The Importance of Data for Superior Customer Experience and Business Success
- 86% of customers will pay a higher price (up to 18% more in some cases) for a better experience.
- 73% cite CX as a key factor in buying decisions.
- 65% report being influenced more by a positive experience with a brand than by advertising.
- 89% of companies will compete primarily on the basis of CX in the near future.
Why Is CX Critical to Business Success?
Those statistics demonstrate the importance of CX but don’t explain why. For that, we need to take a step back and look at the impact of the digital revolution. As the Marketing Insider Group explains, “The digital revolution is empowering consumers like never before. They can now access a wealth of information from all over the world, anytime or anywhere they want. The result is that consumers are now more informed about their purchase decisions than ever.”
With so much data available at their fingertips, potential customers can not only thoroughly research your company — and potentially even try out your product — without ever talking to a sales rep, but they can also do the same for all of your competitors. This leads to increased expectations of not only your product but also your CX, a phenomenon that is further heightened by consumers expecting every company to deliver the same magical experience as Disney or Amazon.
Data to the Rescue
I have good news, however: to the extent that the proliferation of information is the problem, it can also be the solution. What I mean is that, just as access to information by consumers led to CX becoming critical to a business’s bottom line, companies can harness the incredible data available at their own “fingertips” to deliver a superior CX. Just consider these studies:
- A 2018 global survey by Econsultancy and Adobe found that 65 percent of respondents reported that “improving their data analysis is a very important factor in delivering a better customer experience.”
- Even more notably, in 2016, Forbes Insights and SAS concluded that 90 percent of global executives who used data analytics reported that they “improved their ability to deliver a superior customer experience.”
How Can Data Improve CX?
Those figures are impressive, but once again, it’s important to examine the reasons behind the numbers. And this time, I’m turning to Daniel Newman, principal analyst of Futurum Research and CEO of Broadsuite Media Group to help explain how data can improve your CX.
Shows You What’s Working And What’s Not
As much as we’d all like to be mind readers, the truth is that we don’t know what our significant others are thinking most of the time, much less our customers. But thankfully, companies don’t need ESP to know what’s on consumers’ minds — they just have to examine the data.
From classic CX measurements like NPS, CES, and CSAT to support metrics (e.g. average handle time, first call resolution, and self-service deflection) to success KPIs (e.g. referrals from existing customers, expansion growth rate, and customer/revenue retention rate), companies have a wealth of data available that can reveal how customers feel about your company and products.
And according to Newman, it’s just as important to study what customers don’t like as what they do. “If you don’t look at the data showing what you’re doing wrong in CX and UX, customers will leave your site, store, or app. There are simply too many other options available to accept a less-than-stellar experience.”
Enables You to Respond Faster
It’s not only the various types of quantitative data mentioned above that can aid companies in improving CX, but also qualitative data — such as unstructured customer feedback, reviews, and recommendations.
As many companies have learned the hard way, as a result of online forums, review sites, and social media, a customer’s negative experience can spread like wildfire. But, by implementing software to efficiently monitor mentions and sentiment on these platforms, companies can harness the power of data to diffuse the situation before the company becomes engulfed in flames.
Allows You To Get Personal
With the popularization of services like Amazon, Netflix, and Spotify, customers have come to expect an offering that is “personalized to save them time, recognizes their interests or preferences, and one that does those things seamlessly, without them even realizing it.” According to Newman, over 85 percent of mobile markets have achieved success with such personalization efforts in the form of higher engagement, revenue, and conversions. In other words, data leads to increased personalization, which in turn leads to a better overall CX.
Helps You Succeed (But Only If You Use It)
Despite the many ways that data can benefit CX, Newman reports that “80 percent of data is ‘dark and untouched,’ meaning it’s never actually used to make improvements or changes deemed necessary by the customer.” That’s a truly shocking statistic, but when you consider the vast array of systems in which companies collect data today, it starts to become less surprising. Looking specifically at customer-facing teams, Dimensional Research found that 93 percent of support agents said solving a customer’s problem requires multiple systems or databases. More than half (58 percent) of the time, agents must access two or three systems, and in 35 percent of cases, it’s four or more. That’s why I’m so excited to be working on a CX optimization solution that connects and indexes all of a company’s disjointed customer data to help agents surface the insights they need while filtering out the extraneous data they don’t.
Fortune Favors the Bold
As Newman sums it up, “Clearly, data can help dramatically improve the customer journey, but only for companies who are willing to be led where the data tells them to go.” And if recent studies conducted by Aberdeen Group and Forbes Insights are any indication, such brave companies will find themselves richly rewarded with stronger alignment between departments, more confident decision-making by management, more highly-engaged customers, higher cross-sell and upsell revenues, and higher annual profits. In fact, the Temkin Group asserts that even a moderate investment in improving CX can show spectacular results, to the point that a large SaaS company may even double revenue within three years.