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Just how valuable is a positive client experience?

Just how valuable is a positive client experience?

Marketing used to be about word of mouth and traditional advertising. Now, anyone can see online reviews about any business anytime. As marketing becomes less about what you say you are and more about what your clients or other stakeholders say about you, understanding and enhancing their experiences is increasingly important.

Quantifying the value of a positive experience is difficult, but Peter Kriss, a research scientist, has done it. He gained access to data from two global, $1B+ businesses—one a transaction-based business; the other, a relationship-based subscription business. What he found: not only it is possible to quantify the impact of client experience, but the effects are huge.

Kriss’ summary: Transactional clients who had the best experiences spend 140% more compared to those who had the poorest experience. Subscription members with low satisfaction would likely only remain members for a little over a year. But a member with the highest score would likely remain a member for another six years.

What about the cost/benefit of creating great experiences? Executives within the studied organizations say that delivering great experiences actually reduces their costs. That’s because unhappy stakeholders are more expensive, requiring many forms of support.

What should be your priorities in terms of improving service, according to Kriss?

1. Understand what really matters to your client/stakeholder (i.e. ask them) and respond accordingly. But only ask what makes sense from their point of view. Otherwise, they will think you don’t get them.

2. Ask extremely few questions, such as: how likely are you to recommend us to a friend or family members? What is the primary reason?

3. Surprisingly, the number of people who will give feedback is quite high. The level of feedback and how actionable it can be is significant. The key is to make it easy—and think of the survey experience as part of the client experience.

4. Respond to feedback quickly with the right people. If someone provides feedback and then gets a quick response addressing the issue, that can really blow people away.

5. When is the best time to ask? Do it in the moment, if you can. Find a way for people to provide feedback while the experience is happening, and get that feedback to the right people who can do something about it immediately. Then you can enhance that experience in real time rather than improving something that’s already over.

6. Of course, real time feedback doesn’t make sense in all contexts. For relational businesses, recognize the cadence of the relationship. For instance, right now you might be a vendor, and the client may want you to be more of a partner.

7. Client service has to be worked closely through operations. A constant flow of information allows staff to understand and make adjustments quickly.

8. The best companies build cultures in which employees see their primary jobs as improving the client experience. But, rather than creating client service standards, they let employees experiment to create great client experiences.

9. Incentives can remove the intrinsic motivation behind client feedback. Try other options before contests.

10. Only ask for the feedback if you can actually do something about it. Not acting on it is worse than not asking for feedback.

Kriss argues that quantifying the impact of a great experience on your organization will demonstrate its value to everyone in your organization. Kriss’ full Harvard Business Review webinar is available here.