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How does Customer Experience Influence Brand Loyalty?

There’s no question that customer experience is important. 73% of all customers point to experience as an important factor in purchasing decisions. Customers expect companies to create journeys that make them feel valued, but this relationship is not one-sided. When companies create positive experiences, it’s a win-win for both the customer and the company. 

Positive customer experiences have been linked to not only an increase in revenue but can influence customer loyalty. To any company, a loyal customer is an ideal customer because of the behaviors that correlate with loyal customers.  A recent Temkin Group study found that customer experience influences the following loyalty behaviors in consumers:

  1. Recommend a company
  2. Repurchase from a company
  3. Trust a company
  4. Forgive a company
  5. Try a new offering right away 

The likelihood to perform these behaviors increased over 500% from 15% of customers to over 80% for companies providing great customer service. 

Recommend a Company

A consumer who has had a positive customer experience is more likely to share their experience with friends and family and recommend the company that created the experience. Customers tell an average of 11 people about a good experience. This word-of-mouth marketing is priceless -- and costs less. The rise in review sites is an example of just how powerful peer to peer recommendations are becoming and how important it is for your brand to create loyal customers. 

Repurchase from a Company

Positive customer experiences correlate strongly with repurchases. 87% of consumers who gave a company a “very good” rating on customer experience reported that they were “very likely” to purchase from them again. 

For your company, this translates into real dollars. Investing in a new customer is between 5-25 times more expensive than retaining an existing one. Loyal customers gained through positive experiences cost less to retain and have an increase in lifetime value. 

Trust a Company

Every time a customer has a positive experience with your brand, they trust you a little bit more. This trust built over time creates a relationship with the customer. The better the relationship with the customer, the more likely the customer will be loyal and advocate for your company. 81% of consumers who gave a company a “very good” customer experience rating say they are “very likely” to trust that company, whereas only 15%  who gave a company “very poor” customer experience ratings say that they are likely to trust the company.

Forgive a company

Companies, like people, are not perfect. They will make mistakes from time to time. However, consumers are less likely to forgive companies. After one negative experience, 51% of customers will never do business with that company again.  The pressure to deliver a positive experience for customers is definitely present, whether your brand is aware of it or not.

Consumers who have had positive experiences are more likely to forgive your company when a mistake does happen. 67% of consumers are “very likely” to forgive a company for a mistake if they think it delivers a “very good” customer experience.  Creating loyal customers through positive experiences protects your brand from mistakes that are bound to happen. 

Try a New Offering Right Away

Trying a new product or service after it’s been introduced is a behavior that customers who have had positive experiences are more likely to exhibit. In the Temkin Group study, 58% of consumers who gave a company a “very good” rating, reported being “very likely” to try that company's new product. This is powerful for a company wanting to expand their current offerings. The company not only has customers who will try their new offering, but who can give feedback on how well a new offering is solving customer’s pain points.                                               

Companies that invest time in creating positive customer experiences create loyal customers. This loyalty improves all aspects of your business including revenue. To learn more about how customer experience can help your brand, check out our customer experience guide. 

If you want to learn more about Nuvi’s solutions and how we can help you improve your customer experience journey, call our solution experts at 1-801-753-0926 or email us at cxsolutions@nuvi.com

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