Being a Customer Experience (CX) professional and having studied and practiced the art and the science of this wonderful CX discipline for over nine years now, (all within one organization) I pause to reflect on what the net result is of all the hard and dedicated work that we CX professionals have accomplished thus far and what we are yet to accomplish. I’m reflecting and writing this latest blog on the eve of the very first Customer Experience Day (CX Day) declared so by the Customer Experience Professionals Association (CXPA) as the first Tuesday in October from this point forward.
Regardless of the gains we feel we have made, I’m still perplexed at how many organizations still seem to struggle so much with the idea that CX should be a key and critical element within their strategic business plan. Those organizations that hold the customer supreme in their business strategy have discovered that it really is all about the customer. Product and technology are often short-lived. Competitors can quickly outstrip a technical advantage in a matter of months or even weeks. How are B2B high-tech organizations able to keep pace with their high-tech competitors? Investment in Customer Experience is what some organizations have recently discovered and here are some key points just published by UK-based Syngro that make the case FOR Customer Experience as a strategy.
Gartner’s latest research has highlighted that more than 50% of CEOs now rate Customer Experience Management as their number one strategic investment. Like any high growth market there is a lot of hype over what it can achieve but the key benefits of differentiating on customer experience are now unequivocal:
Profitability: 76% of consumers would pay 5% more for a better experience – 53% would pay 10% more and 10% would pay 25% more – Accenture
Loyalty: Experience is a more powerful driver of loyalty than price – 55% cite CX as the main reason for loyalty in banking, 47% in retail – Forrester Banking & Retail Report
Equity: Over a 6 year period, CX leaders outperformed the S&P 500 index by 28%. Those who had poor CX performance lagged behind the index by almost 20% – Watermark Investment Consulting
Consistency: In the UK, a £100 investment in the National Consumer Satisfaction Index fund in 2007 would have by June 2011 returned £159 whilst the same investment in the FTSE 100 would have returned just £94.
Efficiency: A one point increase in customer satisfaction (CSAT) has been proven to improve cash flow by 4% in major organizations – Journal of Marketing
Whether you are investing in CEM for the first time, or seeking to maximize the efficiency of your current program, there are some questions you simply must ask within your business, and be confident in the answers.
Key questions business leaders must ask to strengthen the CEM program:
- How can we develop measures that improve both CX and profitability?
- What must we do to ensure every employee knows their role in the Customer Experience program?
- How is the aim of delighting our customers reflected in our commercial strategy? Is this reflected by senior management?
- In our reports to the City and investors, how confident are we that we can report customer experience with the same level of granularity and rigor as other topics?
- Can we honestly say that our CX program is more than a defect-reporting mechanism? Does it create learning in the business?
- Are we using customer insight to become proactive in becoming a better, more profitable company or are we stuck in a reactive loop?
- How big is the risk represented by the way we currently engage with customers? Why are some customers loyal while others leave in a blaze of apathy?