Why take customer experience seriously?
Customers breathe life and growth to our business. It’s crucial that those same customers want to stick around. We all know this, but being an engineer with a love for numbers, allow me to use a few statistics to highlight the huge business value potential of customer experience (CX).
Good customer experience means good business
Let’s first look at the stock market. Watermark Consulting’s 2015 customer experience ROI study examined the top 10 (“Leaders”) and bottom 10 (“Laggards”) publicly traded companies in Forrester Research’s annual Customer Experience Index rankings against companies in the S&P 500.
According to the study, over an eight-year period, companies that lead in CX outperformed CX laggards by 80% in terms of stock market value. This provides a convincing illustration of the business value of CX over time – companies that deliver quality customer experience are rewarded in the long-term.
I often get the question about how to increase the quantity and quality of customer referrals. I believe the most effective way is to make your existing customers want to refer you. It can be as simple as asking them to refer you and making it easy and fun for them to do so. American Express’s 2014 global customer service barometer survey found that on average, happy customers tell nine people about their experiences with a company. Word of mouth (WOM) referrals from friends or family are the most cited reason for customers to try a new product or service, beating sales/marketing materials, reviews and advertisements by a large margin.
CX can help reduce your customer acquisition cost by allowing you to focus on existing customers, making them happy and increase their share-of-wallet while helping you to acquire new customers at the same time. According to Harvard Business Review’s research titled “The Value of Customer Experience, Quantified”, customers who had good CX spend 140% more compared to customers who had a poor CX.
CX requires commitment from management, just like all other key elements of a business. I often see that CX is not being taken seriously because it’s not considered part of the core business. Many people have asked me: How can I get my management to give CX a higher priority? My response would be to ask management what the alternative is. What can replace CX? Investments are meant to generate more value. As digital is growing (e.g. Ecommerce sales in Asia-Pacific grew 35.7% to a total of $877.61 billion in 2015), so is the need of CX investment.
How to start?
If you agree that customer experience is worth focusing on, next question is where to start. Consider starting these five things:
- Map your customer journey and get an integrated customer view across all touchpoints. This understanding is critical, and it provides you with a baseline.
- Do a data audit for insights: Data drives personalization. Learn about the likes and dislikes of your customers with the power of data.
- Develop a personalization strategy. Achieving this requires technology and services – they go hand in hand.
- Listen to your customers, through traditional and newer channels as consumers are now looking to build relationships with brands beyond the transaction.
- Do a thorough review of user experience on your website. While there are many touchpoints for consumer interaction, website is your 24-7 store front. Make the experience right on your website can go a very long way.
There is no better time than now to enhance your business’ customer experience. Consumers are expecting more from brands, and non-action is a risky business. The good news is that there are valuable insights from data, technology and proven methodologies available that will help you achieve your customer experience goals.
The writer is Anders Engel Soerensen, director of digital, APAC, Epsilon