention, less price sensitivity, greater wallet share and positive word-of-mouth.
  • Lower expenses – due to reduced acquisition costs, fewer complaints, and the less intense service requirements of happy, loyal customers.

By contrast, the CX laggards (the bottom 10 in the Index) not only posted a negative stock return of -2.5% during a period (2007-13) when the broader market rose, but also suffered in terms of lower revenues and higher operating costs.

How to create exceptional customer experience

The Watermark report offers some valuable insights from the leaders of the top performing companies as to how to create a compelling and memorable customer experience:

  • Aim for more than customer satisfaction – shape interactions that cultivate loyalty, not just satisfaction
  • Nail the basics, then deliver pleasant surprises
  • Understand that great experiences are intentional and emotional
  • Use cognitive science to manage both the reality and the perception of the customer experience
  • Recognize the link between the customer & employee experience – Happy, engaged employees help create happy, loyal customers

Why it matters

The opportunities offered by delivering exceptional customer experience are significant, as the Watermark report suggests:

The competitive opportunity implied by this study is compelling, because the reality today is that many sources of competitive differentiation can be fleeting. Product innovations can be mimicked, technology advances can be copied, and cost leadership is difficult to achieve let alone sustain.

But a great customer experience, and the internal ecosystem supporting it, can deliver tremendous strategic and economic value to a business, in a way that’s difficult for competitors to replicate.

Full report 

The above offers a quick digest of Watermark’s short but powerful report. You can download the full report from this page.

Can social media actually generate sales ? – Data

social media players

Do posts or ads on social media sites like Facebook, Pinterest and twitter actually generate sales? According to a new report from Business Insider the answer is emphatically Yes. And growing.

For while direct referrals from a social network may account for only a fraction of sales today, the volume of social commerce is growing quickly – in many cases in triple digits. Overall, last year social commerce sales grew at three times the rate of overall e-commerce.

Some key points from the report:

Social commerce is growing fast

According to the Internet Retailer’s Social Media 500, the top 500 retailers earned $2.69 billion from social shopping in 2013, up more than 60% over 2012. By contrast, the e-commerce market as a whole grew by only 17%.

First click vs. last click

Social commerce is even larger in terms of revenue generation when you look at where consumers begin their purchase process, i.e. first click, (as opposed to using traditional methods such as last click before purchase)

Buy buttons

Growth is very likely to accelerate and conversion rates improve as Twitter and Facebook roll out ‘Buy’ buttons; this will allow social-network audiences to initiate an e-commerce purchase by clicking on a retailer’s post or tweet. Facebook’s tests began in July, Twitter’s in September.

Facebook

Facebook is the clear leader for social-commerce referrals and sales: This is due in large part to the sheer size of its audience — 71% of US adult internet users are on Facebook. A Facebook share of an e-commerce post translates to an average $3.58 in revenue from sales, according to AddShoppers. On Twitter, a share or retweet is worth only 85 cents.

Pinterest

But other sites are gaining, and even leading on, specific metrics, such as average order value (AOV): Polyvore, for example, sees $66.75 in AOV from social referrals, according to Shopify. Pinterest sees $65, compared to Facebook which sees $55 AOV. Pinterest also drives more social sharing of retail content than any other network including Facebook.

Read more here.

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