Why Customer Experience is the key to success
Organizations that carefully manage the customer experience maximize customer satisfaction and improve revenue. We name the reasons and the way to get there.
Manage customer experience carefully
Customer Experience is the new brand.
One can see the role models: Amazon, Netflix, Uber. They all offer consumers the best possible shopping convenience with an outstanding Customer Experience (CX). What do they have in common? They use customer data to improve their offers and the shopping experience, making it more personalized and convenient. When compared to other market players, they appear almost like dream catchers. With their example, they are challenging other companies to design interconnected experiences - regardless of the channel and customer contact point. The customer can and is expected to enjoy the experience wherever and however he wants to interact with the company. Briefly: Organizations that carefully manage the customer experience will maximize customer satisfaction and thus increase sales.
5 Major Reasons of Outstanding Customer Experience
1. Differentiation
Companies that offer a distinct customer experience stand out from their competitors. Customer experience is expected to be the most important differentiator for companies in 2020.
2. Promotion
Studies indicate that customers who had a good brand experience tell an average of nine people about it . Customers who had a bad brand experience tell an average of 16 about it. This means that if a customer has a bad brand experience, the company loses sales and, in turn, a good brand experience at zero acquisition costs leads to new customers and further sales.
3. Customer turnover
Customers who have the best customer experience spend 140% more compared to those with the worst experience. They also have a 4.5 x greater willingness to pay a premium price. In addition, they have a 3.6x greater willingness to purchase additional products and services from that company.
4. Loyalty
Customers with outstanding experience have a 2.7 x greater willingness to continue doing business with that company compared to those with a bad experience.
5. Cost to Serve
Companies that provide outstanding customer experience reduce Cost to Serve by 33%. Customer referrals attract new customers at zero marketing acquisition costs.
7 Ongoing Challenges Implementing a Customer Experience Strategy
Creating the correct customer experience is not an easy job. A company needs to have access to relevant data from important customer touchpoints. What are the biggest challenges a company may face?
1. Lack of customer focus
Even if senior management shows an apparent willingness to focus on customers, the rest of the company is still characterized by traditional thought patterns such as inside-out thinking. This discourages customer-focused initiatives that turn the differentiated customer experience into a business advantage.
2. Insufficient Data Insights
Although there is broad access to customer data, companies are not able to gain insight from the data. There is a lack of know-how to optimally integrate the huge amount of data and to transform it into insights. This is why customer experience initiatives are not efficient because they do not work properly without qualitative data related to consumer preferences and behavior. Decisions are thus still made from a gut instinct and not on the basis of solid evidence.
3. Silo thinking and organizational barriers
The departments frequently do not have a common understanding of the CX strategy. They failed to adequately define and coordinate internal processes, functional interfaces, CX principles and responsibilities. This will inevitably lead to a misunderstanding of "who is supposed to do what".
4. Incomplete CX measurement
In order for budget owners and managers to commit themselves to customer experience, they will require a substantial statement on the return on investment. However, many companies stumble when it comes to determining the appropriate key figures. This has made it difficult for them to relate the value of customer experience efforts to meaningful business metrics.
5. Outdated technological infrastructure
Most companies have now realized that, with the current phase of digitization, they need innovative, flexibly usable technology platforms in order for them to keep pace with the dynamics of change. However, they are not fast enough to innovate their existing IT architecture and keep pace with changing business requirements. They also require people with the expertise to easily integrate the new applications and systems into the overall enterprise architecture. If the organization does not have these resources, it will operate on the basis of outdated, separate technologies that are unable to provide managers with the necessary data for the right metrics.
6. Online mania
In the last few years, many physical points of contact have been replaced by digital interfaces (websites, apps, chatbots, ...). This has resulted in too strong a focus on online touchpoints and, conversely, a neglect of holistic customer travel. The customer journey includes both online and offline touchpoints. The two worlds are now separate and managed in their own silos. This prevents a seamlessly interlocking customer experience viewing and processing across channels.
7. Customer experience hyperactivity
For most companies, the improvement of the customer experience is a top priority. This leads to innumerable projects and programs aimed at optimizing CX. But the attempt to do all at once does not lead to an improvement of the customer experience, particularly for large market participants.
Source: Deloitte Digital “How the right CX Operating Model can pave the way to future success
The way out of silos and data leaks
It takes a great amount of time and resources to guide the company through the digital transformation process. But the time may be insufficient to coordinate and successfully execute all initiatives. If you want to ensure the long-term success of your organization, you have to place the customer experience topic at the center of your value creation activities and quickly implement it. If this does not happen, the company will be overtaken by dynamic market participants and lose relevance.
The two central success factors for achieving sustainability are:
- Relevant data and insights from customer interaction points
- Capable managers who are able to identify meaningful measures from the insights.
The basis for this is an Insights platform. It provides data and insights about the entire customer journey and about all key touchpoints (online and offline). The integration time is short as it is immediately ready for use, regardless of data integration difficulties and the existing technology environment. Innovative Customer Insights Solutions such as ECHONOVUM INSIGHTS PLATFORM are provided with an open API. This API can also be integrated subsequently or successively into the up-dated IT infrastructure. It is also scalable to the Employee Journey.
Customer Experience is the next competitive battleground. It’s where business is going to be won or lost.
With an Insights solution, a company can efficiently approach the Customer Experience initiative: Every relevant touchpoint is mapped on the Insights platform, and customer experiences are continuously and automatically collected for each interaction. Managers have access to real-time customer experiences by means of dashboards. They are then able to share their insights within the company immediately and proactively initiate measures. Their optimizations are founded on real customer needs and solid evidence.
Companies that differentiate themselves from other market participants with an outstanding customer experience already use customer insights today.
