Thinking of Diverting CX Investments? Think Again.

In the early stages of the pandemic, collective uncertainty resulted in consumers largely giving businesses a “pass” when it came to the customer experience. Over the past year, however, we’ve seen that leniency disappear as customer expectations have returned to pre-pandemic levels. In many cases, frustration and concern brought about by inflation and the current economic climate, and new advancements in digital and AI that have changed how service is delivered have driven those expectations even higher. In order to maintain loyalty and encourage advocacy in this current environment, investing in the customer experience for the in-person/retail experience needs to be a priority.

The Challenge

While most organizations would agree about the importance of the customer experience, the current economic climate can often shift focus to cost cutting versus investment. Brands that divert investments from CX improvement, however, are doing so at a risk. 

If you are currently struggling to make the case for investing in CX or are in a position where you need to make critical decisions about where to focus time and attention, make sure you’re considering these 7 key benefits of building and investing in a strong in-person/retail customer experience strategy:

1. Customer Loyalty: When customers have a positive experience with a brand, they are more likely to become loyal customers who repeatedly shop at the store and recommend it to others. Loyal customers are more likely to make repeat purchases, spend more money, and have a higher lifetime value (LTV), which leads to increased revenue and profitability for the brand. In other words, a loyal customer is a brand’s most profitable and prized asset.
   
   
2. Competitive Advantage: In today's environment, providing exceptional customer experience is a key differentiator for brands. Customers have many options to choose from, and those brands who consistently deliver excellent customer experiences are more likely to stand out from their competitors.
   
   
3. Brand Reputation: Customer experience plays a significant role in shaping a brand’s reputation. Positive customer experiences lead to positive word-of-mouth recommendations, online reviews, and social media endorsements, boosting the brand’s image and credibility. A strong brand reputation leads to increased customer trust, which in turn results in higher customer retention and acquisition rates.
   
   
4. Strong Sales and Revenue Performance: Satisfied customers are more likely to make additional purchases, spend more money, and be repeat customers. By providing a superior customer experience, brands can drive sales, increase average transaction value, and boost revenue.
   
   
5. Reduce Customer Churn: When customers have a poor experience, they are more likely to stop shopping at the store and may even return products due to dissatisfaction. By focusing on customer experience and ensuring customer satisfaction, brands can reduce customer churn and returns, saving costs associated with acquiring new customers and processing returned goods.
   
   
6. Employee Engagement: Employee engagement and satisfaction are closely linked to customer experience. Happy and engaged employees are more likely to provide excellent customer service, resulting in increased customer satisfaction and loyalty. Moreover, employees who feel valued and engaged are more likely to stay with the retailer longer, reducing attrition and the high costs and business impact associated with it.
   
   
7. Enhanced Customer Insights: By prioritizing the customer experience, brands can collect valuable customer feedback, preferences, and data to better understand customer behavior, expectations, and needs. This information can be used to make data-driven decisions, optimize product offerings, and tailor marketing strategies, leading to improved customer targeting and personalization.

Today’s customers expect a positive and seamless experience, and organizations that deliver are in a strong position to reap the benefits. Despite competing internal priorities and cost containment directives, investing in the in-person/retail customer experience is a strategic imperative for brands who seek to succeed in the current competitive and economic environment. As we’ve explored here, providing an exceptional customer experience yields significant business benefits through increased sales and customer lifetime value, helps brands differentiate themselves in a crowded market, and can have a positive impact on the employee experience leading to better front-line performance and lower attrition rates and the high costs associated with it.

About the Author: Rich Bongiorno is Managing Director of the Customer Service Advisory Practice at J.D. Power and is responsible for the Retail Experience Certification and Performance Improvement programs and insights.

Where to find more insights like this:
This blog post was featured in the Customer Service Advice & Insights monthly newsletter. Make sure you're signed up to get the latest customer service channel intelligence >