The experience premium

Superior experiences create engaged customers who are:

  • More likely to consider brands that promise better experiences
  • More likely to recommend brands based on good experiences
  • Willing to pay more for brands they associate with superior experiences

These and other business benefits are significant when you get customer experience right, according to brand management agency Jack Morton which has completed a major survey, called Best Experience Brands, across 4000 consumers in four countries.

Jack Morton says 60 per cent of the surveyed consumers were willing to pay an “experience premium” for a brand’s product or service.

And eight out of 10 were more likely to recommend a brand based on a great experience.

The research was conducted earlier this year. It involved 1000 consumers each in the US, the UK, China and Australia.

Josh McCall, chairman and chief executive of Jack Morton, said: “what we found is that no matter their geographic or cultural differences – when it comes to brand choice, consumers around the world are placing increased importance on experience”.

Forrester Research agrees. A recent report, called You Cannot Price Your Way Out Of Bad Customer Experiences, addresses the key question does it make more sense to invest in customer experience or in reducing prices to improve customer loyalty?

Forrester tested the relationship between customers’ perceptions of their experience, their perceptions of price-value, and their loyalty.

The report shows how customer experience trumps price-value perception as a loyalty driver.

This means, for example, to win over customers, retailers need to compete on experience, not only price, and banks need to build trust in the transparency and fairness of their rates and fees.

Yet despite the compelling benefits, Forrester analyst Harley Manning says that few companies are equipped to harvest the full potential of customer service as a business strategy

Harley assets “you have to change the way you run your company. You must manage from the perspective of your customers, and you must do it in a systematic, repeatable, and disciplined way“.

“When you consistently manage from the outside-in perspective of your customers, you’ll break out of the endless cycle of chasing after problems you create for yourself. That’s because you’ll systematically stamp out the root causes of those problems. This new way of doing business will also create the opportunity for competitive differentiation.”

This means:

  • Lower customer service costs
  • Enhanced revenue per customer
  • Improved retention
  • More new customers

Goals worth chasing.

8 years ago