Is Customer Experience Impacting Your Revenue?
Have you ever wondered what you would experience if you were a customer of your business? If you haven’t, you should. The Customer Experience (CX) topic appears to be the most complex business management discipline there is. On the surface it seems to be rather simplistic, but one trek down the Customer Experience path will quickly show you how dynamic this topic has become. Clearly all aspects of the topic are relevant, but the essence of the message seems to be getting lost in all the noise. Just google it and see what you find.
Customer Experience definitions incorporate a multitude of perspectives. You’ll find definitions that focus on brand, processes, relationship management, purchase experiences, and some as broad as “all company interactions”. Further descriptions incorporate topics such as culture, leadership, management systems, data management, customer intelligence, connected or engaged employees, continuous innovation, planning, loyalty, strategy, relationships, pricing, sales, emotional connections, value propositions, commitment, expectations; and the ultimate dichotomy, simplicity.
Well, here’s my definition of Customer Experience using my KISS (Keep It Simply Simple) method.
“The overall experience a customer has with your company.”
So why are we making this so complex? The amount of attention that gets associated with any particular business management topic is typically in direct correlation to the value or costs associated it. The same is true for Customer Experience. We’ve all heard the saying, “It costs a lot more to find a new customer than it does to retain an existing one.” This is true and if we lose an existing customer the cause is generally going to be associated with one or more of the descriptions and topics used in the Customer Experience definitions.
But, is it really that valuable, or costly? Well, based on the information presented by Blake Morgan, Senior Contributor for the CMO Network in her article, “50 Stats That Prove the Value of Customer Experience”, here are a few perspectives to consider.
- 96% of customers say customer service is important in their choice of loyalty to a brand.
- Brands with superior customer experience bring in 7 times more revenue than competitors that lag in customer experience.
- Customer-centric companies are 60% more profitable than companies that don’t focus on customers.
- Loyal customers are five times more likely to purchase again and four times more likely to refer a friend to the company.
- Customers tell an average of nine people about a positive experience with a brand, but they tell 16 people about a negative experience.
- A 2% increase in customer retention is the same to profits as cutting costs by 10%.
Ok, you get the point. Customer Experience has a high degree of value when done right, or high cost when it fails. As with most business issues there’s always a way to quantify it. Two calculations dominate the customer experience valuation perspective. Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLV). For a variety of reasons, it’s important for you to understand the CAC and CLV within your company. The detail behind that is meant for another blog, but if you have questions please let me know. At this point, suffice it to say, that replacing a lost customer is awfully expensive. Hence, all the dynamic strategies and definitions surrounding Customer Experience.
But let’s boil this down to what’s really the problem. While Customer Experience continues to evolve and be impacted by the use of technology and the digital marketplace it still comes down to what the customer experiences. If you haven’t walked in their shoes through your product purchase, delivery, and service processes, how do you know what their experience really is? Here’s what customers know. They know when it’s a bad experience. And, here are some that I’ve had over the past 90 days,
- Online Social Media Marketing webinar, $250 paid, unable to connect, provider admitted fault in registration, offered a recording in lieu of the interactive presentation, failed to provide course materials, took 2 months to provide a functional recording, and failed to provide the $50 discount that should have been applied at registration. Result: I won’t use them again nor recommend them to others.
- HVAC provider engaged to repair an electric heat pump, provider arrived and determined what part needed replacement, asked that I order it, and they would come back and install it, I got the part and they never returned for the installation. Result: I signed a HVAC service contract with another provider.
- Online meeting provider. I utilized well known online service exclusively for all my business meetings. The provider was double billing me for several months. Called their service number 4 times to be put on hold for 20 minutes each prior to the call automatically disconnecting. Finally reached them and their billing department was to call me back, never did. Finally reached them a second time and got the billing changed. No refund for their mistake that I paid for over 5 months. Result: I found another provider and quit their service.
I have at least 6 other examples over the course of 90 days. None of those providers will get my business. It’s not that complicated but when management doesn’t pay attention to what’s happening at the customer level they might as well be burning their revenue streams. Here’s 5 simple rules to ensure that any person or process delivers on customer experience.
- Everything should be committed to solving the customers problem.
- The company, its people, and processes, must take ownership to providing the solution.
- Treat the customer with the utmost respect. Listen for Understanding, Speak with Respect.
- Communicate timely and often with the customer, even when it’s bad news.
- Correct YOUR mistakes. Never make the customer feel as if it’s their problem.
Seems simple enough, but if you don’t understand the experience from the customer perspective, you’ll never fix it. Getting 5 stars doesn’t even begin to tell the real story. Walk their walk, focus on providing an excellent customer experience and reap the revenue.
For more key tips on business success check out my other blogs and connect with me at https://www.StrategicOrientation.com/Blog and Linked In.