If there’s one reason we have done better than of our peers in the Internet space over the last six years, it is because we have focused like a laser on customer experience, and that really does matter, I think, in any business. It certainly matters online, where word of mouth is so very, very powerful.
                                                         Jeff Bezos

photo credit: niallkennedy via photopin cc

This quote from Amazon founder and CEO Jeff Bezos represents a sort of "north star" for me--user experience is a guiding principle upon which I set my professional compass. Give people what they want and make it easy, and you succeed. At least, that's the theory, but in the last few years, I have come to feel my compass does not always align to the actions of today's most popular online services. Some have lost the customer experience religion, and I predict a few of our top digital services may soon have "come to Jesus moments" with their increasingly annoyed and neglected customer bases.

The user experience of many top sites and services has become mediocre, and this is happening at a time when the tools of competition have never been more available or less expensive. The growth of social and mobile technology, advent of wearable tech, arrival of the sharing economy, rise of cloud services and ever-lowering cost of developing scalable digital products will bring new and better alternatives. I have been lucky to attend many of the New York Tech Meetups in the past year, and the creativity, power and polish of these tiny startups demonstrate that there are many capable Davids looking to defeat today's overly confident Goliaths.

I predict a wave of change in the next several years. Either the functionality and usability of the sites and tools we all love and use will evolve rapidly, or consumers will soon adopt new sites and tools to love and use. Some will argue the companies I cite as examples have grown too big and have too much traffic and too many users to fail, and to them I say this: Monster.com, Myspace, Goecities, Prodigy, AOL and Excite. This last site is an excellent example, because many people today would be hard pressed to recall Excite, but the company reached a peak market valuation of $35 billion in 1999, more than LinkedIn's or Yahoo's market cap today. No one is safe--even the most popular online services can lose loyal customers to competitors offering better customer experience.

It is hard to understand why some businesses need to relearn the importance of customer experience when the lessons are still so fresh. Bezos' observation tells the story of why some online firms succeeded and others failed, both in the halcyon days of the dot-com boom and the distressing years following the bust. Prodigy and Excite, with their pages full of blinking and distracting ads, are gone, while Google's clean, white interface lives on. A thousand e-tailers went bust, but the transparent consumer ratings and one-click purchasing of Amazon earns ever more customers and retail dollars.

But even if one is not familiar with recent history, the importance of customer experience is evidenced by a constant barrage of studies and surveys:

• The Temkin Group studied the attitudes of 10,000 US consumers and found that "Customer experience leaders have more than a 16 percentage point advantage over customer experience laggards in consumers’ willingness to buy more, their reluctance to switch business away, and their likelihood to recommend."
    
• In the Business Impact of Customer Experience, Forrester estimates that moving from below-average customer experience to above average would yield more than $3 billion of annual revenue benefit for wireless carriers, more than $1 billion for hotels, $262 million for insurers and $227 million for retailers. Forrester further finds that brands are not performing well in this regard--its 2013 Customer Experience Index found that 61% of brands rank okay, poor or very poor in customer experience compared to just 8% that rank excellent.
    
• The 2013 Edelman Trust Barometer found that consumers value companies that "listen to customer needs and feedback"--this attribute ranked a mere one percentage point behind "quality products and services," and the gap between consumer expectations and company performance was much larger.
    
• According to the 2011 Customer Experience Impact (CEI) Report, commissioned by RightNow and conducted by Harris Interactive, 86% of buyers will pay more for a better customer experience, but only 1% of customers feel that vendors consistently meet their expectations. The same study found that 89% of consumers began doing business with a competitor following a poor customer experience and 79% of consumers who shared complaints about poor customer experience online had their complaints ignored.
  
• Accenture recently found that the performance of digital orientation in high-growth companies is 21% greater than in negative sales growth companies. CMOs in high-growth companies have found a less turbulent path by working across the organization to infuse a digital focus in all business processes and functions and improving the digital customer experience.
    
• Avaya released a 2013 study that found 63% of consumers say they would be extremely likely to continue spending money as a result of an exceptional customer experience, while almost half are extremely likely to stop spending money with companies as a result of a bad customer experience.

It is obvious customer experience is paramount, but someone needs to remind today's most popular web sites and digital services. I think three services are on the bubble in the next three to five years, and the rest of this week I will explore how Groupon, Yelp and Facebook may be facing customer experience crises that could hurt their bottom line and limit future growth potential.

These three are hardly alone--in recent months I've had frustrating experiences with the web sites and customer service processes with a variety of firms, from giants like Sprint and Comcast to tiny upstarts like Pebble. Still, Groupon, Yelp and Facebook are good companies to focus on because all have risen quickly and have much to lose if the companies do not rapidly improve customer experience.

In the next few days, I hope the lessons learned about these three companies may provide you with some guidance and ideas to implement at your own organizations. As always, I welcome your input about the companies you see as being at risk due to disappointing customer experience and the ways you feel customer experience will affect business in the coming years.