95% of customer buying behavior is driven by emotion and not logic. We have seen time and again that consumers go back to companies that operate with empathy, solving their problems with utmost care and devotion, and using past interactions, pain points and preferences to personalize experiences.
Think about it, would you rather deal with a company that answers your queries or grievances immediately, is able to provide customized plans and stops making unsolicited sales calls when you request it, or a business that neglects your wishes but gives you a good price?
Research suggests that the average customer would choose the former – American Express found that 86% of customers would rather pay more for a better experience than settle for an average or poor experience at a cheaper price.
For companies, understanding what drives customer emotions and how to manage customer experience is key to maximizing profit, reducing churn, and increasing customer lifetime value and duration.
What is Customer Experience Management (CXM)?
Customer experience is defined on Wikipedia as ‘a totality of cognitive, affective, sensory, and behavioral consumer responses during all stages of the consumption process including pre-purchase, consumption, and post-purchase stages.’ This image is a consequence of every interaction a customer has had with your business, from advertisements that they have read or seen to the final customer support process.
To understand customer experience better, think of all the touchpoints a customer has with your business. These could be direct touchpoints such as an interaction with a sales executive or a website click, or indirect touchpoints such as social media engagement, etc.
Customer experience management (CXM) entails improving each of these touchpoints and delivering the highest value at every step.
The Need for the Best CXM
Today, every company operates in a buyers’ market where the customer holds all the power. The internet has also afforded customers greater autonomy and choice. If an individual is unhappy with their experience, they simply find an alternative. According to a PwC report, 32% of customers will completely stop business with a company they love after just one bad experience. Some estimates suggest that attracting a new customer could be five times more expensive than retaining an existing one. That’s why it is important to think about how your customers are perceiving and feeling about you every time.
Here are some more statistics from The XM Institute that can prove why CXM should be one of the primary goals of any business:
- 95% of customers who give a company’s CX a “very good” rating are likely to recommend the company.
- 94% of customers who give a company’s CX a “very good” rating are “very likely” to repurchase from that company.
- 90% of customers said that they would trust a company more with a “very good” CX rating.
- Only 14% of customers said they would forgive a company for a poor CX.
- 64% of customers who rated a company’s CX as “very good” CX rating said they’d be “very likely” to try a company’s new product or service immediately after launch.
The report also highlighted that making small yet perceivable changes in CX, such as altering real-time support or onboarding efforts, could improve loyalty. Ingraining the importance of CX into your company’s ethos right from day one can help you position your brand as customer-centric, thereby attracting more business and improving your bottom line.
What Happens if Your CX is Sub-Par?
The most obvious consequence of a negative customer experience for your business is that you would lose the customer. As outlined above, customers can be quite harsh when it comes to reacting to a negative customer experience.
This would have larger consequences for your business. Customer churn would increase, making it imperative for you to attract new customers. Customer churn would have an obvious impact on your bottom line.
Moreover, a poor customer experience could also lead to a bad reputation for your company. Bad reviews spread just as quickly as good reviews, and in some cases, even quicker. A single customer who has had a poor customer experience has the potential to unravel years of branding and marketing efforts.
How CX Affects Your Profitability
Poor customer experience can lead to high customer churn and impact your bottom line negatively. On the flipside, an excellent customer experience management system is likely to amplify business results. Satisfied customers who have good customer experiences become repeat customers. And a loyal customer base means more revenue, lower cost per acquisition and lower customer retention costs.
You would also see more revenue due to word-of-mouth advertising, referrals, and good reviews, which means that you can count on organic growth. You could also increasingly reduce marketing spend and rely more on customer reviews and testimonials.
Remember how we said that most purchases are emotional and logical? Customer experiences are a way to tap into these emotional responses. You can convert a first-timer into a returning customer with a great first-time experience.
Good CX ensures that you stay in the game and play well. Your brand value can transcend the product or service value that you provide. This opens up avenues for you to explore new products and launches on the back of loyal customers who would be willing to root for your products.
A carefully-curated customer experience strategy can bring you more revenue, reduce costs and thereby boost your bottom line.
How to Bolster Your CX?
1. Understand the Customer Journey
Without understanding the customer journey, you cannot optimize the experience. Spend time to analyze every touch point your customer has with the business. Think of why B2C companies like Apple and Netflix have a strong customer following. It’s not just the product that they offer, but how they tailor the entire experience. You can build a range of processes that include call centers, artificial intelligence, analytics, feedback mechanisms, and more to plot your customer journey and improve on it.
2. Focus on Customer Feedback
What better way to learn about customer experience than from the horse’s mouth? Collecting as much customer feedback as you can at every step of the way will only help you improve your CX strategy. Be it your outreach programs, your customer support services, social media or your after-sales services, collect customer feedback to understand what your customers like and don’t like about the experience you provide.
3. Go Omnichannel
Today, customers hop from one form of communication to another. Some traditionalists prefer phone calls while others may want to reach out through a chat box to resolve their issues. You need to cater to every customer’s needs. Having an omnichannel presence and customer service contact centers can ensure that you are servicing your customers the way they want. Going omnichannel can also help you expand your target audience.
4. Personalize the Experience
One of the best examples of personalized services is the beauty brand Sephora. They provide “in-store companions” to their customers to serve them in the most intimate way possible. A brand that is able to customize experiences for its users is more likely to find loyalists than a brand that has a generic value proposition. While the product or core service you offer could be the same, how you handle customer issues and bring them to quick resolutions should always be based on what your customer wants. Historical data can help you personalize experiences.
5. Train Your Staff to Be Empathetic
Customers want to feel valued. Investing time and effort into training your staff to be polite, empathetic, encouraging and helpful can ensure that your customers feel heard and can contribute to customer experience significantly.
6. Improve Time to Resolution
One of the biggest complaints that most customers have is long wait and response times for issue resolution. Remember, we live in a world of instant gratification. If your response times are delayed, it is going to impact how they feel about your brand. Be it delivery, customer support or after-sales support, make sure to provide the customer with a resolution in the least amount of time possible, and constantly review training and process to make it as efficient as possible.
7. Measure Your Customer Experience
Collect copious feedback directly from customers, engage call centers to track and analyze calls to understand how your measures are affecting your customers. Data will give you hard evidence on how your strategy is performing currently and how you can make it better.
8. Adapt to Change
If you find that some part of your customer’s journey is not as efficient as it could be, be open to change. Only with continuous improvements can you finally crack a customer experience journey that can be considered successful. Track various customer metrics, conduct customer interviews and change aspects of the experience that aren’t working.
What CX Metrics Can You Track?
There are a number of CX metrics you can track that will give you a clear picture of your customer experience. These KPIs can not only track your customer’s experience, they can also contribute significantly to growth and profitability.
1. Net Promoter Score (NPS)
A Net Promoter Score tracks customer loyalty and satisfaction by aggregating information on how likely a customer is to recommend your brand to someone else. Having an NPS score that is high, or higher than industry average, means that you have a healthy relationship with your customers. However, NPS alone isn’t enough. You should always dig deeper and find out why your customers would/would not recommend you, so you can do more or less of it respectively.
2. Customer Satisfaction Score (CSAT)
A Customer Satisfaction score is similar to NPS in the sense that it gets customers to rate how satisfied they were with a product, service or an interaction. To calculate CSAT, you need to collect feedback from customers, compute the positive scores, divide by the total scores and multiply by hundred. The higher your CSAT, the more satisfied and happy your customers are.
3. Customer Lifetime Value (CLV)
Customer Lifetime Value computes the total revenue you generate from a customer during the tenure of their relationship with your business. Customer interaction needs to turn into a revenue-generating activity. CLV gives you an idea of what an average customer spends on your brand. It can also give you an idea of what your business revenues would look like in future. CLV helps measure the impact of your retention efforts and how loyal your customers are.
4. Customer Effort Score (CES)
Customer Effort Score is a fairly new metric that measures how easy it is for a customer to interact with your business and have their goals accomplished. Customers want to do as little as possible to have their issues addressed. Low customer effort can improve customer experience and increase loyalty. CES can help you smoothen the customer journey.
How Can Call Centers Impact CXM?
Call centers are essential cogs in the wheel to understanding how a customer is feeling about a brand. Call center agents can collect information regarding where the customer is on their buying journey, how their experience is, and what their buying behaviors are.
Call centers may be only one part of the customer experience journey, but they can provide in-depth business analytics and customer reports that can help you improve your customer experience. Call center agents are also front-end representatives who can improve customer experience with empathetic and helpful conversations.
When equipped with tech tools such as artificial intelligence, call centers can minimize hold times, collect customer data and even solve issues without human intervention.
A unified communications solution can ensure consistent service across different channels. When employed efficiently, call centers can enhance customer experience. Allsec’s customer experience management tools are designed to deliver smart solutions. Backed by a suite of over 25 in-house technological tools, our call centers provide only the best services to your customers.
Customers now have more power than ever before. This means that they demand the best. To be a company that engages its customers successfully, you have to focus on the customer experience. There are also monetary benefits to improved customer experience management, including better recurring revenue and increased bottom lines.
Leverage Allsec’s advanced Customer Experience Management services that guarantee optimal results.