CX is ‘tipping point’ for brand choice

CX is ‘tipping point’ for brand choice

Customer experience (CX) rates significantly higher than brand promise when consumers are making a purchase with expectation in the US far higher than Europe for personalised experience, according to new research.

Data from the Customer Experience Tipping Point survey, published by Medallia, a customer experience management software firm, together with independent market research consultancy Ipsos, reveals that consumers are quick to both penalise and reward a brand based on their experience(s).

Some 8,000 consumers were surveyed across the US, UK, France, and Germany, and across six industry sectors: online retail; offline retail; banking; insurance; mobile network providers; and hotels.

More than three-quarters of respondents (77 per cent) claim to have chosen a product or service from a company because of good experiences they had with it, while two thirds of respondents (64 per cent) said they have avoided a brand because of a bad experience they have had within the last year.

“Consumers today are sophisticated and do their research before making a purchase. They expect to have a seamless and positive experience and if those aren’t met, consumers know they have options,” said Rachel Lane, solution principal, Medallia.

“For companies looking to create a competitive edge, having a strong brand recognition, or even stellar product isn’t enough. Customer experience is the tipping point, and without a strong plan to create and maintain a positive experience, businesses will lose out.”

According to the survey, the demand for a positive customer experience is especially high in the US, and while loyalty is on the decline, expectations are on the rise, particularly among younger groups of consumers. For example, in banking and online retail, one third of Gen Z (30 per cent) and one fifth of Millennials (22 per cent) surveyed indicated that their expectations of customer experience are higher today than they were two years ago.

Expectations have risen in the US across all six industries examined, and US respondents reported significantly higher expectations than European consumers for personalised experiences, real-time response, and ability to chat with a live agent.

The findings also demonstrate the importance of organisations recognising “every touchpoint matters” with consumers expecting “seamless and efficient” experiences on-  and offline. For instance, nearly three fifths (56 per cent) of online retail shoppers and half of retail offline shoppers (49 per cent) expect consistent levels of service across physical and digital channels.

“Acknowledgement of customer experience as a driver of business performance is at an all-time high. Failure to properly understand customer needs leads to wasted money, time, and energy,” added Jean-Francois Damais, chief research officer at Ipsos.

“[Our] research has shown that when it comes to dealing with customer issues, the key is to reduce perceptions of unfairness. That’s all about getting the balance of effort right. It’s a time-critical case of reacting intelligently, being mindful of your customer and knowing when it’s enough to say sorry. And perhaps more importantly, when it isn’t.”




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