Want to Improve Customer Loyalty? Be More Human.
When the Qualtrics XM Institute surveyed over 33,000 consumers across 29 countries about what makes them loyal to brands, they uncovered an interesting response: Real human connection.
“Particularly after the global pandemic, customers are increasingly concerned in finding real experiences that satisfy, rather than just another transaction,” the study says.
When everyone seems increasingly behind a screen, and almost half of employees still work entirely or partially from home, these insights are a wake-up call to businesses that customers still crave person-to-person interaction in both the physical and digital worlds.
The human factor missing from customer experience
In the 2022 report, XM Institute found that:
- 63% of consumers said that companies needed to do a better job of listening to feedback.
- 62% of consumers said businesses need to care more about them.
- 36% of consumers are still unhappy with the empathy shown in their customer service interactions.
We can’t necessarily blame companies for this misstep. They’ve had many tricky circumstances thrown at them in the last few years, from Covid-19 to supply chain issues, labor shortages, record-breaking inflation, and looming recession. Businesses are in survival mode, where there is a tendency to continue the bare necessities to stay profitable.
However, the XM Institute research shows that businesses that outperform the market focus on customer experience rather than operational wins. These brands saw their gap in stock prices soar from 24% points in 2019 to 66% points by the end of 2021.
What is considered an excellent customer experience?
Customers who rate an experience 5/5 stars are more than twice as likely to buy again, and 80% of satisfied consumers spend more, the XM Institute research highlights. But what makes for an outstanding experience?
A 2022 Redpoint Global survey revealed that 74% of consumers are more loyal to a business if they feel understood and valued, 64% would prefer to do business with a company that knows them, and 34% would spend more on a product from a company that knows and understands them. Knowing and understanding customers and then conveying that in your communications and service can be described with one word: personalization.
According to a study from the University of Texas, preferences for personalized experiences connect to a desire for more control and less information overload. Consumers feel more in control if they get an experience beyond the pale—if they receive a message or offer tailored to them, it’s not what another customer got. They feel special and like they’re in the driver’s seat. In terms of information overload, personalization cuts through the noise of a consumer’s other options. This lessens feelings of overwhelm and confusion among consumers (if you don’t believe this, just read the book The Paradox of Choice).
In this way, personalization builds trust by showing you care for the customer, and they, in turn, feel confident you can respond to their needs and wants. McKinsey research shows that 76% of consumers are more likely to purchase from companies that personalize. The top five personalization actions consumers most want, according to the study, are:
- Easier online and in-store navigation (76%)
- Personalized product or service recommendations (67%)
- Tailored messages (66%)
- Relevant promotions (65%)
- Personal milestone celebrations (61%)
How to add a human touch to personalize customer experiences
We understand that your business might only be able to personalize some customer interactions. That’s OK. You have to start somewhere. The tips below can help you get in the mindset to begin communicating with your customers on a more human level.
- Be available across channels: Customers want options for buying from and communicating with you. If, for instance, you only offer one or two ways for customers to receive and pay their bills, you might consistently get paid late and also eventually lose their business. Be available via website chat, email, text, social media, phone, and in-person—in whatever way a customer wants to reach you.
- Engage in actual dialogue: Consumers don’t want a one-way conversation. Ensure your customer support functions include the ability for individuals to respond, ask questions, and share their thoughts. Yes, automation goes a long way. But there should also be an option to connect with a live human who goes above and beyond to understand what a customer needs.
- Minimize friction: Set up your website and other media to be easily accessible and navigable. Don’t bury the information; make all your contact information visible, and point customers to well-organized content based on what you know about them.
- Ask for, and analyze feedback: If you’re an omnichannel brand, you will have a vast amount of customer data from channels such as your contact center, social media posts, polls, surveys, email responses, website actions, online reviews, and more. These areas map how your customers feel about your products and customer service. Interrogate this feedback and consistently ask for more so you can understand your most significant areas for improvement. And make sure you ask for input before a customer becomes unhappy—post-purchase or after a certain length of time as a customer.
- Acknowledge mistakes swiftly: To err is human. Part of today’s customer expectations, especially among younger consumers, is that brands cop to their mistakes as quickly as possible. This can be an email blast to the entire customer base or specific segments, social media posts or direct messages, SMS responses, phone calls, and more. Whatever you did, and in whichever way it makes sense to deliver the apology, just make sure you do it in the first place.
- Tailor offers to customer preferences and behavior: Your customers already tell you a lot about them based on their products and services, their preferred communication channels, and the offers and messages they most engage with. It’s up to you to use this holistic information set to design specific experiences for each customer.
If you’re looking for a partner to help you better engage with your customers, OSG offers a customer experience management platform designed to personalize interactions across the customer journey. Get in touch today to learn more.