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The COVID-19 pandemic altered consumer behavior, possibly permanently, and shaped a world that's now more reliant on technology than ever before. In this new, more competitive environment, an organization's ability to foster customer loyalty will determine its future.
As it turns out, businesses have an excellent opportunity to win over prospects and customers in the digital world: customer experience (CX). By paying the right attention to the right details, organizations can use CX to charm prospects, improve satisfaction scores and retain existing customers. When businesses focus on exceeding expectations at every step of the journey, they build loyalty.
That's because customer experience drives over two-thirds of customer loyalty, outperforming price and brand combined, finds Gartner. The two are inextricably linked, and the tight relationship means CX is just as important as a company's services or products.
Since the start of the pandemic, more than 75% of consumers in the U.S. have changed their shopping behavior, and the majority are shopping through digital channels. They're more focused on convenience, availability and value, McKinsey reports. This shift means companies need to think about every aspect of the customer experience, from the online shopping cart to curbside pickup and support options.
For businesses to be successful in a post-pandemic world, it will be essential for them to adapt to digitalization, reward customer loyalty and align their marketing with the values of consumers. Let's take a deeper dive into each of these areas.
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Adapting to Digitalization
E-commerce sales have skyrocketed in the last year. According to the U.S. Census Bureau, consumers spent $211.5 billion online during the second quarter of 2020, a sharp increase from the first quarter of 31.8%. In fact, e-commerce had the same amount of growth in three months that previously would have taken 10 years, McKinsey says. This has caused unprecedented strains on many facets of business.
At the same time, consumer expectations for service changed. To meet safety concerns, businesses began offering no-contact pick-up or delivery. As a result, today's customer journey is sharply different from what it was prior to the pandemic.
Since the switch to digital happened swiftly, businesses and consumers alike are trying to catch up. For example, accessibility can be an obstacle for people with disabilities and older demographics. Fifteen percent of the world's population is disabled and a third of those 65 and older are not confident in their ability to navigate the web or use electronics. Businesses should make it a priority to adapt their digital services and ensure they're accessible to all. In doing so, they'll elevate the customer experience for a significant share of their audience.
Cybersecurity is also a concern. Protecting customer data and ensuring trust should also be at the forefront of the focus on building a better experience.
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Rewarding Customer Loyalty
Businesses can leverage the rapid increase in digital adoption to connect with and secure new loyal customers. Customers like to be valued by brands they support; effective loyalty programs do just that.
Gina Fleck, Senior Director of Strategy, Insights, Promotion and Loyalty Solutions at Merkle, Inc. says brands were pushed to "accelerate innovation in areas like technology, partnerships and rewards, and that has led to brands connecting with customers in new ways." Indeed, during the second quarter of 2020, enrollment in loyalty programs increased 7%.
Consumers are loyal to brands that are reliable and offer the products and services they're seeking. But the COVID-19 landscape has created a type of free-for-all when it comes to customer loyalty. If a product or service is not available, the customer will seek it out elsewhere, and perhaps favor the new business due to a better CX. By focusing on the integration of CX and loyalty rewards, businesses can hold on to customers even when times are tough.
Emphasizing Empathy in a Post-Pandemic World
Customers are experiencing a collective trauma, with risks of exposure to a deadly virus, on top of everyday life being affected by lockdowns and restrictions. Businesses can improve the customer experience by emphasizing care and empathy at every touchpoint.
Trust and safety are extremely important. Brands that deliver tone-deaf messages through marketing aren't likely to build strong or lasting customer relationships. According to Forbes, "companies that provide an emotional connection with customers outperform the sales growth of their competitors by 85%." Human connection has always been at the core of CX, and now it's more important than ever. All messaging needs to reflect that.
Positive emotional experiences drive customers to make purchasing decisions, and therefore drive customer loyalty. According to Gerald Zaltman of Harvard Business School, "95% of purchasing decisions are made by emotions." Brands cannot afford to sit on the sidelines in silence during crises. Values matter to today's consumers and play a large role in CX.
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Investments in enhancing customer experience like seamlessly integrating digital and in-person touchpoints and striking the right tone in messaging will be vital for building customer loyalty in the future. As we move into a post-pandemic world, businesses that put the customer front and center will be the winners in the new economy.
