Statistics That Prove the Value of Customer

As a business owner, you may be interested in knowing what your customers are experiencing when they visit your physical location or interact with you online. This is important to know because it affects the customer experience. The following statistics will tell you what customers think about your company's customer experience and how it can change both their perception of your business and their behavior towards you.

First, here's a look at the importance of providing good customer service. Customer satisfaction drives loyalty and repeats business, and it can increase your profit margins while decreasing customer acquisition costs. For example, if you were the manager of an independent bookstore that had 1,000 customers in a year and 1% (10 people) post negative reviews on Yelp, you would have to spend $2,500 to acquire 10 new customers. If instead, those 10 people were so satisfied with your company that they went out and told their friends and family about you and posted positive reviews on Yelp, you wouldn't need to advertise as much – if at all – because your business's reputation would spread organically.

The same goes for local businesses with an online presence, like restaurants. Websites are saturated with review sites that provide feedback to consumers about your restaurant's food, service, and atmosphere. Ratings can make or break a restaurant in an instant.

Social media has become another platform for praise and criticism. If you're posting on Twitter, Facebook, or Instagram, you're going to get a mix of likes and comments – both positive and negative. The hope is that the ratio will be skewered in favor of "likes." However, people are becoming increasingly vocal about their complaints on social media, where anyone can see them. This creates an interesting phenomenon because it gives consumers a platform to share their opinions about your business.

On the one hand, if customers are leaving positive reviews or comments on your Twitter page, you'll want to make sure that their voices get heard and acknowledged. Don't let social media go unmonitored, particularly when it comes to feedback from loyal customers who love your brand. Your current customers could turn into walking billboards that help you gain new ones.

However, if your customers are expressing negative opinions, it's important to remember that this is an opportunity to become better. On Twitter, in particular, there are tools for tracking complaints and finding out what people think of you. You can use these insights to see where your business needs improvement to provide the best experience possible.

10 Statistics that Prove the Value of Customer Experience

1. 83% of Customers Who Have A Bad Experience Will Never Buy From You Again (Northeastern University)

This is what you'll lose if your customers have a bad experience with your company. Additionally, they will tell their friends and family about their bad experiences, which could potentially cause you to lose even more customers. The moral of the story is to take customer complaints seriously and make it a priority to address them as soon as possible.

2. A 1% Increase In Customer Satisfaction Can Increase Your Profits By Up To 35% (Business Insider)

If you increase customer satisfaction, not only will you make your customers happy; you'll also increase the amount of money you accumulate. This isn't very surprising because businesses know that satisfied customers are more likely to come back and buy their products.

3. 67% of Millennials Would Pay For A Better Customer Experience (Vision Critical)

Millennials, as most of us know, are the generation that is far more likely to be willing to pay for a better customer experience. This means that businesses should not only be prioritizing their current customers but also trying to gain the business of younger generations.

4. An Increase Of 5% In Customer Satisfaction Can Boost A Company's Market Capitalization By $430 Million (Right Now)

Customer satisfaction is not only important in the short term but also for a company's market capitalization. This means that customer satisfaction can be very powerful, and it would make sense to prioritize such an influential aspect of your business.

5. An Increase Of 1% In Customer Satisfaction Can Increase Revenue By 3% (MarketingProfs)

As many as three percent of businesses claim that they can increase their revenue by focusing on customer satisfaction. If this is something you would like to test, it might be a good idea to do so. Many companies have seen increases in customer satisfaction and increased revenue, which means your company could as well.

6. Companies with The Best Customer Experience Have, On Average, A 3% Higher Market Capitalization (Watson Wyatt)

The market capitalization of a company can be seen as the value of everything they own and owe divided by the number of outstanding shares. Hence, customer satisfaction and experience can impact this figure substantially. If you can quantify what impact customer satisfaction has on market capitalization, you will be able to base your decisions on actual data instead of instincts.

7. Companies with Great Customer Experiences Get More Customers (Accenture)

A study by Accenture showed that customers who have a good experience with a company are willing to tell others about it. They are three times more motivated to tell others than a customer who had a poor experience with the company. As a result, these happy customers help generate revenue for the company in two ways: They bring in new business and they make sure their friends come back.

8. Customer Loyalty Increases Profit Margins (Harvard Business Review)

According to the Harvard Business Review, if you retain a customer for 10 years, you will make up to 10 times more money than if you had won that same customer in the first place. The reason? It costs five times more to win a new customer than it does to keep an old one happy.

9. Happy Customers Mean Lower Costs (Forrester Research)

Happy customers are worth more than unhappy ones because they cost you less money to satisfy. A recent Forrester Research study found that if you focus on customer loyalty, you can save between 10 percent and 25 percent of your costs.

10. Happy Customers Make For A Profitable Company (Harvard Business Review)

There are two ways to monetize your customers beyond the initial sale, and they both increase in value the longer a customer stays with you. The first is through repeat purchases, which can generate healthy profits if done right. The second is by turning them into an unpaid sales team through referrals. According to a study by Nielsen, referred customers are more likely to be high-value consumers who spend 20% more than average with the referring company. These are both valuable ways of increasing revenue that you'll miss out on if your customer retention isn't top-notch.

The research proves that the customer is king. Are you making sure to give them what they want? If not, your business will suffer in the long run because without customers, there are no more sales. Make sure to put yourself in your customer’s shoes and do everything possible to make their experience with your company as seamless as possible by listening closely to what they say and doing all that you can regularly for them. Remember, it only takes one bad review or comment from a disgruntled customer before word spreads quickly about how terrible of an organization you are!