Growth IQ By Tiffani Bova

What makes a business competitive? The most common answer is price. But do you remember how much you spent last time you went shopping? Probably not. How about the last time you had a truly awful customer experience? Now that’s something you can’t forget!

So it’s not price but customer experience that’s key to gaining comparative advantage, especially in an era of instantly accessible online customer reviews. In fact, research shows that over 70 percent of customers use reviews to decide which service or product to buy.

Acting on that insight is the jet that can get your company off the ground. Take it from Shake Shack, a business that started out in 2004 as a single hot dog cart in New York’s Madison Square Park. Today, it’s a global fast food chain with 136 locations across the world. Its meteoric rise hinged on one thing: a business model that prioritized customer service. Shake Shack, in addition to using high-quality, locally sourced meat, encouraged customers to provide feedback and hosted roundtable discussions. The result? A huge number of positive reviews and posts across the web, which basically means Shake Shack’s customers take care of its marketing!

Neglecting customer experience, by contrast, can quickly undermine a business. That’s something Starbucks learned the hard way. In 2007, after a series of expansions into new markets and the introduction of larger menus, the coffee chain’s growth suddenly stalled. When Starbucks asked its customers for feedback, the message came back loud and clear: the emphasis on growth and diversification had ended up undermining quality. CEO Howard Schultz reacted quickly, closing over 7,000 stores for three-and-a-half-hour training sessions and installing high-end coffee machines in every outlet. The company also launched a scheme called “My Starbucks Idea,” which encouraged customers to share their ideas about how the company could improve its customer experience.

It was a savvy move. Within two years of the decision to reprioritize customer experience, Starbucks was back on track and growing steadily.