The customer experience (CX) has always been a priority for companies. But surprisingly, most businesses have had a (very) late-start to actioning CX strategies.
Over 80% of business leaders agree that CX offers a competitive edge — this remains unchanged across 2015 to 2020. Yet, only 26.2% fully define and track the value of CX. Even worse, the number of organizations dissatisfied with their CX capability has grown by 15% since last year. On a positive note, organizations with a structured Voice of the Customer (VoC) program increased by 36.5% in one year — but this is far from reaching full momentum1.
In other words, companies are trying hard, but are somehow failing to bridge the gap.
In today’s connected world, there is no denying that the customer is king. For most products and services, they have a sea of options to choose from, and a negative experience can turn a customer away for good. Even in industries where competition is less severe (e.g., public utilities and education), it is easy to voice discontent using omnichannel platforms.
Deloitte pointed out five good reasons to prioritize CX, and they’ve never been as true as in 20202:
1. It helps when product differentiation is difficult to achieve
As the saying goes, there’s nothing new under the sun. Companies might find it hard to come up with a wholly new product, which causes the risk of appearing like an “also-ran.” This is particularly relevant for sectors like FMCG, consumer apparel, and, most recently, consumer-facing software apps.
A seamless experience will keep your customers coming back, increasing referrals, and customer lifetime value. In 2020, with so many of us facing inconvenience in daily purchases, a glitch-free purchase and support journey is a major differentiator.
2. You gain from organic promotions
Customers are your biggest advocates, and a happy customer will leave reviews, aid-in word-of-mouth marketing, and convert new prospects who on the fence. In addition to the product itself, a superior and repeatable CX is what’s most likely to garner loyalty (think Starbucks personalizing every cup of coffee with the customer’s name). In 2020, as our digital activity footprint grows, companies can gain from positive organic PR on social media.
Fun fact: customers are 19 percentage points more likely to share good experiences than a bad one, so there’s every reason to proactively prioritize CX3.
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3. Customers will spend more when CX is good
The quality of experience is a critical lever in cross-selling or up-selling. A customer might continue to use a product out of sheer need or habit but won’t want to invest any further if service, support, and the purchase journey aren’t seamless. Right now, as we prepare for economic flux and conservative demand from customers, companies need to drive up their CX quality if they are to grow the business.
4. A stellar experience equals loyal customers
The world’s most notable brands, in every sector, are recognized for the CX they offer. From Dominos’ 30-minute delivery promise to Amazon’s 24/7 customer support, and smaller businesses’ D2C models built entirely on experience — the examples are everywhere.
2020 will see businesses face several roadblocks to BAU operations. Those who continue to serve customers well despite this will capture a sizable market share. After all, we’d only value a product or service provider who values us.
5. It reduces your cost-to-serve
Did you know that the more a company invests in CX, the more cost-optimized that particular account becomes? By prioritizing experience, you save money in the long-term, making each existing customer more profitable and thereby reducing efforts needed for new customer acquisition.
A seminal report by Harvard Business Review found that positive customer experiences can slash your cost-to-serve by a third4.
These five facts not only illustrate the benefits of a good CX but also hint at its myriad facets — beyond the platforms of delivery. From company culture to your very business model, every element must be crated with a CX focus to ensure you meet the mark.
6. Customer Experience is a must for Customer Success
One of the challenges is that organization’s think CX and Customer success are two different streams. It is important to bring a sharper focus on the customer journey and link to your services/product. While customer success is an enterprise-wide focus on understanding what the customer is trying to achieve and then doing all you can to help them realize that goal.
CX is linked to engagement i.e. if users are logging in and using the application in the way they are supposed to and what is the intensity and duration of their engagement? While customer success is linked to the usage or lack of usage which not only indicates service utilization but as well as customer adoption of system/service which will affect customer outcome. It is important to track indicators like business outcome i.e. does the product’s results meet the customer’s initial purchase expectations and adoption of new features and services during the contract duration. In customer experience terms, we would like to make onboarding intuitive and logical. Messaging during the onboarding campaign should focus on engaging, personalized and event/activity driven. By ensuring the customer experience immersive, enjoyable and simple, we can achieve a higher customer success goal of delivering value to the customer.
Setting up a CX organization
I’ve often encountered companies that make CX a siloed KRA, assigned to one stakeholder/owner or department. While this makes governance relatively simple, it limits “experience” to just another function to be executed — in 2020, this simply isn’t the case. Companies need a mature CX organization with stakeholders looking after leadership buy-in, digital strategy, content, UX design, and finally, marketing technology.
Only then it is possible to achieve an integrated CX where customers witness the same, repeatable, and superior quality of experience from their first interaction at the Awareness stage, down to the Interest, Desire, and Action stages of the funnel.
In my next blog, I explain the organizational model necessary to drive CX excellence (which, incidentally, only 1% of companies have successfully reached)5. I also tell you the five metrics to measure for keeping a CX program on-track and technology stack that you could adopt for sustaining excellence in the mid and long-term.
Watch this space for more, and please email me at Arvind@am-pmassociates.com to discuss these insights in detail.24
This story was originally published on “Medium” and has been republished here with permission.
Arvind Mehrotra is a well-known thought leader, Strategic Advisor, and Board Advisor helping start-ups and mid-size organizations to develop strategic plans, mitigate risks, develop platform strategies, and scale their business. You can connect with him on LinkedIn here.
Published December 16, 2021, Updated December 22, 2021