What benefits can my company expect to derive from
providing a superior customer experience?
Customer experience is paramount to achieving high
levels of customer loyalty and advocacy.
As loyalty and advocacy has a very
lucrative effect on bottom line performance; companies with loyal customers and
advocates enjoy higher margins, greater profits – and consequently increased
share holder value.
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"There
is no neutral mode in business. Organisations need to demonstrate growth or they
risk being perceived as being in decline. In this environment, strategies for
customer retention, loyalty, and maximising customer lifetime value gain
priority, and when these goals are combined with the recognition that every
interaction with a customer impacts their effectiveness, the result is a focus
on managing the type and totality of the experience the customers have with the
company." |
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Butler Group, 2008 |
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In a difficult economic climate such as the
one we are presently experiencing, why should we prioritise this activity?
There has never been a more important time to invest
in your customers and their perceptions of value.
A study by PIMS looked at the
experience of 1,000 companies in whose sectors there had been a downturn. The
aim of this research was to investigate where investment during a recession pays
off and where it does not. Those companies were divided into those where
marketing spend had been cut, maintained or increased, and evaluated based on
return on capital employed (ROCE) and market share during the downturn and in
the two years which followed.
The data showed that those firms that increased
marketing spend on activities that affected customer perceptions of value,
typically saw the largest increments to profitability and market share during
the upturn. What is more, they saw it without any great damage to their
profitability during the downturn (see charts below - Source: Roberts, K. What
investment to make during a recession).
The research concludes by recommending that
companies invest aggressively in marketing, innovation and customer quality to
aid success during and after a market downturn lasting several years.
Ultimately
companies that emerge strong from this challenging economic climate will be
those who have demonstrated a real commitment to their customers and their
requirements despite experiencing a difficult period. They will be companies who
have
taken a walk in their customers’ shoes in order to discover what they think
and how they feel, before assessing the full spectrum of their service provision
in order to highlight areas for improvement in line with their customers’
perception of superior and valuable service.
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What kind of company should be using customer
experience as a performance metric?
Whatever the nature of your business, it is likely
that you already perform some degree of performance benchmarking, be that via
revenue, profit, share price, customer base etc. Measuring your company’s
competitiveness in the domain of customer service is equally important.
Whether
you are a B2C, B2B, B2B2C, public services company, or any other formation for
that fact, you have customers that desire consistent, intentional,
differentiated, and valuable experiences throughout their journey with you, so
understanding how you measure up to their expectations is imperative to
remaining competitive.
Furthermore, when you see things from your customers'
perspective, essentially
"through their eyes" your marketplace expands
overnight, with previously unrecognised opportunities flooding to the fore.
Understanding what your customers truly want will enable you to adapt your
services to properly assist them in their purpose, the reward for which is
sustainable customer loyalty.
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What do we do with the data we get from the iCustomerExperience
Indicator?
Proving to the world that your company is indeed
customer-centric and that the creation of loyal and profitable customers is high
on the strategic agenda is definitely something to be shouted about.
We cannot
be prescriptive in terms of how your company uses this data, opportunities are
endless, but in our view it should be at the very least:
- Shared with shareholders as proof of your continued commitment to delivering shareholder wealth
- Included in PR and marketing activity in support of increasing brand awareness and equity
- Used to justify continued investment in and anticipated ROI on customer relationship and / or experience initiatives
- Consulted as part of the design and execution of employee training programs
- Leveraged to support new product, service, market entry, to drive innovation as a whole
- Used to drive business transformation and continuous improvement in the domain of customer service
- Incorporated into sales enablement material as a way of helping your sales professionals effectively differentiate your service from that of your competitors
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Why can’t my company simply conduct its own customer
experience survey?
The answer is simple, it can. This said as in any
investigative process, the people who ask the questions can have a tendency to
subconsciously focus on data that agrees with their viewpoint or expectations.
Data collated from internal customer research can often be disappointing and
reveal little that isn’t known already. Often this is because the organisation
has unconsciously been looking only for data it knows how to deal with, even
though this does not uncover the true state of service provision.
It is easy for
companies to believe that they know their customers, and as such become confused
about what matters to them and to lose sight of real purpose. Furthermore,
research shows that customers are less forthcoming with negative information
when the survey is managed and administered by the company itself; this is a
real data accuracy and validity concern.
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It is probably more cost
effective for us to do this in-house!
This is doubtful. Companies typically have
to enlist the services of web developers, business analysts, internal marketing
personnel, content authors etc. in order to launch survey activity of this kind.
Whilst
a one-off survey is sufficient to provide an indication of
“where you are”, an
on-going study that lets you compare results over different time periods enables
you to determine “where you are going”. Both one off and longitudinal surveys
can ultimately prove to be very costly exercises, coupled with the fact that the
surveys themselves are potentially internalised, the return on the funds
invested can be questionable.
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Why should we outsource the survey
activity to
iCustomerExperience?
At the very least iCustomerExperience offers the following
benefits to companies over and above what they are able to achieve in-house:
- Benchmarking: As customer value is relative, an understanding of the wider
market’s performance in the area of customer experience is imperative. The
iCustomerExperience Index is an invaluable part of the offering, it provides a
unique and unparalleled means by which companies can benchmark their own
performance against their competitors and other companies in the market.
-
Cost
efficiency: iCustomerExperience provides the ability to execute frequent surveys
at a fraction of what it would cost a company to conduct this kind of exercise
in-house. iCustomerExperience’s client portal and supporting technology enables
companies to execute surveys quickly and with minimal fuss; whilst our expertise
and experience ensures that findings are correctly processed, analysed, and
presented back to company in which ever format they prefer.
-
Domain expertise:
With many years combined experience in assisting companies across a multitude of
vertical sectors address their customer relationship and growth strategy
challenges, iCustomerExperience’s team of professionals possess not only the
relevant statistical and analytical expertise but most importantly the skills
required to translate this analytical insight into valuable business strategies.
- Objectivity: Furthermore companies conducting their own customer surveys can be
very insular, questions and the interpretation of responses can lack
objectivity. iCustomerExperience provides a “fresh pair of eyes” (an “outside
in” as opposed to “inside-out” view of the world); a level playing field for
fair assessment; and a wealth of information regarding the make up of a truly
superior customer experience.
- Continuous improvement: Customer purpose and value
is not static but rather in a constant state of change, so companies need to be
flexible and open to change in order to keep up. The customer experience demands
of customers are constantly changing so it is imperative that companies “keep
listening”. iCustomerExperience has packages available to companies wishing to
poll customer views throughout the year, so that they can map and showcase their
improvement in this area.
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