Why Customer Experience (CX) is Vital to your Marketing Strategy in 2020

Why Customer Experience (CX) is Vital to your Marketing Strategy in 2020

These statistics demonstrate how valuable CX is for the future of your business. We will go through statistics that provide insight on:

  • why CX should be considered as more than just a trend
  • how CX affects revenue
  • development and implementation of new technologies
  • the digital aspect of CX
  • what CX has to do with churn
  • the future of business and CX

CX: Buzzword or Insightful Business Strategy?

Improving Customer Experience and digital transformation has become a priority.

  • Digital-first companies are 64% more likely, and CX leaders almost three times more likely, than their peers to have exceeded their top 2018 business goals. (Adobe and Econsultancy, 2019)
  • Over 66% of marketers that are responsible for CX say their companies compete based on CX. And by 2019, 81% said they expected to be competing mostly or entirely based on CX. (Gartner, 2017)

This Trend Has Legs

CX has been trending in marketing in recent years, and it's not going away anytime soon. Businesses are investing in Customer Experience through digital and human interactions.

  • 51% of global software decision-makers reveal that they are increasing spend on digital experience solutions over the next 12 months (Forrester and Adobe, 2018)
  • Among USA consumers, 65% report that a positive experience with a brand is more effective than good advertising. (PWC, 2018)
  • Experience-driven businesses have happier employees (Adobe and Forrester, 2018):
    • 1.6x greater personal satisfaction
    • 1.6x greater team satisfaction
    • 1.3 greater department satisfaction
  • 49% of shoppers made impulse buys after receiving a personalized recommendation; 44% will become repeat buyers after personalized experiences, and 63% of millennials made an impulsive purchase based on a personalized recommendation. Furthermore, 85% of consumers are satisfied with their last-minute purchases, with only 5% returning their products. ('State of Personalization Report,' Segment, 2017)
  • 17% of shoppers think that retailers are customizing the in-store experience, with 54% of shoppers expecting a personalized discount within the following 24 hours. ('State of Personalization Report,' Segment, 2017)

How does CX impact the bottom line?

Valued, elevated experiences provide tangible outcomes and can be seen in the form of saving money on unnecessary costs and building revenue.

  • Globally, people are willing to spend up to a 16% price premium on products and services, plus increased loyalty after a great experience. (PWC, 2018)
  • Experience-driven businesses grew revenue 1.8x faster and reported 2.1x higher increases in return on ad spend than other companies. (Adobe and Forrester, 2018)
  • Experience-driven businesses have superior performance across the customer lifecycle (Adobe and Forrester, 2018):
    • 2x greater customer lifetime value
    • 2.7x greater cross-sell/upsell rates
    • 1.9x greater customer satisfaction ratings
    • 2x greater customer retention rates
  • There is up to 70% reduction in phone, chat, or email inquiries after companies have implemented a virtual customer assistant (VCA), reporting increased customer satisfaction and a 33% saving per voice engagement. (Gartner, 2018)
  • Over a three year period, implementing a CX strategy improved customer retention by 2%, saving nearly $1.5 million in customer replacement costs. (Forrester and Adobe, 2018)
  • 74% of Customer Experience leaders expect CX budgets to rise in 2020, up from 47% in 2017 ('CX Management Study 2019', Gartner)
  • Gartner reports a positive relationship between customer satisfaction and business outcomes, indicating that good CX led to ('CX Management Study 2019', Gartner):
    • 63% increased revenue
    • 55% increased retention and reduction in churn rate
    • 54% increased customer lifetime value (LTV)
    • 53% increased profitability/margin
    • 51% increased customer referrals
    • 50% increased loyalty program participation
    • 41% reduced cost of service
    • 38% reduced cost of acquisition
  • The correlation between CX and repurchasing is very high (R = 0.82). (Qualtrics, 2018)

The Omnichannel Experience

In today's digital age, there are many ways to reach consumers by interlacing multiple platforms and face-to-face engagement.

  • Over the next three years, 32% of businesses report that delivering personalized experiences in real-time will be the most exciting prospect, and 19% regard that engaging audience through VR or AR will be the most exciting prospect. (Adobe and Econsultancy, 2019)
  • The number of large organizations stating they already use AI has increased by 50%, from 24% in 2018 to 36% in 2019 (Adobe and Econsultancy, 2019)
  • Virtual customer assistant (VCA) or chatbot technology will be integrated into 25% of customer service and support operations across all engagement channels in 2020 (Gartner, 2018)
  • 30% of all B2B companies will employ AI to automate at least one of their primary sales processes in 2020, as AI can provide up to 30% higher conversion rates for engaging prospects or leads. (Gartner, 2018)
  • 91% of organizations are planning to deploy AI within the next three years. By 2030, a billion service tickets will be raised automatically by customer-owned bots. (Gartner, 2019)

The Importance of Digital CX

With CX that exceeds expectations comes an increase for consumers to provide feedback, personal data, loyalty, and much more.

  • 63% of USA consumers say they'd share more information with a company that offers a great experience. (PWC, 2018)
  • Improving digital CX correlates highly to loyalty and revenue across 20 industries, delivering an average of $775 million over three years, with software companies standing to earn the most with $1 billion over three years. (Qualtrics, 2018)
  • In 2020, more than 40% of all data analytics projects will relate to an aspect of CX. (Gartner, 2018)
  • Approximately 78% of consumers want CX to improve in the future. It was reported that technology supporting human interaction must be seamless and unobtrusive across platforms. Instant and convenient is expected; for example, the transition from tablet to smartphone to desktop to human is a baseline expectation. (PWC, 2018)
  • 43% of shoppers would pay more for convenience; 42% would pay more for a helpful, welcoming experience. (PWC, 2018)
  • 41% of consumers say they expect representatives in a brand's physical store to know what they have purchased online, yet only 19% have experienced this. ('State of Personalization Report,' Segment, 2017)
  • It takes 50 milliseconds to assess the visual appeal of a website, suggesting that web designers have 0.05 seconds to make their first impression. (Lindgaard, Fernandes, Dudek & Brown, 2011)
  • Mobile holds 53.3% of the market share worldwide, above desktops (44%), and tablets (2.7%). (Statcounter, 2020)

Bad CX = Churn

Positive and negative experiences influence the purchasing decisions of consumers in almost every industry.

  • 32% of consumers report they will leave a brand they love after just one bad experience. The same figures from Latin America are much higher, at 49%. (PWC, 2018)
  • Positive experiences are particularly influential in purchasing decisions for healthcare (78%), banking (75%), restaurants (74%), and hotels (74%). (PWC, 2018)
  • The following findings demonstrate how likely a consumer is willing to recommend, repurchase, trust, and forgive a company based on their CX (Qualtrics, 2018):
    • 88% of consumers who rate a company's CX as "very good" are likely to recommend that company, compared to 15% of those who rate a company's CX as "very poor"
    • 87% of consumers who rate a company's CX as "very good" are likely to repurchase from that company, compared to 18% of those who rate a company's CX as "very poor"
    • 81% of consumers who rate a company's CX as "very good" are likely to trust that company, compared to 15% of those who rate a company's CX as "very poor"
    • 67% of consumers are "very likely" to forgive a company for a mistake if they think it delivers "very good" CX, compared to only 15% of those who rate a company's CX as "very poor"
  • Approximately 71% of consumers express some level of frustration when they have an impersonal brand experience. ('State of Personalization Report,' Segment, 2017)

The Future of CX

As the number of digital channels expands, self-service and digital commerce interactions are increasing, leading to the move away from human face-to-face and voice-based interactions.

  • Creative professionals see design (22%) and CX (21%) as the two most important ways for their organizations to differentiate themselves from competitors in the next five years. Both increased in importance from 18% in 2018. (Adobe and Econsultancy, 2019)
  • 54% of USA consumers stated that overall CX needs improvement. Although 73% of all people point to CX as necessary in their purchasing decisions, only 49% of USA consumers say they receive excellent CX today. (PWC, 2018)
  • By 2022, 66% of all CX projects will use IT, up from 50% in 2017. (Gartner, 2018)
  • 86% of companies engaged in CX expect their firms to entirely or mostly compete based on CX within two years. ('CX Management Study 2019', Gartner)

Learn more about SMSGlobal and how to utilize mobile messaging in your Customer Experience.