It’s not too hard to listen to the customer. Companies are receiving enormous quantities of real-time feedback if only they pay attention to customer’s opinion. You often know as a leader what your customers think about your products and services. As well as where the key areas for improvement are. And yet it’s hard to act on the customer feedback.
For many companies, it is the hardest part of the whole customer experience management process. Sometimes this is because of a lack of ownership in the company – when an issue exists because it falls between organizational silos, improving the customer experience requires some extra effort.
But organizational silos are not the only reason not to act on customer feedback in many cases. Money-or rather the lack of it is often the hardest challenge to overcome.
The people driving improvements in customer experience are not always able to quantify the monetary improvements. If you improve customer support agents’ availability, you certainly know how much that will cost. As a business leader, you are extremely familiar with numeric metrics-your goals are most likely to be revenue growth and profitability.
There is a lot of research and studies on the relationship between financial metrics and metrics of customer experience. Later I’ll go through how you can progressively understand what the value of the better customer experience is for your business.
IMPROVED CUSTOMER EXPERIENCE DRIVES REVENUE GROWTH
Analysis by Bain & Company in 2015 showed leaders in customer experience growing revenues 4 per cent – 8 per cent above their market. Bain & Company’s analysis concluded that the revenue impact of enhancing customer experience is because the superior experience helps to earn stronger customer loyalty, turning them into promoters who tend to buy more, stay longer and make recommendations to their friends.
This is because people tend to trust other people’s review of certain products. If the service is approved by the other customers, that means you can be convinced to buy from the business.
Not only that, but people will also share their best customer experience on their social media platform, family and colleague. From here, the business possibly receives an unexpected amount of potential customers.
THE STRONGEST IMPACT RESULTS FROM IMPROVED LOYALTY
Next, revenue growth is generated primarily by the impact good customer experience can have on improving customer loyalty. The likelihood of selling to a new prospect is 5-20 per cent, while according to Marketing Metrics the probability of selling to an existing customer is 60-70 per cent.
Murphy & Murphy estimates that a 2% increase in the retention of customers has the same effect on profits as a 10% reduction in costs. Therefore, improved customer retention for many companies often provides the most obvious rationale for making improvements to customer experience.
Investments from customer experience typically result in the highest return on investment in industries such as hospitality, retail, and consumer products, due to the various switching barriers. People leave your business if you manage to upset them, but they don’t leave a vendor whose customer experience is at an acceptable level, even if you provide something better.
MORE MONEY SPENT ON CUSTOMER EXPERIENCE IS NOT ALWAYS BETTER
As the research shows, it does make sense to invest in customer experience. In the long run, it pays off also being a perceived leader in customer experience. However, when you decide whether to invest in that particular training, add headcount or build a new, easier-to-use payment system in your online store, you’re not dealing with customer experience-related investments in general, but with one particular business case.
Failure to meet customer expectations could have serious negative consequences. Bad experiences impact negatively on customer retention and repurchase intentions. But it doesn’t necessarily pay off delighting customers more than expected. Failure to meet customer expectations has been shown to have twice the negative impact as delighting customers has a positive effect.
The matrix recalls how detraction can only be derived by certain drivers. If these aren’t working, you’ll lose clients. Some drivers have the potential to advance. These delight your customers when they are there but their lack does not usually lead to detraction.
And finally, some drivers can drive both promotion and detraction. The matrix is reminiscent of how only certain drivers can drive detraction.
Why don’t you ask your customers?
The drivers will disclose the why-comments when you ask your customers to give you feedback about NPS. If you do the groundwork properly once and make a connection between your NPS and financial metrics with one study, you don’t have to fight the business case work whenever you propose something new driven by customer experience.
If you know how your company’s NPS and revenues generally correlate, your daily work can move towards making improvements based on the feedback you get.
UNDERSTANDING THE ROI OF THE CUSTOMER EXPERIENCE IS DIFFICULT
Let’s check out another point. Is it true that understanding the ROI of the customer experience is difficult?
Find out about the challenges and priorities of the customer experience leaders, budget benchmarks, KPIs and customer centring. In most companies’ customer experience was measured but there was no systematic way to link this to financial results. The results were assessed in 26 per cent of companies using behavioural metrics.
But as the lack of budget is a significant issue in most customer experience organizations and the decisions are hard to make, it won’t hurt to be able to justify monetary changes as well.
You may not be able to prove the connection inside your business, because. Now, you may just start collecting customer feedback. Your customers may have been surveyed to obtain their satisfaction ratings, but there is no way you can link these data to behavioural or financial data.
What to do in that case?
Start collecting feedback via an affordable tool. These can include changing the way you communicate certain things, making your staff aware of their feedback and helping them change their behaviours through their development discussions. When you see these actions start affecting the customer experience, you’ve got your first points of evidence.
To sum up, improved customer experience does boost your ROI! Check out the points above and you can start to consider new strategies in making customer service as your business value. Some other way to boost ROI with top-notch customer service is by signing up for a TM Tollfree number.
You can never go wrong with having a Tollfree number for your business. Hit us up at 1 800 22 2020 or visit our website for more tips in improving your business, tollfreemalaysia.com. Cyngus Technologies – Complete your brand!
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