If Customers Will Pay, Why Aren't We Selling?

Various consumer surveys indicate that customers of all stripes have two minds about price and customer experience. Both are important, but in different ways, at different times and in different degrees based on the customer. You don't want to have to compete on price, so how do you change the emphasis back to the experience?

Do customers suffer from a split personality? I say this not because of encounters with clearly rattled fellow shoppers during the holiday season. I say it because of the numbers that consistently come out when customers are surveyed -- and the other numbers that seem to be in the forefront of most buyers' minds.

The latest survey (neatly summarized by 1to1 Media's Tom Hoffman here) was done by Harris Interactive (Nasdaq: HPOL) on behalf of RightNow technologies. It shows a similar result to surveys done in the past: Customer service is a big deal when it comes to customer retention -- and customer defection, for that matter.
The annual Customer Experience Impact Report revealed that, as has been the case in the past, customers value good experiences and reward the businesses that deliver them. For example, 86 percent of U.S. adult customers will pay more for a better customer experience, and almost three in four said that friendly employees or customer service representatives made them fall in love with a brand.
By the same token, failure to provide good experiences can devastate a business. A whopping 89 percent of U.S. adult customers who have received a poor customer experience have switched to a competitor. Half of those polled said they would bolt if a customer service inquiry was not answered within a week. And four out of five customers who shared complaints about poor experiences online had their complaints ignored by the businesses that sparked them.
Obviously, customer experiences -- and customer service, in particular -- plays a major role in retention. However, when poll questions aren't built around customer experience questions, customers give a different answer. Time and again, when customers are asked why they make buying decisions, price bobs to the top of the list.
The common wisdom is that experience is a B2C thing, and price is a B2B thing -- and indeed, recent surveys like this one have confirmed how important price is in B2B buying.

Experience vs. Price
But that's not always the case. As a reporter for VARBusiness in the early 2000s, I was astonished at how many large sales were made by technology vendors and resellers based on experience-related activities -- like the reseller who opted for one vendor over another in a huge deal not because of price, or because of the quality of the products, or any other factors directly related to what he was buying, but instead because one vendor took him golfing. It was an experience-based decision. This reseller owned his business and could be frank in discussing his reasons; I suspect that an employee who made such a decision would go back to the language of price, product features and other conventional factors for job security reasons.
So customers of all stripes have two minds about this -- price and experience are both important, but in different ways, at different times and in different degrees based on the customer. You don't want to have to compete on price, so how do you change the emphasis back to the experience?
This is the tough one: How do you make customer experience -- a driving force in customer decisions that seems to be getting stronger -- a tool for customer acquisition rather than only customer retention?

Telling the Story

It's a matter of telling your story -- something that many otherwise great companies have trouble with. But today, it's really a matter of completing the loop: If you have delivered good customer experiences, you need to find ways to communicate that to other customers looking for good customer experiences. You need to be active about it, and you need a team that fully understands the value those experiences bring for both your business and your customers.
The good news is that technology makes this easy today. Both happy and disgruntled customers are easier than ever to find thanks to social media -- and that usually makes them easier to contact, too. Just as service needs to focus on helping customers who voice problems on social media, so should marketing work with customers who express their delight with their interactions with you.
From there it's up to your business to get creative. Case studies and testimonials are ways we show off successes already -- why can't they be used to talk about the experience customers have had with your business? Treat these customers as peers and treat them to previews, special events and other perks; they will reward you with additional good words about how you treat them in social media.
Beyond that, it's time businesses who have nailed down customer service and customer experiences to tell their potential customers about it in an up-front fashion. Customers are now sophisticated enough to understand these concepts, so appealing to them around your ability to offer a better, easier, more enjoyable experience is a message they already understand. And actively shifting the discussion to experience is a great way to keep the conversation from starting with price.
If 86 percent of customers are willing to spend more for a better customer experience, it's time to focus first on delivering that experience and then on ensuring that customers and potential know that experience can be theirs.