3 Reasons Better CX Is Key to Brand Success

Forrester reported that average Customer Experience (CX) quality declined for the second year in a row for nearly half of the verticals reported. This decline is an opportunity for brands who understand the power of CX to continue pushing toward building better customer relationships. Larry Leung explores the top five reasons why brands should power with better CX today.

Introduction – Forrester 2023 CX Report

The annual Forrester report surveyed 96,000 United States-based participants about their thoughts on CX. After analyzing the scores and rankings of 221 brands across 13 industries, it was noted that only six out of the 13 industries had an improved score from 2022 to 2023.

Despite 80% (Gartner) of organizations recognizing the importance of using CX to compete, only 6% of the brands in the report showed a significant improvement in their scores. That score is down from 10% recorded in the previous year.

In particular, the luxury segment powered by retailers and car manufacturers continues to excel in this survey. Automotive manufacturers, Infiniti and Lincoln, and home improvement brand, Tractor Supply Company joined the elite list of top 5% of brands in the entire CX Index making up 11 brands.

Forrester’s CX Index top 11 US brands forming its Elite List (Source: Forrester)

This coveted list also includes seven repeat winners from 2022:
– Chewy.com – pet specialty store
– Etsy – American e-commerce company focused on handmade or vintage items and craft supplies
– H-E-B Grocery Company – upscale supermarket chain based in Texas
– Navy Federal Credit Union – the largest natural member credit union in the United States,
– Trader Joe’s – famous supermarket brand, and
– United Services Automobile Association (USAA) – banking and insurance products to people and families who serve, or served, in the United States Armed Forces

How does a brand make the Elite CX Index?
According to the Forrester report, the secret ingredient for brands to make the Elite CX Index is to evoke powerful positive emotional connections. Elite brands receive 29 positive emotions for every negative emotion on average.

The index combines both customer experience quality and customer loyalty to determine how well brands are operating in the building, extending, and retaining customers.

Forrester’s CX Index is a blend of CX quality and customer loyalty. (Source: Forrester)

“The past 12 months have been unpredictable for consumers and brands in the US, especially as brands struggle to sustain CX quality levels achieved during the pandemic,” said Rick Parrish, VP, and research director at Forrester. “Despite the continued drop in CX quality, the silver lining is that more organizations are aware that they need to prioritize their customers’ needs to drive business growth. When companies invest in improving their CX quality, they receive many benefits, including higher customer loyalty, retention, and devotion.”

3 Reasons Why Brands Should Power With Better CX

Brands with higher scores in the Forrester survey could earn competitive advantages in the marketplace due to the following five reasons:
1. Improved customer loyalty
2. Improved trust between brands and customers
3. Higher content amplification of brand products and services

Reason 1: Improved Customer Loyalty

One of the main goals of creating and implementing a customer experience strategy is to build long-lasting customer relationships. This means brands need to design and execute the expectations set for their customers through a balanced mix of products and services without breaking the bank. When effectively executed, brands would enjoy improved customer loyalty which could lead to repeat purchases and reduce the need to spend extra capital to continually acquire new customers.

The latter could be very expensive. For example, Kick.com, a new game streaming platform currently in beta, signed a two-year pact valued up to US$100 million with the popular streamer, xQC, to move over from Twitch. Acquiring new users and followers from an established streaming platform to a new one is expensive.

xQc signed with Kick.com on a two-year deal valued at up to US$100 million to bring followers onto the streaming platform away from its rival, Twitch (Source: Kick.com)

Reason 2: Improved Trust Between Brands And Customers

Relationships are built on trust. This simple concept extends between brands and their customers whether they are B2B or B2C. Brands could earn or lose trust with customers through every interaction. Understanding customer needs and wants is important as they view trust differently. Thus, the one-size-fits-all CX process many brands currently employ may not yield the best results.

In a recent Adobe survey on customer trust, the content creation giant noted that:

76 percent of consumers say it is important for brands to show empathy by demonstrating they can see things from the consumer perspective, understand their frustrations, and know what is really important to them.

69 percent of consumers say that providing personal experiences they value is critical to rebuilding trust.

72 percent of consumers say that poor personalization decreases their trust in brands, with more than 1/3 (36 percent) saying it significantly harms their trust.

More than half (58 percent) will stop purchasing from a brand that does not provide personal experiences they value.

72 percent of consumers say relevant content delivered at the right time and place boosts their trust — more than a quarter of Gen Z and Millennials say it increases their trust “a lot.” Providing creative and interesting content is also one of the top ways brands can demonstrate empathy for customers.

72 percent of consumers say they trust AI to improve their customer experiences at least some extent. And while the sentiment around AI is largely positive, about 2/3 (65 percent) of executive leaders have seen AI-driven bias in their own companies.

Brand trust can be earned and lost through every CX interaction (Source: Pixabay at Pexels)

Brands that scored well in the Forrester report intentionally design CX touch points to evoke positive feelings and reduce negative ones. Whether it is happiness from the initial brand engagement to the acquisition, the community feeling during onboarding, or the empathy experience through customer support, customers want to feel taken care of and supported.

Higher trust can help brands extend their customer base into upselling other products or service lines. A well-built and maintain system of trust includes markers at key touch points to measure and analyze how well they are operating. These markers are designed to capture relevant customer feedback concurrently for moments that may not be identified previously. CX is an ever-evolving process. More data points can lead to design improvements.

Alternatively, trust loss could lead to reduced purchases or in some cases, customer churns. In the same Adobe survey,

When trust is broken, more than half (55 percent) of consumers say they will NEVER give the brand their business again. Gen Z is least forgiving (60 percent will never purchase again)

Reason 3: Higher Content Amplification Of Brand Products And Services

Reasons 1 and 2 directly contribute to revenue generation through direct customer purchasing actions. The third reason is more indirect but might have similar implications.

How a customer feels about a brand has a direct correlation to how much they amplify or share their experiences with others. This amplification used to be through word-of-mouth. However, with the social media era taking center stage, customers showcase how they feel through content amplification.

For example, Kylie Minogue, the Australian songstress recently became the first person in the world to score a UK top 10 song and a no.1 album in five consecutive decades (80s, 90s, 00s, 10s, and 20s).

It was content amplification through social media posts (over 7,000 TikTok videos and thousands of Instagram/Twitter/pop culture website posts) that propelled the addictive song, “Padam Padam”, on an upward journey from No. 26 to No. 9 over a four-week period.

Her record company designed the CX journey that encouraged her fans to amplify the song through awareness building via social media, acquired new fans to the song, and timely-dropped cassettes and CDs for purchases that resulted in this success. With the right song (“product”), Kylie scored her first UK top 10 since 2010.

In the TikTok – What’s Next Trending Report published in May 2023, the social media platform noted that 41% of its users say that videos that are “lifting their spirit” is a key motivator in their making a purchase. Brands that want to cash in on content amplification should take into consideration the type of emotions their customers have.

Content that drives positivity will have a similar response to purchase intentions and purchases. The reverse is true for videos with a negative tone. As viral moments spread first than any form of word-of-mouth communication, brands need to monitor and manage how their products, services, and messaging affect their customers and the marketplace more proactively.

Follow this link for more information about the Retail Mashup content platform
Follow this link for more insights
Follow this link for more podcast episodes
Follow this link to participate in regular polls

Leave a Reply

Your email address will not be published. Required fields are marked *