Does improving Customer Experience metrics affect market share?

A customer's positive shopping experience can affect many areas, from finalizing a purchase through repeat purchases and brand loyalty, but also whether they will pass the positive information on, to family/friends, or add a complimentary comment or review online.

The more positive a customer's experience with a brand, the more favorable their impact on the company. There is no denying that customer experience drives business growth. According to Bain & Company (https://www.bain.com/insights/are-you-experienced-infographic/#), companies that dedicate themselves to improving customer experience can increase their revenue by up to 4-8% compared to other companies in the industry that do not analyze the experience.

A study by Dimension Data (https://www.prnewswire.com/news-releases/new-research-from-dimension-data-reveals-uncomfortable-cx-truths-300433878.html) also found that 84% of companies that work on improving customer experience saw an increase in revenue, and 79% saw cost savings. According to McKinsey (https://www.mckinsey.com/industries/retail/our-insights/personalizing-the-customer-experience-driving-differentiation-in-retail), creating personalized shopping experiences can not only increase sales, but also reduce marketing and sales costs by up to 20%.

It's clear that creating an exceptional customer experience - from the beginning of the customer's buying journey to the end - is key to retaining customers and attracting new ones. Small steps, if done correctly, such as being more responsive, soliciting feedback, focusing on personalization and convenience, and implementing a logistics management system, can effectively drive business growth.

Thanks to the annual Omnichannel survey, we can observe the described regularities on hard data. The survey allows us to get to know the average Polish Internet user. So, is it possible to say that in the Polish market, improving CX metrics affects increasing market share? The answer is one - IT DOES… Why? Because it's not possible to say unequivocally whether the listed companies are working on improving their customer experience metrics, but it can be assumed that the brands that are improving the value of CX ratings year after year care about this area. It's also worth remembering that market share is heavily influenced by brands' price-related activities (promotions, discounts or rebates), which are still the most important for Poles (although we've seen a year-on-year decline in indications for this answer). We are paying more and more attention to all the circumstances surrounding the shopping process.

Focusing on the Omnichannel survey data, we note for the Media Expert brand increases in the individual elements comprising the customer experience which correlates with an increase in market share (from 21% in 2019 to 35% in 2022). On the other hand, for the House brand (from the LPP family), we have seen slight decreases in the shopping experience score since 2020, and in this case we also observe a decreasing market share (from 9.5% in 2020 to 8% in 2022). The situation is similar when the beauty brand Avon is taken under analysis, increasingly lower CX ratings correlate with a declining market share (from 9.4% in 2019 to 5.8% in 2022).

On the other hand, there are cases in which CX indicators are rising while market share is falling - this is illustrated by the case of Polsat Box, Play, Media Markt and Reserved or Rossmann, which, despite declines in market share, is still the undisputed leader in its industry. We can also talk about the absence of upward or downward trends, that is, when the situation changes dynamically from year to year, here it is worth mentioning Ikea or Leroy Merlin, but also UPC, Orange, Super-Pharm or Eobuwie.

However, it is important to remember that companies do not exist in an ideal world, where the external environment (economy, geopolitical situation or legal restrictions) does not influence consumers' purchasing decisions. Market share is not influenced only by consumer experience, but by variables such as price or the proximity of the outlet to the place where one lives. Therefore, it is difficult to talk about examples that unequivocally refute the thesis that positively brand customer experience affects market share. It is worth remembering that nowadays, when competition in every industry is extremely fierce, CX remains one of the key elements to focus on in the long term, in order not to be pushed out of the market.