Customer experience isn’t just a differentiator

Improving customer experience is not just a way to differentiate from competitors, it is also a driver of commercial value. It may seem obvious to suggest brands that get customer experience right will see a boost in profitability, but there is in fact a significant uplift.

Over the past five years, the top 10 brands in KPMG Nunwood’s survey have achieved 10 times the revenue growth of their FTSE 100 counterparts, while the UK’s overall top 100 brands have seen 1.5 times the revenue growth of the bottom 100 brands.

Within the top 100 itself the top 10 brands achieve three times the revenue and profit growth versus the bottom 10 brands.

The brands that have seen most improvement over the past five years – the ‘transformational’ brands – have achieved four times the revenue growth and 50 times the profit growth.

“There is a very strong economic link between the quality of the experience you deliver and the shareholder value that’s created for the business. There’s no doubt that the quality of the experience has a very major impact on how well that company performs,” adds Conway.

Newer businesses lead the way

In order to make a difference, larger and more established organisations should look to newer players as it is these brands that are leading on innovation, says Conway. They are able to set new boundaries in terms of expectations because they don’t have to deal with legacy processes and because they have different operating models and ways of working that allow them to be more flexible and creative, and get much closer to the customer.

“Eight years ago if you were the best firm in your sector it was good enough, people would bring their custom to you. But now expectations are set by the best experience people have in other aspects of their lives. Therefore we tend to come to a company with a certain expectation that they are often unable to meet,” explains Conway

It’s something which US brands are much better at doing, according to the research, which finds British firms are between three and five times worse at delivering customer experience excellence than their transatlantic counterparts.

“If you look at the Fortune 500, well over 30% of them have restructured themselves around the customer, either around specific customer needs or around particular segments. In the process they have started to think less about product and more about the circumstances of their customer, trying to identify unmet needs which is driving their approach to innovation,” says Conway.

Sourced through Scoop.it from: www.marketingweek.com