Video Transcript

Hi, it’s David Patmore here from CAL Corporate Solutions.

In this current service climate, customer experience has never been under so much scrutiny and it’s critical to get it right. Service is different than experience. For example, if I went to the shop and ordered my coffee and I got it quickly and it tasted great and it wasn’t expensive, well that’s good service. But if the person who made it for me was prickly and abrupt and I’m really not sure I want to go back because I didn’t feel welcome, well that’s experience. Now of course the two can work together, bad service can lead to bad experience and service is really just about the logistics of how a product is provided. But experience needs some thought and design to get right because it’s all about customer impact. So what might be some of the hidden cost to an organisation when they don’t get that experience strategy right?

I’ve put together a list of what I believe to be the seven deadly hidden cost of poor customer experience. At the end of this video, I’ll give you a five point checklist to some simple things you can do to improve customer experience.

Cost number one, poor experience leads to brand damage. Now this is about the hidden cost of damage to your brand, when there is a poor or ineffective customer experience strategy in place. Now currently 87% rely on online reviews, with a four star review being the minimum rating for most people to engage with a product or service. Did you know that it takes approximately 40 good reviews to remove one bad one? Forrester reporting surveyed over 200 enterprise brands and more than 1000 customers recently. They found that businesses underestimate how often customers have poor experiences by an average of 38%.

So this really begs a question, do you have a customer service strategy or do you have a customer experience strategy? The increase of angry customers recently has also become problematic with many organisations overwhelmed with complaints and frustrated customers, which affects these ratings dramatically. Did you know that 44% of brands focus on their products rather than their customer experience? Basically seeing that as the higher priority, where only 11% of customers put product above experience.

Cost number two, poor experience can impact staff retention. Increased stress on the staff creates retention risk and you can lose your talent very quickly when that happens. Another recent survey stated that service businesses are experiencing up to 39% of staff quitting because of the increase in the hostility of angry customers. I think we can easily see the link between staff retention and poor customer experience creating negative and personal impact to the people serving on the frontline. Attrition rates, high customer service roles and losing experienced staff is costly. It’s also not that easy to find skilled customer service staff who can represent your brand and organisation in a way that becomes an integral part of creating that positive experience for customers.

Number three, cost of retraining staff. This really follows on from the previous point. If staff turnover is high and we’re constantly recruiting and training, it becomes a large expense. This cost would better be redirected into effective retention and nurturing strategy for the existing staff. I know one wine company that is incredibly bad staff support culture and it’s created a revolving door of staff coming in and going. Not investing and nurturing staff is a false economy, affecting bottom line, and it immediately impacts customer experience when there is low morale amongst employees.

Cost number four, not as understanding all points of customer impact. Not understanding or empathizing with all customer touch points can be an area where organisations can be blindsided to poor experiences that customers might be having. I think a classic example of this would be the time that people have to wait when they’re trying to get through on the phone to a service agent. Some organisations work really hard at reducing this timeframe, using positive acknowledgement to create customer empathy in their communication as an example. But other organisations seem completely incentive to this and it’s a major frustration for their customers. This is a real classic result of focusing on a convenient, effective delivery mechanism, which is service versus designing a better customer experience strategy. How many customers does an organisation lose through sending a lack of care message by frustrating basic service access times? This is only getting harder as technology and the ability to talk to a real human being gets overtaken by cost effective tech.

Number five, the comparison sale. If organisations don’t have a good customer experience strategy, it can create easy sales for your competitors. The comparison sale happens because they’ve had a bad experience with you. Then by default, you make the competition look good. The customer will use their bad experience as a reference point, and anything that is slightly better will look amazing and your competitors not have to work really as hard to get or gain their business. You’ve made them look really good.

Cost number six, increased costs of customer attraction. This is an obvious one, but if we haven’t paid enough attention to creating a customer experience strategy, you’ll have to work harder on the front end to continually attract new business. It’s a well known fact that it costs far less to invest in existing customers who love you rather than the cost of buying a new one.

Finally, cost number seven, underestimating your brand’s potential. Underestimating brand potential and market penetration by not focusing on the customer experience strategy. 83% of customers site that positive customer experience is their most important criteria. So if that’s the case, I’ll finish on this question. How far could your organisation’s brand go with a well thought through customer experience strategy? So now it’s down to what you can do. Here’s a quick checklist to work through. Firstly, create a customer impact blueprint, identify touch points, gain impact data. Review to improve it. What can we do better? Develop a service charter to create better practice standards for your frontline team so everyone is on the same page. Identify how you measure the success of those blueprints and charter and monitor the performance of that. Train your staff with professional skills, with proactive customer service strategies. Lastly, employ and effective support framework strategy to sort to nurture the resilience levels of the team.

Thanks for watching and bye for now.