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To be a good business,
do good business

Learn how to use your company’s core values and purpose to gain a competitive edge.

Yoshi Suzuki-Lambrecht | December 14, 2016

Why strong customer experience can’t wait

Customers don’t want more ads—they want brands to bring more delight and value to their everyday lives. And companies that do deliver delightful, exceptional customer experiences are rewarded for it: customer experience leaders have 14% higher compound average revenue growth than customer experience laggards. When the average lifespan of a S&P 500 company is expected to be just 14 years by 2026, and half of the S&P 500 companies are estimated to be replaced over the next 10 years, the difference of 14% CAGR can mean life or death for a brand.

Do good business: CX directly impacts profitability

Customer experience has been identified as one of the key contributors to impacting the overall profitability of a business. Below are some examples:

  • Companies with leading omnichannel customer engagement strategies retain an average of 89% of their customers compared to 33% for companies with weak omnichannel strategies (Aberdeen Group)
  • 74% of consumers have spent more with a company with positive customer experience (American Express)
  • 60% of consumers intended to conduct a business transaction or make a purchase, but decided not to due to a poor experience (American Express)
  • Depending on the industry, acquiring a new customer can cost anywhere from five to 25 times that of retaining an engaged customer (Harvard Business Review)
  • A 5% increase in customer retention can increase profits by 25% to 95% (Bain & Company)

Great customer experiences produce great business outcomes. While there are countless statistics and case studies, the best examples always come from within. If the right data is available, I encourage you to compare various KPIs (e.g., revenue, sales, cost per acquisition, cost per retention, lifetime customer value, conversion rates, etc.) of products/services with various customer experience and engagement metrics.

Be a good business circle pointing to do good business circle

Be a good business: acting on your purpose and values

Consumers are expecting brands to do more and say less—which means businesses must engage with customers in unique, thoughtful, and value-adding ways. It also has to be at the right time, through the right channels, to not intrude or interrupt them.

Your company's core values and purpose—and more importantly how you act on them—are often an untapped source of competitive advantage and differentiation.

A banking case study

Take banking for example. Checking and savings accounts are probably two of the least differentiated commodity products that exist in our economy. They're all pretty much the same in terms of product traits, pricing, interest rates, and offers. In parallel, many banks tend to use the same set of common terms to articulate their core values, such as: personal, customer advocacy, convenience, and integrity.

Now, take a look at the following customer experience for many Americans with checking and savings accounts:

Chart of American bankers’ feedback with quotes and preferences

If a bank’s core values are indeed personal, customer advocacy, convenience, or integrity, it’s missing a prime opportunity to create competitive differentiation by committing to and acting on those values in ways that are most meaningful to their customers—such as implementing personalized and proactive pre-withdrawal warnings messages. This is in line with a recent FICO study that revealed that consumers, especially a majority of millennials, are more likely to switch banks due to negative experiences relating to high or unexpected fees.

There’s a big opportunity for banks to innovate and achieve competitive differentiation by eliminating fees altogether (and thereby entirely rethinking the traditional banking business and operating models). Case in point: Credit Karma reinvented an archaic business model around credit reporting.

“Your company's core values and purpose—and more importantly how you act on them—is often one of the most untapped source of competitive advantage and differentiation.”

Key takeaways

Customers are expecting brands to make their lives better, easier, and more delightful—not to add more barriers and frustrations. Customer experience can serve as a strong competitive asset if real customer problems and pain points are solved in ways that are unique to the brand and its vision, mission, and values.

Want more best practices for customer experience success? Check out our blog post on the four keys to creating an agile customer experience strategy. And don’t miss out on our January 12th webinar—register here.

Yoshi Suzuki-Lambrecht originally published this post on LinkedIn Pulse.

Yoshi Suzuki-Lambrecht

Yoshi Suzuki-Lambrecht is a Customer Engagement & Experience Design consultant in Slalom’s Minneapolis office. Yoshi has spent the past 10 years helping clients realize superior customer/brand experiences by designing and aligning omnichannel customer journeys, business processes, operating models, and technology platforms. Follow him on Twitter and LinkedIn.