Customer Experience (CX) is by far one of the most powerful tools businesses can use to improve their bottom line. However, interestingly enough, there are a lot of Customer Experience Professionals that struggle to highlight connections between their CX programs and their ROI.
Alternatively, you might now be asking yourself if so many CX practitioners struggle to do it, is it even possible to trace CX program efforts to any improvements with your bottom line?
Well, from an expert perspective the line between the two is clearly defined when you build upon the “Four Pillars of CX ROI”, which we will explain shortly. By utilising these four pillars you’ll be able to attach a dollar value to your CX program in a way that is easily understood by everyone in your organisation.
Pillar One: Customer Acquisition.
Understanding the Voice of the Customer (VoC) is a pivotal process and utilising a good VoC program is an asset for organisations to stay ahead of the game because it allows you to be able to identify what “new customers” and looking for in a brand.
For Example, Organisations can capitalise on customer acquisitions by strategically creating surveys to find new types of customers. This could be as simple as setting the survey to target people between the ages of 18 – 40, of which they then ask specific questions to develop a better understanding of their demographics, which will enable them to expand into new cities and different demographics.
So what about ROI?
Research tells us that organisations who have run this particular initiative were able to prove its worth by tracking new customer acquisitions, increases in unique customers, and market share growth that is generated in newly explored demographics.
Pillar Two: Customer Retention.
The power of service recovery is something that businesses should never underestimate because a whopping 70% of customers that have a problematic situation solved in their favour will continue to return to that business.
From a financial perspective, a 10% increase in customer retention can grow a businesses value by 30%.
Operations-focused organisations are never going to achieve these numbers. It takes a truly customer-centric organisation to easily achieve and maintain these percentages.
Pillar Three: Cross-Selling & Up-Selling.
According to Invesp (USA), Conversion Rate Optimisation Experts, investing in new customers is between 5 and 25 times more expensive than retaining existing ones.
Therefore, organisations all over the world stand to gain more from finding new cross-selling and upselling opportunities with their existing customers.
Organisations now have the opportunity to leverage CX listening tools to identify the particular aspects of a brand that spurs trust and loyalty from its customers. With this information, organisations can take action to tailor their offerings and make them even stronger.
It’s said that almost 50% of customers are willing to spend from 11% – 50% more with a brand that they feel they can trust.
For Example, we have been watching a lot of businesses like cafes and small food delivery companies that interact with their customers on social media and conduct informal customer questionnaires to identify their likes, dislikes, things they would like to see and things that want more of.
These businesses can capture feedback from their existing customer base from which they can make fundamental changes to their offerings and essentially give the people what they want. We can confidently assume that this, in most cases, would transfer into a nice increase in revenue for these small businesses.
Pillar Four: Cost Reduction & Elimination
Organisations can utilise both CX Feedback and Voice of Employee Feedback as a strategy to 1. Operationally save money, and 2. Simplify services and customer experience provided.
Additionally, organisations need to be asking themselves or identifying if any ineffective processes are costing them more than what it’s worth. In the long run, eliminating said costs will save the organisation’s resources, time and money.
Additionally, implementing a process for conducting exit interviews with departing employees offers another great opportunity for organisations to develop a greater understanding of employee sentiment. Ultimately, revealing actionable insights necessary to reduce staff turnover, improve the hiring process and all related costs.
Our Team here at HOED Research have the expertise to help you bridge the gap between your CX programs and ROI. We strive to partner with you in a way that builds trust and confidence, so feel free to reach out and ask us any burning questions, our team are happy to help!