Understandably, many businesses live and die by ROI. Too many Customer Experience transformations drop off or deteriorate every day, largely due to the fact that business leaders need to be shown the money in order to press on. But Customer Experience is a marathon, not a sprint. When it comes to transforming your Customer Experience, patience is more than a virtue; it’s a critical component of the process.
You know that putting customers at the center of your strategy results in greater customer satisfaction, more engaged employees, and a better view of your brand… But those benefits are vague at best. It’s hard to sell a goal when you can’t clearly define why it’s worth working toward. That’s where numbers come in handy.
Demystifying the value of a great Customer Experience
McKinsey’s Joel Maynes and Alex Rawson had this to say about linking the Customer Experience to value: “Building an unambiguous link between the Customer Experience and value requires patience and discipline to invest early in an analytic approach. It is easy to skip this step for the sake of speed, but that is a mistake every time.” Establishing a clear link between the 2 tells you what to focus on (i.e., the wants of your customers and prioritizing the Customer Experience strategy) and why.
But more on the why: an analytic approach brings about actionable insights, and actionable insights bring about smarter use of customer data and a more consistent, connected Customer Experience. Operational Customer Experience management system Medallia is at the forefront of Voice-of-Customer (VoC) programs. Medallia helps businesses create and send the right surveys to the right customers at the right times (see the pattern?), collect responses, and run analytics on the feedback. With Medallia, you get a full picture of your customers, their experiences, and the necessary changes to your existing Customer Experience — not a bunch of disconnected customer data without a lens with which to make sense of it.
The proof is in the (lucrative, results-driven) pudding
Cool, all-seeing Customer Experience technology aside, the question remains: How do Customer Experience champions prove to business leaders that VoC analysis (and thusly, an improved Customer Experience) drives business? Forrester Research business case report ells us 3 surprising things:
- Evaluating the ROI of a great Customer Experience by total stock market returns can be misleading. Over a multiyear period, the total stock returns of a portfolio of Customer Experience leaders beat out those of a portfolio of Customer Experience, well, sloths. No real surprise there. But Forrester tells us that factors ranging from market bubbles to large corporations rolling up different businesses into a single ticker symbol can obscure the real relationship between Customer Experience and business success.
- Correlating Customer Experience to revenue growth does reveal the business value of Customer Experience. Forrester breaks customer loyalty down into 3 types: retention, enrichment, and recommendation. Those 3 things in turn lead to increased revenue growth. (Engaged, empowered employees deliver better customer experiences; better customer experiences make happy customers; happy customers make businesses money.) But for this to work, Forrester tells us that customers need to be free to switch companies, and companies must offer differentiated Customer Experience.
- Customer Experience drives revenue growth to different degrees — depending on industry dynamics. Companies whose customers have many options in the market (e.g., chain movie theaters, investment firms… auto insurers?) see increased revenue as a direct result of providing a superior Customer Experience. Companies whose customers don’t have the luxury of choice (e.g., dental insurers… ouch) or don’t face differentiation among direct competitors will see less impact on their revenue growth — mainly because their customers are, for better or worse, stuck with them.
A VoC program is a small price to pay for major revenue rewards. When you invest in a method of listening to your customers, compiling their feedback, and making analytic, actionable sense of that feedback, you also invest in growing your business, increasing your revenue, and expanding your network of happy customers.