What Small Businesses Need to Know About Customer Experience

If you were to ask around, you’d probably discover many answers about what it takes to find success in managing a business. There’s lots of essential skills and knowledge required that span many areas, but there’s one key ingredient that most agree on.


Customer Experience


Few marketing or business strategies compare to customer experience. It’s a strategy small businesses can (and should) focus on that help in a variety of ways.


The customer experience involves many aspects, and one to address is engagement.


Interaction with customers being at the top, engagement comes in many forms, from social media to responding to reviews. This visibility can influence the consumer’s decision about choosing to do business with you. It’s not just what’s said, but also how it’s handled, and even where. First impressions being what they are, customers often discover a business online through search or social, and many refer to online reviews to get a sense of the company.


Besides the social proof of ratings, whether you respond and how you go about it have influence as well.


The customer experience is often regarded as a journey. It’s definitely more of a marathon than a sprint. When a business puts focus and emphasis on improving the customer experience, they’re building a relationship that can provide measurable results such as repeat sales and referrals. A business should look at the Lifetime Value (LTV) of a customer, and not as individual sales. Doing so only helps drive growth and revenue.


But not all customers share the same enthusiasm for a business. In fact, it’s been found in more than one study that less than 10% of customers feel the business provides the exceptional customer service or experience that the business believes it provides. If you aren’t listening, it’s likely you’ll assume the best. This is a disservice to your business and it’s potential to grow.

Talking to your customers is a good place to start, but also watching social mentions and monitoring online reviews for overall sentiment provides insight, which is also an opportunity to resolve issues and address concerns with dissatisfied customers, before they’re gone for good. You can’t be overly selective when engaging, as it’s equally as important to reply to good reviews as well as responding to the bad ones. Not to say you need to reply to every single one, but it’s something you should aim for.

While good relationships are hard to build, trying to grow your business without taking care of your customers makes it harder, and more expensive. Customer churn is something businesses of all sizes should focus on. Even a 2% increase in customer retention can have the same effect as decreasing costs by 10% (book: Leading on the Edge of Chaos) and that’s something within the grasp of any business to improving their bottom line. According to Bain consulting, a 5% reduction in dissatisfied customers can increase profits by 5-95%, and it costs about 6-7 times more to acquire a new customer than to keep an existing one.


"Customer service is the experience we deliver to our customer. It's the promise we keep to the customer. It's how we follow through for the customer. It's how we make them feel when they do business with us."

Front Lines


The customer experience starts with employees. Every customer interaction makes up most of it, but can also be influenced by there are other factors like store design/cleanliness, packaging, and other indirect touch points including invoices, email, and more.


About 67% of customer churn is preventable if the customer issue was resolved at the first engagement, and 85% is due to poor service that was in fact preventable.


It’s the first exposure to your business or brand that triggers the the customer experience journey, which includes your online reputation, that can influence whether they’ll choose to do business with you. Once they have, it’s customer service that weighs heavily on experience.


Other factors that can influence the customer experience include;


Timeliness - customers want their questions to be answered quickly


Delivery - resolve problems quickly, and deliver on promises


Ownership - take responsibility when things go wrong


Attitude - treating customers with courtesy and respect goes a long way


Empathy - approach a situation with empathy and irate customers usually calm down


Dependability - when you make a commitment to a customer, follow through


A customer is 4 times more likely to defect to a competitor if their problem with your business is service-related, rather than price or product related issues. Additionally, over half of customer requests for service on social media are not acknowledged, and this includes online reviews.


Customer needs should be addressed promptly. It’s part of your path to developing an exceptional customer experience, while improving retention.


Businesses are built on retention, so yours shouldn’t be a revolving door of new customers.

Share with your employees and staff just how crucial the customer is. Make them understand that if it wasn’t for the customer, there wouldn’t be a business, and how important retention is.


Retention IS Growth


When you’re marketing to a new customer, your chance of persuading them to make a purchase is a challenge. But when dealing with a repeat customer, your chances increase significantly, and with each successive transaction, the likelihood of them coming back increases.


As your customer needs are met, their loyalty increases. But it isn’t enough to merely meet expectations, as a truly great customer experience is about exceeding them. When this is accomplished, and maintained, it’s then that you begin to earn referrals, which is possibly the best form of marketing as it comes with a personal recommendation. 


Word of mouth marketing isn’t a campaign you can turn on, and it takes some work, but it’s one of the best investments.


While research shows that improvements in customer service improve retention, loyalty and revenue, it also can impact new customer acquisition. In cases where a business draws local interest in the way of product or services, when you’re able to acquire positive online reviews, these act as digital word of mouth referrals that not only influence customer decisions, it also influences local search results and helps your SEO.


When you start to think about the value of customer experience, retention, and how important it is to your business, consider that 80 percent of future profits come from 20 percent of current customers.


The customer experience is significantly influenced by customer service, but as mentioned, that journey starts at the first interaction with your business. So when a potential customer is searching for a local product or service, such as a restaurant, accountant, contractor, doctor, dentist, lawyer, salon, or a variety of other options, it’s online reviews that they’ll probably come across first, and that has a real influence on whether they decide on using your business.

Competing on price alone is a tough endeavour. Customer experience provides value. Focus on amazing.


A customer looking for a hotel wants an experience, and often the same with a restaurant and other hospitality. But when a customer is looking for auto service or a contractor, they might want someone to do the job right, but preference often goes to an exceptional customer experience at the same time.


We leave you with some quotes. Even if many of these are Fortune 500 companies, the reasoning applies to any business. 


Even if you’re a sole proprietor, mom and pop operation, or a run a small crew, the following still apply.

“The best advertising you can have is a loyal customer spreading the word about how incredible your business is.”


- Shep Hyken

“Customer experience is the new marketing.”


– Steve Cannon, Mercedes Benz USA


“The goal as a company is to have customer service that is not just the best, but legendary.”


- Sam Walton, founder of Wal-mart


“Focusing on the customer makes a company more resilient.”


- Jeff Bezos, Amazon


“When the customer comes first, the customer will last.”


- Robert Half


“Every company’s greatest assets are its customers, because without customers there is no company.”


- Michael LeBoeuf


“Every employee can affect your company’s brand, not just the front-line employees that are paid to talk to your customers.”


- Tony Hsieh

“Courteous treatment will make a customer a walking advertisement.”


- J.C. Penny

"You never get a second chance to make a first impression."


– Will Rogers

“Your most unhappy customers are your greatest source of learning.”


- Bill Gates, Microsoft