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  • debbieschwake

My 2024 Prediction: Customer Experience is Key

Updated: Feb 26

Ditch lead generation as a primary focus of marketing.

There is a growing realization, a kind of awakening. A pattern emerged as I met with colleagues, business owners, and professionals. The year 2024, as I see it, is poised to be a year where the spotlight turns firmly toward the customer. (We've been paying this lip service for years.

Focusing on customers and customer experience to grow your company is an excellent strategy. Let me explain the three reasons why.

Cost-effective and Profitable = Customer Retention

Let's talk economics. Retaining existing customers is significantly less expensive than acquiring new ones. Net new customers have a cost of acquisition that includes marketing, selling, and onboarding, typically a hefty upfront investment. This investment has already been accounted for with your set of existing customers. These existing customers are not just buyers but sources of steady, reliable revenue.

According to a 1990 study by Bain & Company and Harvard Business Review, "increasing customer retention rates by just 5% can increase profits by 25% to 95%." And while it would be essential to update those statistics for 2024, the rationale still makes perfect sense. 

This is not to say you do not need new customers. Instead, we're focused on customers as your key growth strategy.

The Power of Word-of-Mouth in the Millennial Market

In a recent presentation I gave, affectionately known as the "Chaos Talk," I highlighted an intriguing generational insight. Millennials, a demographic wielding substantial purchasing power, "are more likely to give word-of-mouth recommendations – more than 50% of the time" according to Lauren Teague in a blog by Convince & Convert. She writes, "77% of all millennials have recommended a product or service to someone else in the past month."

This statistic is crucial in an era where peer recommendations are gold. A Nielsen report supports this, stating that 92% of consumers believe suggestions from friends and family more than advertising. A friend's recommendation can be the deciding purchase factor in a world cluttered with options.

The Commoditization Challenge

Now, for the slightly controversial part: nearly every product and service today has become a commodity. The market is saturated, and differentiation is increasingly challenging. This sentiment echoes a Harvard Business Review article stating that competitive differentiation has narrowed in many industries to a point where products and services are almost indistinguishable. In such a landscape, the real differentiator is the customer experience. It's not just about what you sell but how you sell it and how you make your customers feel.

The Customer Experience Strategy for 2024: Serve, Retain, Grow

Drawing from these insights, the strategy for 2024 becomes clear: prioritize serving your customers, focus on retaining them, and then channel this into growth. This approach aligns with a Gartner study, which found that 81% of companies expect to compete mostly or completely based on customer experience.

Join the Conversation

As we venture into 2024, if customer retention or growth is a strategy you're exploring, I would love to chat with you. There's much to learn and share as we navigate this customer-focused landscape. Let's prove this prediction accurate together.

Frequently Asked Questions (FAQs)

How do businesses measure the effectiveness of customer experience initiatives?

One popular method is the Net Promoter Score (NPS), which asks customers how likely they are to recommend a company's product or service to others. This score can provide insights into customer loyalty and satisfaction. Another key metric is Customer Satisfaction (CSAT), which measures how products and services meet or surpass customer expectations. Additionally, the Customer Effort Score (CES) assesses the ease with which customers can resolve their issues, offering a direct view into the operational effectiveness of customer service efforts. 

You can also address the effectiveness of your customer experience initiatives with quantitative measures. Using an independent agency or contractor to conduct these interviews can remove biased from the quantitative results and provide a more accurate view. Qualitative research methods, including interviews, focus groups, and customer conversations, offer invaluable insights into the nuances of customer experience and satisfaction. You can delve deeply into individual customer journeys through one-on-one interviews, uncovering detailed feedback on their products and services. Focus groups allow for a dynamic exchange of ideas among participants, revealing a breadth of perspectives on potential changes or new offerings. Meanwhile, informal customer conversations, whether via social media, forums, or direct communication, provide a real-time glimpse into unfiltered customer opinions and experiences. Collectively, these qualitative approaches help you understand the motivations behind customer behaviors, offering rich, contextual data that can inform more effective and resonant customer experience strategies.

What specific strategies or technologies can businesses adopt to enhance customer experience?

Personalization is a powerful approach where companies use data analytics to tailor their services and communications to each customer's needs and preferences, creating a more engaging and satisfying customer journey. Additionally, implementing omnichannel support ensures a seamless customer experience across all platforms, whether the customer interacts with a company through social media, email, phone, or in person. Artificial intelligence (AI) and chatbots have also become indispensable tools for providing round-the-clock customer service, offering quick responses to inquiries, and resolving simple issues efficiently. 

How can small businesses compete with larger corporations in customer experience?

Small businesses might have limited resources compared to larger corporations, but they can still excel in customer experience by playing to their strengths. Personal touch is a significant advantage for smaller entities, offering a more personalized and responsive customer experience than their larger counterparts. Small businesses can focus on building strong, community-based relationships, understanding their customers' needs intimately, and responding with agility. Furthermore, using social media platforms to engage directly with their customer base, small businesses can create a loyal community of advocates. Training staff to provide exceptional service and to go above and beyond in every customer interaction can also make a big difference. In essence, by creating a customer-centric culture and making every customer feel valued and understood, small businesses can compete with and outshine larger corporations in the realm of customer experience.

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