You’ve probably heard that investing in customer engagement helps you keep customers and create more positive customer experiences. But there’s a lot more to the story.
Moving forward, companies that invest in – and measure – customer engagement conversations will be able to identify and exploit more opportunities to improve differentiation, retain customers and increase profitability. Here are three reasons customer engagement is the best investment you can make this year.
Engaged customers are more profitable. A mountain of research shows that the longer you keep your customers, the more valuable they become. Eighty-six percent of buyers say they will pay more for a better customer experience. Three out of four consumers have spent more money with a business due to a history of good customer service. And fully engaged customers cost less to service and refer more business – making them more profitable the longer they stay with you.
Disengaged customers hurt your bottom line. Most disengaged customers aren’t willing to wait around for you to make them feel valued. If you lose those customers, the cost to replace them is five or six times greater than it would have cost to keep them. And, they can actually hurt your ability to gain new business as well: 95 percent of dissatisfied customers tell others about their bad experience (PDF).
Companies must now compete on customer experience. In the last decade, more and more organizations have come to realize the connection between high customer engagement and brand differentiation. The proof is in the numbers. Research has shown that, by this year, 89% of businesses said they will compete mainly on customer experience, versus 36% six years ago. And by 2020, customer experience will overtake price and products as the key brand differentiator.
There is now a compelling link between your company’s level of customer engagement – or the sentiment customers feel for your company – and your business performance. Accounting for this shift, research shows that more companies plan to prioritize customer engagement programs and increase investment in the customer experience in the next few years.
So, when was the last time you asked yourself, “How engaged are my customers?”
With 30 years of media and marketing experience, Michael Marzec leads Convero‘s efforts to build unique strategies that drive meaningful – and measurable – engagement for clients across a wide range of industries.